14 Dividend Paying Stocks With Low P/E's And High Returns On Invested Capital

I built a screen that I would like to share that acts as a starting point in identifying quality stocks that have great historical returns on invested capital and relatively low current valuations.

Only companies that had a market cap over $1 billion and headquarters located in the U.S. were included.

I used EBIT as the earnings metric, so it is not a perfect after-tax return on invested capital. I calculated invested capital two ways, one with goodwill, and one without goodwill.

In addition, each of stocks has a low forwad P/E, a positive dividend yield and payout ratios below 52 percent. The return on assets is between 7.50% and  32.70%.

14 stocks fulfilled my critera.

These are the results...

14 Dividend Paying Stocks With Low P/E's
And High Returns On Invested Capital
(click to enlarge)

These 20 Stocks Could Benefit From Higher Rates

The current problem on the market could be descried with the following sentence: Rising rates could let to a falling dollar. 

In contraction, Investors expect the US Dollar to rally, undermining equities and furthering headwinds to S&P 500 EPS and also amplified stress for EM borrowers (USD denom. debt). 

History says that the consensus is wrong and counters intuitively, when the Fed moves to neutral from easy (11 most recent cycles), USD weakened 55% of the time, with a median decline of 7% in the first year.

Below I've implemented screen results of stocks that might benefit from rising rate hikes. Stocks from the screen have fulfilled the following criteria:

Stock selection criteria...

(i) Stock’s price correlation to the USD (DXY Index) from 5/2014 – 3/2015 is less than -0.40

(ii) Mean implied upside based on analyst target prices is positive

(iii) P/E (‘15E and ‘16E) is below 25X but consensus EPS is positive

(iv) FCF yield is above 3%

(v) Company beat consensus EPS expectations the last 2 quarters.

Here are the 20 best yielding results in detail....

A Quick View On The Dogs Of The Nasdaq 100

Recently, I wrote about the current Dogs of the Dow and gave you a nice overview about the cheapest and highest yielding stocks from the large cap index Dow Jones that offer growth potential.

Some of you have agreed by the names I've introduced these but the index members of the Dow Jones still offer true values and long-term growth.

However, today I would like to share the Dogs of the NASDAQ with you.

Right, the cheapest and highest yielding stocks from the technology exchange. A decent number of stocks also pay dividends there. In total, there are 55 dividend stocks, more than half of the members.

The initial yield of the technology dominated index starts at 0.75% and ends at 6.99%, paid by Mattel.

Check the top Dogs of the NASDAQ here:

5 Stocks Warren Buffett Keeps An Eye On...

Attached are five more stocks with fundamentals that meet Warren Buffett target criteria. 

I've introduced a few more stocks in this blog earlier this month and I believe that it's a good tool to get new stock ideas in a hot market.

The markets are not cheap for the time being and high-quality stocks have a much higher premium rate. But the good thing is that this should not make it impossible to find new investment targets.

You must have patience to get the right investments at the right prices. Only the disciplined investor makes the better return.

5 stocks with Warren Buffett like criteria are...

41 Stocks And Funds Hiked Dividends Last Week

Stocks with dividend hikes from last week originally published at “long-term-investments.blogspot.com”. Last week, additional 41 stocks and funds announced to raise dividends. The average dividend growth amounts to 34.59 percent. On the list are some big Players from the financial sector like JP Morgan Chase or W.R. Berkley. Also the tech giant Hewlett-Packard raised its dividend by 10 percent despite the operational problems. Twelve companies announced to pay a first dividend ever and ten stocks reduced its payments last week.

The good thing is that dividend growth is definitely stronger established than dividend cuts.

Wireless Communications And Cable Company Rogers Is New In My Dividend Yield Passive Income Portfolio

Last Thursday, I placed 30 shares of the Canadian wireless communication company Rogers in the Dividend Yield Passive Income Portfolio (DYPI).

Rogers operates as a communications and media company in Canada. The company's Wireless segment offers voice and high-speed data services, as well mobile devices and accessories. It markets its products and services under the Rogers, Fido, and chatr brands. Its Cable segment offers cable television, high-speed Internet access, and cable telephony services. As at December 31, 2012, this segment had 2.2 million television subscribers; and 1.9 million high-speed Internet subscribers, as well as provided home phone services to approximately 1.1 million customers.

I like stocks with a cable business. At the stock market, they are classified as CATV Sytems. They give you a great stability due to subscriptions. Comcast or DIRECTV are also two great company from the United States. Cable companies are deeply integrated within an economy. They have normally a high debt and are inflexible in terms of growth but they are part of the economy and deliver solid return to pay down the debt. Canada is a great country with better financial ratios than the United States. The population is growing in both countries and will go forward. That's why I like cable stocks.

