Before investors blindly pile in here, they need to consider that “cheap stocks” are almost always cheap for a reason.
That reason may be the company’s business segment, it may be due to missteps by management or it may be due to outside pressures that make investors nervous.
Generally speaking, stocks trading under 10 times earnings do not have much growth. Growth stocks tend to be valued at multiples above the market, if their growth trend is expected to continue.
In todays screen for stocks under 10 times earnings, we evaluated large-cap companies, with easily recognized company names in mind.
Only one of these eight stocks have a market value under a baseline of $1 billion to $10 billion and three are valued over $10 billion, a measure for large cap companies.
These stocks all have raised dividends over more than 10 consecutive years while the forward P/E is below 10. The valuations of 10 times earnings and less were based on Thomson Reuters consensus estimates for 2015 and 2016.
Here are the results of the cheapest Dividend Achievers:
Thanks to weak global economics and the much hyped rate hike by the Federal Reserve, it doesn’t appear as though the broader market are poised to resume their nascent rise anytime soon.
That doesn’t mean investors should shun stocks. It means investors need to be more discriminating in what they add to their portfolio.
If you want to follow in the footsteps of legendary investors like Warren Buffett, Peter Lynch, and John Neff, then keep your eye out for high dividend-yielding stocks with lots of free cash flow, and strong fundamentals.
Free cash flow is the amount of “free cash,” or money left over after it pays for operations and necessary capital expenditures.
The more money a company has in the bank, the greater the chances are it can sustain or increase its high dividend yield, buy back shares, expand its business, or pay down debt. And ultimately, increase shareholder value.
One of the most common ways to calculate the free cash flow yield is to take the amount of free cash flow the company generates per share and divide it by the share price. Another popular way (and the equation I am using) is to divide the company’s free cash flow by the market cap.
The higher the ratio, the more attractive the investment.
Below are 5 top stocks with high dividends and a big free cash flow that gives potential to pay high dividends in crisis times and hike them too.
These are the results....
The current market environment is presenting many challenges to the conservative retired investor in need of current income. Interest rates are near all-time lows and the valuations of many blue-chip dividend growth stocks have become extended.
Consequently, it is becoming very difficult to find quality investment opportunities that can provide safety through sound valuation, attractive yield and the potential to fight inflation.
Most of my recent work has been focused on presenting attractively valued, high quality, higher yielding dividend growth stocks for consideration by retired investors. Consequently, my primary focus has been on above-average yield, safety and dividend growth. Stated more plainly, my objective was to present high quality income and income growth investments over total return investments.
Attached you can find a few of my latest screening results. I've done a lot in terms of beta, also a measure of market volatility. I believe that the ratio tells investors something about the risk of the stock.
Here are my criteria:
-Low Forward P/E (under 15)
-Low Debt To Equity (under 0.5)
-Earnings Growth over 5% for the next five years
-Market Cap over 2 billion
-Dividends hiked over 10 consecutive years
These are my favorite stocks...
Let's take a look at last week's dividend growth stocks. In total, only 10 stocks raised dividend payments. The biggest and well-known names are Accenture, Lockheed Martin. Both stocks also announced a buyback programe.
Which of the stocks do you like? Are they fairly priced in your view?
Attached is a small sheet of all stocks with Ex-Dates, Payment Date, increasing rate and total payment amount. You will also find a sheet with the latest Buyback announcements of the past week.
Bed Bath & Beyond, Paccar, Metlife, AmerisourceBergen were the biggest stocks on the list.
These are the results...
Here I share all higher capitalized stocks going ex-dividend next week. A huge number of stocks plan to go ex-dividend, in total 271 dividend stocks. 132 of them are capitalized over 2 billion. Attached you can find those stocks with the highest payment
A full list of next weeks ex-dividend stocks can be found here: Ex-Dividend Stocks Of The Next Week Sep. 28 – Oct. 04, 2015.
If we focus more on cheap stocks than on high yields, Dow Chemical, Toronto-Dominion Bank, Nucor, Agrium, Cisco, Steel Dynamics, PG&E, are the top picks. Not included are REITs. Those pay typically high dividends but offer also huge debt burdens.
