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2/21/2013

20 Dividend Contenders With High Growth And Cheap Price Ratios


Dividend growth stocks with strongest earnings growth at low market price ratios originally published at "long-term-investments.blogspot.com". 

Dividend Contenders are the following class of the  Dividend Champions league. Contenders raised dividend payments over a period of 10-25 years without a break. Most of them have a huge potential to become a solid Dividend Champion.

The advantage of Contenders is that they are not in a main focus of many investors because of their smaller capitalization or lower media presence. As a result, we can often discover some high quality dividend growth stocks at a lower price.

I screened all 189 Contenders and selected those with an expected earnings growth of more than 10 percent as well as a low forward P/E ratio of less than 15. Exactly 20 companies fulfilled my criteria of which seventeen are currently recommended to buy.

Here are my favorite stocks:
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Norfolk Southern (NYSE:NSC) has a market capitalization of $22.69 billion. The company employs 30,329 people, generates revenue of $11.040 billion and has a net income of $1.749 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $4.040 billion. The EBITDA margin is 36.59 percent (the operating margin is 28.30 percent and the net profit margin 15.84 percent).

Financial Analysis: The total debt represents 28.61 percent of the company’s assets and the total debt in relation to the equity amounts to 88.95 percent. Due to the financial situation, a return on equity of 17.69 percent was realized. Twelve trailing months earnings per share reached a value of $5.36. Last fiscal year, the company paid $1.94 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 13.49, the P/S ratio is 2.09 and the P/B ratio is finally 2.36. The dividend yield amounts to 2.73 percent and the beta ratio has a value of 1.13.


”Long-Term
Long-Term Stock History Chart Of Norfolk Southern (NSC)
”Long-Term
Long-Term Dividends History of Norfolk Southern (NSC)
”Long-Term
Long-Term Dividend Yield History of Norfolk Southern (NSC)

Caterpillar (NYSE:CAT) has a market capitalization of $60.96 billion. The company employs 129,113 people, generates revenue of $65.875 billion and has a net income of $5.708 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $11.386 billion. The EBITDA margin is 17.28 percent (the operating margin is 13.01 percent and the net profit margin 8.66 percent).

Financial Analysis: The total debt represents 44.92 percent of the company’s assets and the total debt in relation to the equity amounts to 228.97 percent. Due to the financial situation, a return on equity of 37.36 percent was realized. Twelve trailing months earnings per share reached a value of $8.49. Last fiscal year, the company paid $2.02 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 10.99, the P/S ratio is 0.93 and the P/B ratio is finally 3.48. The dividend yield amounts to 2.23 percent and the beta ratio has a value of 1.91.


”Long-Term
Long-Term Stock History Chart Of Caterpillar (CAT)
”Long-Term
Long-Term Dividends History of Caterpillar (CAT)
”Long-Term
Long-Term Dividend Yield History of Caterpillar (CAT)

CVS Caremark (NYSE:CVS) has a market capitalization of $63.83 billion. The company employs 202,000 people, generates revenue of $123.133 billion and has a net income of $3.882 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $10.386 billion. The EBITDA margin is 8.43 percent (the operating margin is 5.59 percent and the net profit margin 3.15 percent).

Financial Analysis: The total debt represents 14.91 percent of the company’s assets and the total debt in relation to the equity amounts to 26.07 percent. Due to the financial situation, a return on equity of 10.25 percent was realized. Twelve trailing months earnings per share reached a value of $3.04. Last fiscal year, the company paid $0.65 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 17.04, the P/S ratio is 0.52 and the P/B ratio is finally 1.69. The dividend yield amounts to 1.74 percent and the beta ratio has a value of 0.77.


”Long-Term
Long-Term Stock History Chart Of CVS Caremark (CVS)
”Long-Term
Long-Term Dividends History of CVS Caremark (CVS)
”Long-Term
Long-Term Dividend Yield History of CVS Caremark (CVS)


Take a closer look at the full list of cheap Dividend Contenders with high growth. The average P/E ratio amounts to 14.81 and forward P/E ratio is 11.97. The dividend yield has a value of 1.85 percent. Price to book ratio is 2.62 and price to sales ratio 1.58. The operating margin amounts to 15.24 percent and the beta ratio is 1.15. Stocks from the list have an average debt to equity ratio of 0.53.

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

20 Dividend Contenders With Strong Growth (Click to enlarge)

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Related stock ticker symbols:
NTT, BANF, NSC, CAH, UTX, DGICB, CAT, MUR, NUS, PII, CNI, CVS, QCOM, LECO, CNQ, ANDE, MATW, VMI, FDX, AAN

Selected Articles:


*I am long UTX, QCOM. 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.

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