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3 Stocks Warren Buffett Would Pick In His Earlier Years

I've released earlier this week an article about Warren Buffett's latest portfolio moves. Warren acts very cautious. 

He hold much cash and makes only a few big moves per year. People can say that he is a really lazy guy but also a smart investor when you look at his long-term performance.

If you copy Warren Buffett's investment style and cover his latest trades very tight, you will definitely make no bigger return. 

How was it possible to create a $50 billion net worth over 50 years, only by trading stocks?


Warren invested in his earlier year’s money into companies with operational problems. In addition, they were very small compared to the market potential. He bought the potential leaders in a growing market.

Looking into the past doesn’t help us to find new stock ideas. I've always look at higher capitalized stocks because of the bigger degree of safety. But large capitalized stocks are also stocks with modest or slow growth. 

Today I present you 3 long-term dividend growers (stocks that have raised dividends over 25 years or more), with the following criteria:

- Market capitalization under USD 2 billion
- Dividend Payout Ratio below 50 percent
- Debt-To-Equity less than 0.5
- Forward P/E fewer than 20

You can find a company overview of the three results below. I don't own any of them but believe that they cover some values inside.

These are the results:

Community Trust Bancorp (NASDAQ:CTBI) has a market capitalization of $722.69 million. The company employs 1,045 people, generates revenue of $153.72 million and has a net income of $44.86 million. Community Trust Bancorp’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $71.80 million. The EBITDA margin is 40.32 percent (the operating margin is 36.55 percent and the net profit margin 25.19 percent).

Financial Analysis: The total debt represents 7.81 percent of Community Trust Bancorp’s assets and the total debt in relation to the equity amounts to 70.88 percent. Due to the financial situation, a return on equity of 11.69 percent was realized by Community Trust Bancorp. Twelve trailing months earnings per share reached a value of $3.01. Last fiscal year, Community Trust Bancorp paid $1.25 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 15.21, the P/S ratio is 4.06 and the P/B ratio is finally 1.78. The dividend yield amounts to 2.80 percent and the beta ratio has a value of 0.95.


Long-Term Stock Price Chart Of Community Trust Bancorp (CTBI)
Long-Term Dividend Payment History of Community Trust Bancorp (CTBI)
Long-Term Dividend Yield History of Community Trust Bancorp (CTBI)

ABM Industries (NYSE:ABM) has a market capitalization of $1.54 billion. The company employs 95,000 people, generates revenue of $4.300 billion and has a net income of $62.72 million. ABM Industries’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $159.35 million. The EBITDA margin is 3.71 percent (the operating margin is 2.24 percent and the net profit margin 1.46 percent).

Financial Analysis: The total debt represents 11.50 percent of ABM Industries’s assets and the total debt in relation to the equity amounts to 25.28 percent. Due to the financial situation, a return on equity of 7.62 percent was realized by ABM Industries. Twelve trailing months earnings per share reached a value of $1.37. Last fiscal year, ABM Industries paid $0.58 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 20.34, the P/S ratio is 0.36 and the P/B ratio is finally 1.79. The dividend yield amounts to 2.15 percent and the beta ratio has a value of 1.23.


Long-Term Stock Price Chart Of ABM Industries (ABM)
Long-Term Dividend Payment History of ABM Industries (ABM)
Long-Term Dividend Yield History of ABM Industries (ABM)

1st Source Corporation (NASDAQ:SRCE) has a market capitalization of $775.16 million. The company employs 1,180 people, generates revenue of $182.08 million and has a net income of $49.63 million. 1st Source Corporation’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $100.63 million. The EBITDA margin is 43.20 percent (the operating margin is 32.49 percent and the net profit margin 21.30 percent).

Financial Analysis: The total debt represents 5.32 percent of 1st Source Corporation’s assets and the total debt in relation to the equity amounts to 43.37 percent. Due to the financial situation, a return on equity of 9.04 percent was realized by 1st Source Corporation. Twelve trailing months earnings per share reached a value of $2.17. Last fiscal year, 1st Source Corporation paid $0.66 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 14.67, the P/S ratio is 3.33 and the P/B ratio is finally 1.38. The dividend yield amounts to 2.13 percent and the beta ratio has a value of 0.88.


Long-Term Stock Price Chart Of 1st Source Corporation (SRCE)
Long-Term Dividend Payment History of 1st Source Corporation (SRCE)
Long-Term Dividend Yield History of 1st Source Corporation (SRCE)

*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.