13 Dividend Growth Potentials With Really Cheap Price Ratios

Stocks with dividend growth potential and cheap price ratios originally published at "long-term-investments.blogspot.com". I often publish sheets and lists of dividend growth stocks. Mostly I use Dividend Champions, Achievers or Contender lists. All stocks from the lists have a consecutive dividend growth of more than 10 years.

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.

My Best Financial Stock Picks For 2013 | Do Financial Stocks Recover?

Buy shares low, hold them and sell high. That’s a very easy and simple strategy but investing is much more than buying stocks and waiting until the price goes up. You have to select the best stocks by fundamentals, business model, market strength, price ratios and so on. Investing is hard work and your emotions shouldn’t be a part of your selection process. Do you lose money with a trade? Don’t care that’s part of the business of a stock trader. Take care that your single trade positions are not big in relation to your trading limits or margins. They should account for less than 1 percent of your net worth.

Today, I like to screen the financial sector by the best growth stock picks for 2013. The whole sector has too many stocks listed, around 2,868 - No wonder that we need a consolidation with the financial crisis. Stocks from the sector are totally valuated at 168.25 trillion. The average P/E amounts to 13.04 and the yield is 2.45. What do you think, are stocks from the financial sector cheap or right to buy now? Let me know in the comment box bellow.

These are my criteria:

- Forward P/E under 15

- Past 5Y Sales growth over 10 percent

- Earnings per share growth for the next five years over 10 percent

- Operating Margin over 10 percent

- Market Capitalization over 2 billion

Eleven stocks remain of which six have a current buy or better rating. Ten of the results pay dividends. I am not a big fan of financial stocks because I could not evaluate the risks of the banking assets. I like stocks from services stocks with financial relations like Thomson Reuters, Moodys or Nasdaq.

The Best Dividend Paying Stocks From The S&P 500

Best Dividend Paying Stocks From The S&P 500 Index Researched By “long-term-investments.blogspot.com”. The Standard & Poor’s 500 Index is of huge importance for investors and the capital market. The index is one of the most used instruments for the asset allocation and reflects the mood at the market. The index has over USD 5.58 trillion benchmarked, with index assets comprising approximately USD 1.31 trillion of this total. The index includes 500 leading companies in leading industries of the U.S. economy, capturing 75 percent coverage of U.S. equities.

The index also captures the best dividend paying companies in the world. From 500 stocks, 401 pay great dividends and 132 yielding over three percent. I made a small screen of the best dividend paying stocks within the index. I selected stocks with a yield over two percent, an earnings per share growth for the next five years of more than ten percent yearly and an operating margin above 15 percent. In order to get companies with low debt and high potential for growth or dividend hikes, the debt to equity ratio should be under 0.5. Seventeen companies fulfilled my criteria of which thirteen have a buy or better rating.