1/21/2013

13 Dividend Growth Potentials With Really Cheap Price Ratios

Stocks with dividend growth potential and cheap price ratios originally published at "long-term-investments.blogspot.com". I often publish sheets and lists of dividend growth stocks. Mostly I use Dividend Champions, Achievers or Contender lists. All stocks from the lists have a consecutive dividend growth of more than 10 years.

I ever try to discover the best stocks with the most attractive fundamentals in order to get the best results. But these lists have one big failure: They include also stocks with high debt and low growth. Not enough some of them pay a dividend which is bigger than the earnings per share of the recent quarters.


Those companies are on the edge to cut the dividend payments. If they do so, they would be kicked off the lists and you sit on a low yielding stock and wait for a recovery which could costs you 5 or 10 years to realize a positive return.

I am a dividend growth investor and made most of my money with dividend growth stocks. But if I am honest, the biggest returns I made were with stocks at a lower yield and higher growth. That’s the reason why I always look for stocks with not a perfect dividend growth history but a more attractive debt and growth situation.


Today I like to highlight some dividend potentials, stocks with potential to boost dividends over the next five years or so. My list includes 110 companies and I show you the cheapest stocks measured by a forward P/E ratio of less than 10.

Thirteen companies have such a low P/E ratio of which twelve are currently recommended to buy. This alone shows the quality of my screen compared to the Dividend Champions lists.


Here are my favorite stocks:
(Subscribe my Blog via RSS Feed or E-Mail. Alternative, you can follow me on Facebook or Twitter)

AFLAC (NYSE:AFL) has a market capitalization of $24.13 billion. The company employs 8,562 people, generates revenue of $22.171 billion and has a net income of $1.964 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $6.761 billion. The EBITDA margin is 30.49 percent (the operating margin is 13.50 percent and the net profit margin 8.86 percent).

Financial Analysis: The total debt represents 2.81 percent of the company’s assets and the total debt in relation to the equity amounts to 24.32 percent. Due to the financial situation, a return on equity of 15.99 percent was realized. Twelve trailing months earnings per share reached a value of $6.04. Last fiscal year, the company paid $1.23 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 8.52, the P/S ratio is 1.09 and the P/B ratio is finally 1.78. The dividend yield amounts to 2.72 percent and the beta ratio has a value of 1.85.


”Long-Term
Long-Term Stock History Chart Of AFLAC (AFL)
”Long-Term
Long-Term Dividends History of AFLAC (AFL)
”Long-Term
Long-Term Dividend Yield History of AFLAC (AFL)

General Dynamics (NYSE:GD) has a market capitalization of $24.95 billion. The company employs 93,700 people, generates revenue of $32.677 billion and has a net income of $2.552 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $4. 418 billion. The EBITDA margin is 13.52 percent (the operating margin is 11.71 percent and the net profit margin 7.81 percent).

Financial Analysis: The total debt represents 11.27 percent of the company’s assets and the total debt in relation to the equity amounts to 29.70 percent. Due to the financial situation, a return on equity of 19.23 percent was realized. Twelve trailing months earnings per share reached a value of $6.72. Last fiscal year, the company paid $1.88 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 10.51, the P/S ratio is 0.76 and the P/B ratio is finally 1.90. The dividend yield amounts to 2.89 percent and the beta ratio has a value of 1.24.


”Long-Term
Long-Term Stock History Chart Of General Dynamics (GD)
”Long-Term
Long-Term Dividends History of General Dynamics (GD)
”Long-Term
Long-Term Dividend Yield History of General Dynamics (GD)

Corning (NYSE:GLW) has a market capitalization of $17.88 billion. The company employs 28,800 people, generates revenue of $7.890 billion and has a net income of $2.805 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $2.651 billion. The EBITDA margin is 33.60 percent (the operating margin is 21.47 percent and the net profit margin 35.55 percent).

Financial Analysis: The total debt represents 8.59 percent of the company’s assets and the total debt in relation to the equity amounts to 11.34 percent. Due to the financial situation, a return on equity of 13.87 percent was realized. Twelve trailing months earnings per share reached a value of $1.27. Last fiscal year, the company paid $0.23 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 9.54, the P/S ratio is 2.27 and the P/B ratio is finally 0.87. The dividend yield amounts to 2.98 percent and the beta ratio has a value of 1.45.


”Long-Term
Long-Term Stock History Chart Of Corning (GLW)
”Long-Term
Long-Term Dividends History of Corning (GLW)
”Long-Term
Long-Term Dividend Yield History of Corning (GLW)

Take a closer look at the full list of the cheapest dividend growth potentials. The average P/E ratio amounts to 10.33 and forward P/E ratio is 8.69. The dividend yield has a value of 2.13 percent. Price to book ratio is 1.25 and price to sales ratio 1.38. The operating margin amounts to 15.95 percent and the beta ratio is 1.20. Stocks from the list have an average debt to equity ratio of 0.29. What do you think about my dividend growth potential list? Would you buy some of them? Please share your thoughts by leaving a comment below.

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

13 Cheapest Dividend Growth Potentials (Click to enlarge)


If you like this list, please give us a Facebook Like, make a tweet or post a comment below!

Related stock ticker symbols:
STO, TX, GLW, GD, AFL, NDAQ, RGA, AET, BVN, HMY, HUM, TSN, APA

Selected Articles:

* 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.




3 comments:

  1. Anonymous1/21/2013

    As a dividend growth investor, one of the primary stats I look at when evaluating a stock is the number of annual dividend increases. The longer a stock has been increasing its dividend payment, the more that becomes part of the corporate identity. Typically, it takes a major event within the company (or industry) to prevent the board of directors from continuing to raise its dividend after a long history has been established. This adds a layer of safety that helps me sleep better at night. I am quite certain that Kimberly-Clark (KMB) - 38 years of increases, Wal-Mart (WMT) - 37 years of increases, and AFLAC (AFL) - 30 years of increases, will provide me with a raise once again this year. Companies like these should be at the core of any dividend growth portfolio.

    ReplyDelete
  2. Wow! I'll definitely discuss this matter with my wife, I will make sure that e would invest in one of the companies in the list. Great post!

    ReplyDelete
  3. It is truly a great and helpful piece of nice information.
    I am satisfied that you simply shared this useful information with us.
    Please stay us informed like this. Thanks for sharing.
    international financial investment

    ReplyDelete

Do you have any questions or notes to this article?
Please let me know your thoughts and we will discuss it.

If you like to receive the Dividend Weekly for free (weekly published E-Book with around 1,000 best dividend paying stocks), please enter your email and verify your adress. Easily unsubscribe at any time.