Earnings And Dividends Of Rogers (Click to enlarge)

The current dividend of Rogers amounts to 3.33 percent and the P/E ratio is 15.76. Earnings of the company are expected to grow by 4.3 for the next year and 9.63 percent for the next five years. CATV System stocks have a higher forecasted growth.

The 30 shares were bought at cost of $51.06 and reduced my cash by $1,536.80. As of now I still have $62,997.85 for further dividend stock acquisitions.

The DYPI-Portfolio was funded virtual with $100,000 on October 03, 2012. Since the date of funding, stock holdings are up 8.74 percent or $3,260.80.

Dividend Yield Passive Income Portfolio Holdings (Click to enlarge)

Latest Portfolio Transactions (Click to enlarge)

Due to the high cash amount (60 percent is still not invested) the full portfolio performance is only 3.50 percent.

Portfolio Performance (Click to enlarge)

I plan to put each week one stock holing into the DYPI-Portfolio. My aim is to build a passive income of $3,000 - $4,000 by the end of the year. Dividend payments should come from 50 to 70 stocks. The average portfolio yield is now at 3.32 percent and the yield on cost, the yield on my cost basis is at 3.62 percent because of the capital gains.

The new stake will give me $48.69 in additional yearly dividends. The full dividend income is now estimated at $1,357.76.

What do you think about Rogers Communications? Do you own shares of the compay or would you put other stocks into the portfolio? Please let me know by leaving a comment on my Facebook page. If you visit my site, you can also make a like for my work. My work is completly free for everybody.

Here is the income perspective of the Dividend Yield Passive Income Portfolio:

Sym	Name	P/E Ratio	Dividend Yield		Buy	# Shrs	Income	Value
TRI	Thomson Reuters C	12.97	3.98		28.90	50	$64.25	$1,624.00
LMT	Lockheed Martin C	11.3	4.55		92.72	20	$86.00	$1,930.40
INTC	Intel Corporation	10.25	4.05		21.27	50	$44.25	$1,091.75
MCD	McDonald's Corpor	18.45	2.97		87.33	15	$44.10	$1,495.35
WU	Western Union Com	8.8	3.02		11.95	100	$45.00	$1,504.00
PM	Philip Morris Int	17.79	3.65		85.42	20	$67.18	$1,854.20
JNJ	Johnson & Johnson	21.05	3		69.19	20	$48.80	$1,630.60
MO	Altria Group Inc	16.71	5.03		33.48	40	$69.20	$1,375.60
SYY	Sysco Corporation	19.24	3.11		31.65	40	$43.60	$1,406.80
DRI	Darden Restaurant	15.45	3.81		46.66	30	$57.90	$1,550.40
CA	CA Inc.	12.71	4		21.86	50	$50.00	$1,259.00
PG	Procter & Gamble	17.49	2.92		68.72	25	$56.20	$1,926.50
KRFT	Kraft Foods Group	18.68	3.88		44.41	40	$80.00	$2,061.20
MAT	Mattel Inc.	19.52	2.98		36.45	40	$51.60	$1,750.80
PEP	Pepsico Inc. Com	19.96	2.75		70.88	20	$43.00	$1,582.20
KMB	Kimberly-Clark Co	21.93	3.13		86.82	15	$45.45	$1,469.70
COP	ConocoPhillips Co	8.98	4.39		61.06	20	$52.80	$1,202.00
GIS	General Mills In	17.87	2.65		42.13	30	$38.85	$1,479.30
UL	Unilever PLC Comm	20.84	3.02		39.65	35	$43.89	$1,478.40
NSRGY	NESTLE SA REG SHR	20.08	2.95		68.69	30	$63.15	$2,174.10
GE	General Electric	17.88	3.12		23.39	65	$46.80	$1,502.80
ADP	Automatic Data Pr	22.55	2.57		61.65	25	$41.50	$1,625.75
K	Kellogg Company C	24.19	2.71		61.52	25	$43.75	$1,610.75
KO	Coca-Cola Company	20.42	2.6		38.83	40	$41.80	$1,617.60
RTN	Raytheon Company	10.54	3.42		57.04	20	$40.00	$1,175.80
RCI	Rogers Communicat	15.27	3.2		51.06	30	$48.69	$1,531.80
							$1,357.76	$40,910.80
							Average Yield	3.32%
							Yield On Cost	3.62%