If you have read my blog for a longer time, you would have noticed that I often write about dividend growth stocks and dividends in general. One dividend growth category is the Dividend Challengers category. Those stocks have raised their dividend cash payments to shareholders over a period of more than 5 consecutive years but less than 10 years in a row.
Because of the rising market valuation, I wanted to know which of the Dividend Challengers are still fair or even cheap priced compared to its growth forecasts by analysts.
I selected all stocks from the dividend growth category with a market cap over $10 billion and a low forward P/E below 15. In addition, the expected earnings per share growth should be above 5 percent yearly. Exactly 20 companies fulfilled these criteria.
14 of the results have a current buy or better rating and five stocks yielding over the three percent mark.
Here are my favorite stocks:
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Intel Corporation (NASDAQ:INTC) has a market capitalization of $113.20 billion. The company employs 105,400 people, generates revenue of $53.341 billion and has a net income of $11.005 billion. Intel's earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $22.160 billion. The EBITDA margin is 41.54 percent (the operating margin is 27.44 percent and the net profit margin 20.63 percent).
Financial Analysis: The total debt represents 15.94 percent of Intel’s assets and the total debt in relation to the equity amounts to 26.26 percent. Due to the financial situation, a return on equity of 22.66 percent was realized by Intel Corporation. Twelve trailing months earnings per share reached a value of $1.85. Last fiscal year, the Intel Corporation paid $0.87 in the form of dividends to shareholders. Forward P/E: 11.53. The 5-Year earnings per share growth of INTC is expected at 11 percent.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 12.30, the P/S ratio is 2.12 and the P/B ratio is finally 2.20. The dividend yield amounts to 3.95 percent and the beta ratio has a value of 1.00.
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| Long-Term Stock Price Chart Of Intel Corporation (INTC) |
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| Long-Term Dividend Payment History of Intel Corporation (INTC) |
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| Long-Term Dividend Yield History of Intel Corporation (INTC) |
Smith & Nephew (NYSE:SNN) has a market capitalization of $10.98 billion. The company employs 10,477 people, generates revenue of $4.137 billion and has a net income of $729.00 million. Smith & Nephew’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1,.242 billion. The EBITDA margin is 30.02 percent (the operating margin is 20.45 percent and the net profit margin 17.62 percent).
Financial Analysis: The total debt represents 8.29 percent of Smith & Nephew’s assets and the total debt in relation to the equity amounts to 12.05 percent. Due to the financial situation, a return on equity of 20.62 percent was realized by Smith & Nephew. Twelve trailing months earnings per share reached a value of $3.94. Last fiscal year, Smith & Nephew paid $1.30 in the form of dividends to shareholders. Forward P/E: 14.33. The 5-Year earnings per share growth of SNN is expected at 7.85 percent.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 15.37, the P/S ratio is 2.62 and the P/B ratio is finally 2.82. The dividend yield amounts to 2.15 percent and the beta ratio has a value of 0.71.
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| Long-Term Stock Price Chart Of Smith & Nephew (SNN) |
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| Long-Term Dividend Payment History of Smith & Nephew (SNN) |
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| Long-Term Dividend Yield History of Smith & Nephew (SNN) |
Gap (NYSE:GPS) has a market capitalization of $20.88 billion. The company employs 136,000 people, generates revenue of $15.651 billion and has a net income of $1.135 billion. Gap’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $2.510 billion. The EBITDA margin is 16.04 percent (the operating margin is 12.41 percent and the net profit margin 7.25 percent).
Financial Analysis: The total debt represents 16.68 percent of Gap’s assets and the total debt in relation to the equity amounts to 43.05 percent. Due to the financial situation, a return on equity of 40.18 percent was realized by Gap. Twelve trailing months earnings per share reached a value of $2.57. Last fiscal year, Gap paid $0.50 in the form of dividends to shareholders. Forward P/E: 14.76. The 5-Year earnings per share growth of GPS is expected at 12.15 percent.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 17.49, the P/S ratio is 1.35 and the P/B ratio is finally 7.21. The dividend yield amounts to 1.33 percent and the beta ratio has a value of 1.33.
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| Long-Term Stock Price Chart Of Gap (GPS) |
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| Long-Term Dividend Payment History of Gap (GPS) |
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| Long-Term Dividend Yield History of Gap (GPS) |
Take a closer look at the full list of the cheapest large capitalized Dividend Challengers. The average P/E ratio amounts to 15.99
and forward P/E ratio is 13.02. The dividend yield has a value of 2.58 percent.
Price to book ratio is 3.57 and price to sales ratio 1.82. The operating margin
amounts to 19.35 percent and the beta ratio is 1.13. Stocks from the list have
an average debt to equity ratio of 0.67.
Here is the full table with
some fundamentals (TTM):
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| Cheapest Dividend Challengers (Click to enlarge) |
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Related Stock Ticker Symbols:
LO, RAI, INTC,
PM, RTN, CAG, BAX, SNN, TRV, AMP, CSX, PFG, COH, CCE, CMI, UNP, KR, NOV, GPS, MCK
Selected Articles:
*I am long INTC, LO, RTN, BAX,
SNN. 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.