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Ideas for Income Investors. High Dividend Stocks, Mutual Funds etc.
6 High-Dividend, Low-P/E Value Stocks
Posted by: Dividends4Life (IP Logged)
Date: March 13, 2013 09:15AM
Before the Internet and even before computers, critical financial information was printed daily in newspapers. Though many newspapers still print this information, most people find it easier (and faster) to get information on their stocks from financial websites. So back when financial information was a tedious and manual process, what was considered relevant enough to warrant inclusion?
Obviously the reader would want basic information like the stock's ticker symbol, volume, closing price and possibly high and low price for the day or last 52 weeks. Dividend yield was another piece of useful information often presented. One of the more interesting pieces of information presented was the P/E ratio.
The P/E ratio is one of the oldest metrics used. It is calculated as the market value per share divided by earnings per share (EPS). A high P/E ratio implies that investors expect strong future earnings growth, or the stock is over valued. Conversely, a low P/E suggests limited future growth, or the stock is under valued. Companies with limited growth projects to consume resources have historically been in a position to return large sums of cash to their shareholders as dividends and share buybacks.
This week, I screened my dividend growth stocks database for stocks with a single-digit P/E ratio and with a dividend yield above 3%. The results are presented below:
Chevron Corporation (CVX) is a global integrated oil company (formerly ChevronTexaco) with interests in exploration, production, refining and marketing, and petrochemicals. The company has paid a cash dividend to shareholders every year since 1912 and has increased its dividend payments for 25 consecutive years.
Yield: 3.1% | P/E: 8.76
Republic Bancorp Inc. (RBCAA) provides banking, mortgage banking, and tax refund solutions to individuals and businesses in the U.S. The company has paid a cash dividend to shareholders every year since 2000 and has increased its dividend payments for 8 consecutive years.
Yield: 3.0% | P/E: 3.84
Raytheon Company (RTN), the world's sixth largest military contractor, specializes in making high-tech missiles, advanced radar systems and sensors, defense electronics and missile-defense systems. The company has paid a cash dividend to shareholders every year since 1964 and has increased its dividend payments for 8 consecutive years.
Yield: 3.7% | P/E: 9.94
Intel Corporation (INTC) is the world's largest manufacturer of microprocessors, the central processing units of PCs, and also produces other semiconductor products. The company has paid a cash dividend to shareholders every year since 1964 and has increased its dividend payments for 8 consecutive years.
Yield: 4.3% | P/E: 9.83
ConocoPhillips Co. (COP) is one of the largest independent oil and gas exploration and production (E&P) companies in the world, COP spun off its downstream assets in May 2012. The company has paid a cash dividend to shareholders every year since 1934 and has increased its dividend payments for 12 consecutive years.
Yield: 4.5% | P/E: 8.63
Main Street Capital Corporation (MAIN) is a business development company specializing in equity, equity related, and debt investments in small and lower middle market companies. The company has paid a cash dividend to shareholders every year since 1992 and has increased its dividend payments for 2 consecutive years.
Yield: 5.6% | P/E: 8.85
As with past screens, the data presented above is in its raw form. Some of the the companies would be disqualified for poor dividend fundamentals. However some of the others may be worth additional due diligence.
My database, D4L-Data, is an Open Office spreadsheet containing more than 20 columns of information on the 220+ companies that I track. The data is sortable and has built-in buttons and macros to make it easy to use. Companies included in the list are those that have had a history of dividend growth. The D4L-Data spreadsheet is a part of D4L-Premium Services and is updated each Saturday for subscribers.
Full Disclosure: Long CVX, RTN, INTC, COP, in my Dividend Growth Portfolio and lonf MAIN in my High-Yield Portfolio. See a list of all my dividend growth holdings here.
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Stocks Discussed: CVX, RTN, INTC, COP, MAIN, RBCAA,