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11/14/2012

23 Dividend Growth Stocks With Highest Growth And Strongest Buy Recommendation

Dividend Challengers With High Growth And Buy Rating. Originally Published At “long-term-investments.blogspot.com”. I like dividend growth stocks in the second and third range because they are often not in focus of many mainstream investors and they are often much cheaper than dividend growth stocks from the Dow Jones (e.g. Johnson and Johnson).  The third class of dividend growth stocks is the Dividend Challengers class. Those stocks raised dividends over a period of more than five consecutive years but less than 10 years. One day they could become a big dividend hero like Coca Cola or Procter and Gamble. But which stocks should we buy now?

I made a screen of the 105 Dividend Challengers and implemented two restrictions: The Company should have a current buy or better recommendation and the stock should have positive earnings per share growth for the next five years of more than ten percent yearly. Twenty-three stocks fulfilled these criteria. As you can see, the investment category is full of investment opportunities.

Here are my favorite stocks:
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Walgreen Company (NYSE:WAG) has a market capitalization of $30.46 billion. The company employs 171,000 people, generates revenue of $71.633 billion and has a net income of $2.127 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $4.630 billion. The EBITDA margin is 6.46 percent (the operating margin is 4.84 percent and the net profit margin 2.97 percent).

Financial Analysis: The total debt represents 16.11 percent of the company’s assets and the total debt in relation to the equity amounts to 29.57 percent. Due to the financial situation, a return on equity of 12.86 percent was realized. Twelve trailing months earnings per share reached a value of $2.42. Last fiscal year, the company paid $0.95 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 13.32, the P/S ratio is 0.43 and the P/B ratio is finally 1.68. The dividend yield amounts to 3.38 percent and the beta ratio has a value of 1.01.


”Long-Term
Long-Term Stock History Chart Of Walgreen Company (Click to enlarge)
”Long-Term
Long-Term Dividends History of Walgreen Company (WAG) (Click to enlarge)
”Long-Term
Long-Term Dividend Yield History of Walgreen Company (NYSE: WAG) (Click to enlarge)

3M (NYSE:MMM) has a market capitalization of $60.41 billion. The company employs 84,000 people, generates revenue of $29.611 billion and has a net income of $4.357 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $7.414 billion. The EBITDA margin is 25.04 percent (the operating margin is 20.86 percent and the net profit margin 14.71 percent).

Financial Analysis: The total debt represents 16.34 percent of the company’s assets and the total debt in relation to the equity amounts to 33.50 percent. Due to the financial situation, a return on equity of 27.56 percent was realized. Twelve trailing months earnings per share reached a value of $6.25. Last fiscal year, the company paid $2.20 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 13.96, the P/S ratio is 2.11 and the P/B ratio is finally 4.01. The dividend yield amounts to 2.65 percent and the beta ratio has a value of 0.87.


”Long-Term
Long-Term Stock History Chart Of 3M (Click to enlarge)
”Long-Term
Long-Term Dividends History of 3M (MMM) (Click to enlarge)
”Long-Term
Long-Term Dividend Yield History of 3M (NYSE: MMM) (Click to enlarge)

Illinois Tool Works (NYSE:ITW) has a market capitalization of $27.60 billion. The company employs 65,000 people, generates revenue of $17.786 billion and has a net income of $2.017 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $3.320 billion. The EBITDA margin is 18.67 percent (the operating margin is 15.35 percent and the net profit margin 11.34 percent).

Financial Analysis: The total debt represents 22.19 percent of the company’s assets and the total debt in relation to the equity amounts to 39.83 percent. Due to the financial situation, a return on equity of 20.60 percent was realized. Twelve trailing months earnings per share reached a value of $4.10. Last fiscal year, the company paid $1.40 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 14.53, the P/S ratio is 1.58 and the P/B ratio is finally 2.94. The dividend yield amounts to 2.50 percent and the beta ratio has a value of 1.17.


”Long-Term
Long-Term Stock History Chart Of Illinois Tool Works (Click to enlarge)
”Long-Term
Long-Term Dividends History of Illinois Tool Works (ITW) (Click to enlarge)
”Long-Term
Long-Term Dividend Yield History of Illinois Tool Works (NYSE: ITW) (Click to enlarge)


Take a closer look at the full table of high growth Dividend Challenger stocks with buy or better rating. The average P/E ratio amounts to 23.71 and forward P/E ratio is 14.41. The dividend yield has a value of 2.19 percent. Price to book ratio is 3.04 and price to sales ratio 1.60. The operating margin amounts to 13.89 percent. The average stock has a debt to equity ratio of 0.55. I like the low debt figures and the high growth of the results. You can’t find so many stocks cumulated with those attractive figures. But the stocks are expensive. That’s the price you need to pay.

Here is the full table with some fundamentals (TTM):


23 Dividend Growth Stocks With High Growth And Buy+ Recommendaton (Click to enlarge)
  
Related stock ticker symbols:
LEG, WAG, MSA, SJW, SWK, AFL, MMM, ITW, TGT, VFC, TROW, MHP, PNR, TNC, LOW, CTAS, GRC, CSL, VAL, SCL, FDO, NDSN, BEN

Selected Articles:


I am long WAG. I receive no compensation to write about these specific stocks, sector or theme. I don't plan to increase or decrease positions or obligations within the next 72 hours.

For the other stocks: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I receive no compensation to write about any specific stock, sector or theme.

1 comment:

  1. Anonymous11/15/2012

    Investors can buy into undervalued dividend-growth stocks now to benefit from long-term growth, as well as a short-term boost from the increased holiday spending. Long WAG

    ReplyDelete

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