7/22/2013

10 Cheap Income Growth Stocks From The S&P High-Yield Dividend Aristocrats Index

Stocks from the S&P High Yield Dividend Aristocrats with strong growth at low valuation originally published at long-term-investments.blogspot.com. Is there anybody who don’t loves high dividend paying stocks with a long history of dividend hikes? I don’t think so.

Standard & Poor’s has created an index family with focus on dividend growth stocks. One member of the index family is the popular S&P High Yield Dividend Aristocrats Index. Around 84 companies are part of the income product. The index is designed to measure the performance of companies within the S&P Composite 1500® that have followed a managed-dividends policy of consistently increasing dividends every year for at least 20 years.


Below is a small list of the cheapest stocks from the index with expected double-digit earnings per share growth for the next five years. In addition to the growth figures, they have a low forward P/E, fewer than 15. Only ten stocks fulfilled these criteria of which nine have a buy or better rating.


These are the best yielding results:
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AbbVie (NYSE:ABBV) has a market capitalization of $70.51 billion. The company employs 21,500 people, generates revenue of $18.380 billion and has a net income of $5.275 billion. AbbVie’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $7.614 billion. The EBITDA margin is 41.43 percent (the operating margin is 31.65 percent and the net profit margin 28.70 percent).

Financial Analysis: The total debt represents 58.03 percent of AbbVie’s assets and the total debt in relation to the equity amounts to 466.01 percent. Due to the financial situation, a return on equity of 68.98 percent was realized by AbbVie. Twelve trailing months earnings per share reached a value of $3.39. Last fiscal year, AbbVie paid $1.60 in the form of dividends to shareholders. Forward P/E: 13.79. The earnings for the next five years are expected to grow by 10.05 percent.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 13.13, the P/S ratio is 3.84 and the P/B ratio is finally 20.88. The dividend yield amounts to 3.59 percent and the beta ratio is not calculable.


Long-Term Stock Price Chart Of AbbVie (ABBV)
Long-Term Dividend Payment History of AbbVie (ABBV)
Long-Term Dividend Yield History of AbbVie (ABBV)

Walgreen (NYSE:WAG) has a market capitalization of $47.83 billion. The company employs 171,000 people, generates revenue of $71.633 billion and has a net income of $2.127 billion. Walgreen’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $4.672 billion. The EBITDA margin is 6.52 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 Walgreen’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 by Walgreen. Twelve trailing months earnings per share reached a value of $2.27. Last fiscal year, Walgreen paid $0.95 in the form of dividends to shareholders. Forward P/E: 14.28. The earnings for the next five years are expected to grow by 12.98 percent.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 22.27, the P/S ratio is 0.67 and the P/B ratio is finally 2.62. The dividend yield amounts to 2.49 percent and the beta ratio has a value of 1.11.


Long-Term Stock Price Chart Of Walgreen (WAG)
Long-Term Dividend Payment History of Walgreen (WAG)
Long-Term Dividend Yield History of Walgreen (WAG)

Cardinal Health (NYSE:CAH) has a market capitalization of $17.27 billion. The company employs 32,500 people, generates revenue of $107.552 billion and has a net income of $1.070 billion. Cardinal Health’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $2.186 billion. The EBITDA margin is 2.03 percent (the operating margin is 1.67 percent and the net profit margin 0.99 percent).

Financial Analysis: The total debt represents 11.93 percent of Cardinal Health’s assets and the total debt in relation to the equity amounts to 46.35 percent. Due to the financial situation, a return on equity of 17.70 percent was realized by Cardinal Health. Twelve trailing months earnings per share reached a value of $3.35. Last fiscal year, Cardinal Health paid $0.86 in the form of dividends to shareholders. Forward P/E: 14.24. The earnings for the next five years are expected to grow by 10.50 percent.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 15.07, the P/S ratio is 0.16 and the P/B ratio is finally 2.78. The dividend yield amounts to 2.40 percent and the beta ratio has a value of 0.77.


Long-Term Stock Price Chart Of Cardinal Health (CAH)
Long-Term Dividend Payment History of Cardinal Health (CAH)
Long-Term Dividend Yield History of Cardinal Health (CAH)

Target Corporation (NYSE:TGT) has a market capitalization of $46.52 billion. The company employs 361,000 people, generates revenue of $73.301 billion and has a net income of $2.99 billion. Target Corporation’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $7.513 billion. The EBITDA margin is 10.25 percent (the operating margin is 7.33 percent and the net profit margin 4.09 percent).

Financial Analysis: The total debt represents 37.86 percent of Target Corporation’s assets and the total debt in relation to the equity amounts to 110.13 percent. Due to the financial situation, a return on equity of 18.52 percent was realized by Target Corporation. Twelve trailing months earnings per share reached a value of $4.26. Last fiscal year, Target Corporation paid $1.38 in the form of dividends to shareholders. Forward P/E: 13.30. The earnings for the next five years are expected to grow by 11.06 percent.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 17.05, the P/S ratio is 0.64 and the P/B ratio is finally 2.83. The dividend yield amounts to 2.37 percent and the beta ratio has a value of 0.90.


Long-Term Stock Price Chart Of Target Corporation (TGT)
Long-Term Dividend Payment History of Target Corporation (TGT)
Long-Term Dividend Yield History of Target Corporation (TGT)

Take a closer look at the full list of the cheapest income growth stocks. The average P/E ratio amounts to 18.40 and forward P/E ratio is 13.91. The dividend yield has a value of 1.86 percent. Price to book ratio is 4.87 and price to sales ratio 1.91. The operating margin amounts to 17.47 percent and the beta ratio is 1.12. Stocks from the list have an average debt to equity ratio of 1.03.

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

Cheap Income Growth Stocks From The
S&P High Yield Dividend Aristocrats Index (Click to enlarge)

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Related Stock Ticker Symbols:
ABBV, WAG, CAH, TGT, SWK, DOV, CSL, EGN, BEN, BCR

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.


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