1/07/2013

Cheap Dividend Champions | 20 Stocks With Highest Growth At Low Valuation

Dividend Champions with highest growth at low pricing figures originally published at "long-term-investments.blogspot.com". Many people want to make money by stock trading but most of them fail. I often tell you that you can only make money if you buy stocks at fair prices with attractive financial ratios. To buy stocks at normal prices gives you the possibility to find more investment opportunities at lower risk.

I don’t want the cheapest stocks with the highest yields because there is something wrong with the business model and the market knows it. I prefer stocks with a P/E ratio in the range of 10 to 20 with positive or even high growth rates for the mid-term. Not enough, the business environment should be low volatile and slow changing.

Today I like to focus on the best class of dividend growth stocks, the Dividend Champions league. Those stocks have raised dividends over a period of more than 25 consecutive years. Exactly 105 companies fulfilled these criteria. Below is a nice list of 20 Dividend Champs at low P/E levels (under 15) with the highest earnings per share growth for the next five years.

Cheap or not is often a question of growth. Only two companies have a yield over 3 percent and thirteen are currently recommended to buy now.

Here are my favorite stocks:
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3M (NYSE:MMM) has a market capitalization of $65.99 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 15.25, the P/S ratio is 2.26 and the P/B ratio is finally 4.30. The dividend yield amounts to 2.47 percent and the beta ratio has a value of 0.88.


”Long-Term
Long-Term Stock History Chart Of 3M (MMM)
”Long-Term
Long-Term Dividends History of 3M (MMM)
”Long-Term
Long-Term Dividend Yield History of 3M (MMM)

Walgreen Company (NYSE:WAG) has a market capitalization of $35.14 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 $2.23. 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 16.67, the P/S ratio is 0.49 and the P/B ratio is finally 1.92. The dividend yield amounts to 2.96 percent and the beta ratio has a value of 0.99.


”Long-Term
Long-Term Stock History Chart Of Walgreen Company (WAG)
”Long-Term
Long-Term Dividends History of Walgreen Company (WAG)
”Long-Term
Long-Term Dividend Yield History of Walgreen Company (WAG)

Illinois Tool Works (NYSE:ITW) has a market capitalization of $28.92 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 15.23, the P/S ratio is 1.63 and the P/B ratio is finally 3.01. The dividend yield amounts to 2.44 percent and the beta ratio has a value of 1.17.


”Long-Term
Long-Term Stock History Chart Of Illinois Tool Works (ITW)
”Long-Term
Long-Term Dividends History of Illinois Tool Works (ITW)
”Long-Term
Long-Term Dividend Yield History of Illinois Tool Works (ITW)


Take a closer look at the full list of 20 cheap dividend growth stocks. The average P/E ratio amounts to 16.33 and forward P/E ratio is 12.89. The dividend yield has a value of 2.24 percent. Price to book ratio is 3.18 and price to sales ratio 1.58. The operating margin amounts to 14.62 percent and the beta ratio is 1.14. Stocks from the list have an average debt to equity ratio of 0.62.

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

20 Cheap Dividend Champions (Click to enlarge)

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Related stock ticker symbols:
CTBI, DBD, WAG, RPM, AFL, SWK, MMM, ITW, EV, ADM, TGT, VFC, BRC, DOV, MHP, FDO, CSL, SCL, 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.





2 comments:

  1. Anonymous1/07/2013

    individual stocks will carry higher risk due to the lack of diversification when evaluated on a stand-alone basis. You can mitigate this risk to a degree by selecting solid dividend paying companies with a track record of increasing their dividends each year. I love Walgreen.

    ReplyDelete

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