Basic material dividend stocks with highest
expected growth and low price ratios originally published at "long-term-investments.blogspot.com". Good stocks to buy
are hard to find. But what are good stocks?
Good investment indicators
Primarily it’s a question of your investment
philosophy or screening criteria. I am focused on dividend stocks with great
yields, strong market positions and low limitations to grow. I also invest into
stocks with no yields or low dividend payments.
Don’t look at the yield alone
The dividend yield is only an expression and
should never be a single investment criterion. I know so many people who only
look at the P/E ratio and the dividend yield and argue that the stock is cheap
at a P/E below 10. That’s too easy. If the company has no debt, you should look
the enterprise value.
Growth is the value driver
More important is growth. If a company doubles
every 3 years sales and earnings, it’s normal that the stock is highly
valuated. Stock valuation is a very complex area.
Today I like to screen some opportunities from
the basic material sector. 595 stocks are available with a relationship to the
raw material sector – nearly 300 of them pay dividends. The average sector P/E ratio
amounts to 11.08 at a yield of 2.98 percent.
I screened large capitalized stocks with very high
expected earnings per share growth for the next five years (over 10 percent) and
a low forward P/E ratio of less than 15. Seventeen stocks fulfilled my criteria
of which twelve are currently recommended to buy. Two High-Yields are below the
results.