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My 3 Favorite Safe Stocks from the Financial Sector
Posted by: Dividend (IP Logged)
Date: April 10, 2013 09:10AM

The financial sector is still under fire. Low interest rates and higher risks within the bond buying industry make it hard to earn money on investments. As a result, thousands of people lose their job and the sector is shrinking. Bank of America cut its workforce by over 30,000 people and its competitors follow.

Not everything is bad within the financial sector. If you have followed my screens over the past months, you could find there are more and more good-looking banks and asset managers as well as insurers.

Today I discover the best-yielding dividend stocks from the financial sector with real safe heaven characteristics. My criteria are:

- Market capitalization over USD10 billion
- Beta ratio below 1

The stock should have a lower volatility than the overall market. For sure, these are not the only trigger ratios to seek out the highest degree of stability for a stock. Especially in the financial sector are more risks than in other industries. Banks are still black boxes because you never know what kind of risk exposure they have in detail.

The screen produced 17 stocks of which two have a double-digit yield. Eight of them are currently recommended to buy.

Here are my favorite stocks:

Public Storage (PSA) has a market capitalization of $26.99 billion. The company employs 5,000 people, generates revenue of $1.826 billion and has a net income of $930.16 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1.229 billion. The EBITDA margin is 67.32 percent (the operating margin is 47.73 percent and the net profit margin 50.92 percent).

Financial Analysis: The total debt represents 5.33 percent of the company’s assets and the total debt in relation to the equity amounts to 5.79 percent. Due to the financial situation, a return on equity of 12.59 percent was realized. Twelve trailing months earnings per share reached a value of $3.83. Last fiscal year, the company paid $4.40 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 41.08, the P/S ratio is 14.78 and the P/B ratio is finally 5.12. The dividend yield amounts to 3.18 percent and the beta ratio has a value of 0.94.

Travelers Companies (TRV) has a market capitalization of $32.23 billion. The company employs 30,000 people, generates revenue of $25.740 billion and has a net income of $2.473 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $8.281 billion. The EBITDA margin is 32.17 percent (the operating margin is 12.30 percent and the net profit margin 9.61 percent).

Financial Analysis: The total debt represents 6.05 percent of the company’s assets and the total debt in relation to the equity amounts to 25.00 percent. Due to the financial situation, a return on equity of 9.84 percent was realized. Twelve trailing months earnings per share reached a value of $6.28. Last fiscal year, the company paid $1.79 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 13.58, the P/S ratio is 1.25 and the P/B ratio is finally 1.27. The dividend yield amounts to 2.16 percent and the beta ratio has a value of 0.67.

The Bank of New York Mellon (BK) has a market capitalization of $32.20 billion. The company employs 49,500 people, generates revenue of $3.507 billion and has a net income of $2.523 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $4.928 billion. The EBITDA margin is 140.52 percent (the operating margin is 22.69 percent and the net profit margin 17.33 percent).

Financial Analysis: The total debt represents 7.71 percent of the company’s assets and the total debt in relation to the equity amounts to 75.97 percent. Due to the financial situation, a return on equity of 6.97 percent was realized. Twelve trailing months earnings per share reached a value of $2.04. Last fiscal year, the company paid $0.52 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 13.61, the P/S ratio is 2.21 and the P/B ratio is finally 0.91. The dividend yield amounts to 1.88 percent and the beta ratio has a value of 0.90.

Take a closer look at the full list of the safest financial dividend stocks. The average P/E ratio amounts to 18.74 and forward P/E ratio is 16.66. The dividend yield has a value of 3.72 percent. Price to book ratio is 2.31 and price to sales ratio 5.31. The operating margin amounts to 26.81 percent and the beta ratio is 0.72. Stocks from the list have an average debt to equity ratio of 1.86.

Related stock ticker symbols:
AGNC, NLY, BCH, HCN, BSAC, PSA, MTB, MMC, MTU, NTRS, ACE, TRV, CB, BK, AMT, PGR, AON

Selected Articles:
· Financial Dividend Stocks: The Best Yielding Growth Opportunities
· 20 Highly Recommended Financial Dividend Shares | Stock Buy List
· My Best Financial Stock Picks For 2013
· Best Financial Stock Picks For 2012

*If you would like to receive more dividend stock ideas and the free Dividend Weekly, you should subscribe to my free e-mail list. Alternatively, you can follow me on Facebook or Twitter.

Financial stocks with low beta ratios and high market capitalization originally published at long-term-investments.blogspot.com.


Stocks Discussed: AGNC, NLY, BCH, HCN, BSAC, PSA, MTB, MMC, MTU, NTRS, ACE, TRV,
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