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Top 5 Undervalued Predictable Companies with the Highest Yields
Posted by: Dianne Tordillo (IP Logged)
Date: November 28, 2012 01:08PM
Below are five undervalued companies that are not only ranked high in Business Predictability, but also have the highest dividend yield percentages among the list, according to GuruFocus Undervalued Predictable Company Screener.
United-Guardian Inc. (UG)
New York-based United-Guardian Inc. has a dividend yield of 4.7 percent. GuruFocus gives it a 5-star rating in Business Predictability.
Founded in 1942, United-Guradian conducts research, as well as develops and manufactures products such as pharmaceuticals, cosmetic ingredients, health care products, medical devices and proprietary industrial products, supplying to as far as Canada, Mexico, South America, Central America, Europe and Asia. It’s been granted more than 30 patents and has more than 100 products under development.
United-Guardian has a market cap of $81.9 million, and is trading at $17.37. Its dividend payout has been steady over the years, from positive sales and revenue increases due to the success of its products. Currently, its dividend payout ratio is 0.86.
In its 2011 annual report released in April, Ken Globus, United-Guardian president, said the following statement:
“In 2011, the Board of Directors declared two semi-annual dividends totaling $0.80 per share, a 27% increase over the $0.63 per share in dividends that the Board declared in FY-2010. This is the 16th consecutive year that we have paid a dividend, and once again we are very happy to be able to share our continued success with our stockholders. As those of you who have been our stockholders for a while know, our stock price over the past few years has risen steadily. We believe that the increase in earnings and dividend payments that we have experienced is the primary reason for this. As a result, our stock has come to the attention of people who otherwise may not have taken notice, and that has increased the daily trading volume of our stock as well.”
Gurus who have holding of United-Guardian include Mario Gabelli and Jim Simons (UG: GuruTrades). To review its financial data, visit 10-Year Financials.
Intel Corp. (INTC)
Intel Corp. has a dividend yield of 4.6 percent. GuruFocus gives it a 4-star rating in Business Predictability.
With a market cap of $98.71 billion, Intel Corp. develops an expansive list of computing devices and technologies such as processors, Ethernet products, TVs, smart phones, tablets, motherboards, chipsets and more. It is currently trading at $19.90, close to its two-year low.
With a dividend payout ratio of 0.39, Intel’s diluted earnings per share over the years have undergone drastic increases, dispersing $0.77 in 2009, $2.01 in 2010 and $2.39 in 2011.
In its third quarter news release, Intel announced generating about $5.1 billion in cash from operations, paying $1.1 billion in dividends and $1.2 billion to repurchase stock.
Gurus who have holding of Intel include Meridian Funds, Louis Moore Bacon and Joel Greenblatt (INTC: Guru Trades). To review its financial data, visit 10-Year Financials.
Nicholas Financial Inc. (NICK)
Florida-based Nicholas Financial Inc. has a dividend yield of 3.9 percent, close to its one-year high. GuruFocus gives it a 4-star rating in Business Predictability.
Through branch offices, Nicholas Financial is a finance company that provides direct consumer loans and purchases installment sales contracts from automobile dealers in the Southeast and Midwest. It has been a publically traded company since 1987, has a market cap of $147.6 million and trading at $12.52 per share.
Nicholas Financial has a dividend payout ratio of 0.26. In its fiscal year that ended March 31, the company reported increases in net income by 32 percent, revenue that increased 9 percent, and an earnings per share that increased 31 percent, comparing year-over-year data.
In its 2012 annual report, Nicholas Financial chairman, CEO and president, Peter VoSotas stated:
“We are disappointed that our stock price has not matched the financial performance of our company…In August of 2011 our board of directors approved the issuance of a cash dividend equal to $.10 cents per share. The company issued a dividend each quarter since then and expects to continue to do so, provided that the company meets or exceeds financial measurements imposed by its consortium of lenders. Our board will review and determine how much return they believe the company can pay out to its shareholders without impeding our growth objectives. We are pleased to report that we returned over $3 million in the form of cash dividends to our shareholders. Additionally we paid down our credit line by $6 million dollars.”
Gurus who have holding of Nicholas Financial include Jim Simons and Tom Gayner (NICK: Guru Trades). To review its financial data, visit its 10-Year Financials.
Darden Restaurants Inc. (DRI)
Darden Restaurants Inc. has a dividend yield of 3.7 percent, close to its three-year high. GuruFocus gives it a 5-star rating in Business Predictability.
With a market cap of $6.88 billion, Florida-based Darden is a world-wide restaurant company that operates more than 2,000 restaurants. Some of its chains include Red Lobster, Olive Garden, LongHorn Steakhouse, The Capital Grille, Bahama Breeze, 23 Seasons 52, Eddie V’s Prime Seafood and Wildfish Seafood Grille. It is currently trading at $53.22, close to its 10-year high.
Darden has a dividend payout ratio of 0.55. In June, it announced a quarterly dividend of $0.50 per share, which was dispersed Aug. 1, compared to $0.43 around the same time last year. Darden has previously declared its annual dividend is $2.00 per share, which was a 16.3 percent increase year-over year.
Several Gurus have holding of Darden including John Hussman, Jim Simons and David Dreman (DRI: Guru Trades). To review its financial data, visit 10-Year Financials.
National Bankshares Inc. (NKSH)
National Bankshares has a dividend yield of 3.6 percent close to its one-year high. GuruFocus gives it a 4-star rating in Business Predictability.
Headquartered in Southwest Virginia, National Bankshares is a community bank holding company, which serves as the parent company to National Bank and insurance/brokerage subsidiary, National Bankshares Financial Services. It has 25 office locations in Southwest Virginia, has a trade price of $30.96 and has a market cap of $217.4 million.
On Nov. 14, National Bankshares announced a semi-annual dividend of $0.57 per share to all stockholders, to be paid on Dec. 1. The dividend is 9.6 percent higher than the semi-annual dividend paid in December of last year.
Currently, National Bankshares has a dividend payout ratio of 0.41, experiencing a positive growth trend line.
Gurus who have a holding of National Bankshares include Jim Simons and Chuck Royce (NKSH: Guru Trades). To review its financial data, visit 10-Year Financials.
About the GuruFocus Undervalued Predictable Company Screener
The GuruFocus Undervalued Predictable Premium Feature uses discounted cash flow and discounted earnings and applies them to the top-ranked predictable companies for calculating intrinsic values. It gives users the option to screen by country, market cap or sector, as well as the option to further organize the companies by enabling the download of a customizable spreadsheet containing the list.
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To read more about related topics, visit the following articles and submissions on GuruFocus:
What Worked in the Market - Part III: Intrinsic Value, Discounted Cash Flow and Margin of Safety
Recent Changes to the GuruFocus DCF Calculator
Focusing on Predictable Companies, Value Strategies Continue to Outperform
Intel, Intel, Undervalued Star
Cisco: Switch to this Undervalued Dividend Growth Stock to Boos Your Retirement Portfolio
Equal Energy: Still Undervalued with Several Near-Term Catalysts
Terra Energy: A Grossly Undervalued Gem at the Energy Patch
Guru Discussed: Jim Simons: Current Portfolio, Stock Picks
Chuck Royce: Current Portfolio, Stock Picks
Stocks Discussed: UG, INTC, NICK, DRI, NKSH,
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