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:
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.
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| Long-Term Stock History Chart Of AFLAC (AFL) |
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| Long-Term Dividends History of AFLAC (AFL) |
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| 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.
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| Long-Term Stock History Chart Of General Dynamics (GD) |
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| Long-Term Dividends History of General Dynamics (GD) |
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| 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.
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| Long-Term Stock History Chart Of Corning (GLW) |
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| Long-Term Dividends History of Corning (GLW) |
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| 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):
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| 13 Cheapest Dividend Growth Potentials (Click to enlarge) |
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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.
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