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My 3 Favorite Safe Heaven Dividend Challengers
Posted by: Dividend (IP Logged)
Date: March 28, 2013 09:49AM

Some investors are greedy and tend to overlook risks. Others are too anxious and avoid buying stocks in a larger amount. They could “lose money” or they “can get quick rich” are two psychological factors that investors prevent to make real money with investing. Both are not true and only an illusion.

If you invest money into the stock market and you do it wisely and diversify, you should only count with a return close to the performance of the broad market. I believe that a return of 8 percent is realistic and good enough to beat inflation and grow wealth.

Today I screen a category of stocks with a longer dividend growth history, the Dividend Challengers. Those stocks have achieved dividend increases over a period of more than five years in a row but less than 10 years. There are 167 companies fulfilling these dividend growth criteria.

Below is a list of the safest stocks from the investment category "challengers." They have a beta ratio of less than 0.5 as well as a market capitalization over USD2.0 billion.

Twenty Dividend Challengers are on the list of the safest dividend income growth stocks and six of them have a high yield; nine are recommended to buy.

Here are my favorite stocks:

Boardwalk Pipelines (BWP) has a market capitalization of $6.65 billion. The company employs 1,200 people, generates revenue of $1.185 billion and has a net income of $306.00 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $726.10 million. The EBITDA margin is 61.27 percent (the operating margin is 39.98 percent and the net profit margin 25.82 percent).

Financial Analysis: The total debt represents 45.01 percent of the company’s assets and the total debt in relation to the equity amounts to 91.28 percent. Due to the financial situation, a return on equity of 7.43 percent was realized. Twelve trailing months earnings per share reached a value of $1.28. Last fiscal year, the company paid $2.13 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 22.58, the P/S ratio is 5.61 and the P/B ratio is finally 1.75. The dividend yield amounts to 7.39 percent and the beta ratio has a value of 0.24.

Kellogg (K) has a market capitalization of $23.38 billion. The company employs 31,000 people, generates revenue of $14.197 billion and has a net income of $962.00 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $2.010 billion. The EBITDA margin is 14.16 percent (the operating margin is 11.00 percent and the net profit margin 6.78 percent).

Financial Analysis: The total debt represents 52.04 percent of the company’s assets and the total debt in relation to the equity amounts to 326.66 percent. Due to the financial situation, a return on equity of 45.60 percent was realized. Twelve trailing months earnings per share reached a value of $2.68. Last fiscal year, the company paid $1.74 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 24.13, the P/S ratio is 1.66 and the P/B ratio is finally 9.65. The dividend yield amounts to 2.72 percent and the beta ratio has a value of 0.48.

General Mills (GIS) has a market capitalization of $31.55 billion. The company employs 35,000 people, generates revenue of $16.657 billion and has a net income of $1.500 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $3.103 billion. The EBITDA margin is 18.63 percent (the operating margin is 15.38 percent and the net profit margin 9.01 percent).

Financial Analysis: The total debt represents 35.22 percent of the company’s assets and the total debt in relation to the equity amounts to 115.70 percent. Due to the financial situation, a return on equity of 24.51 percent was realized. Twelve trailing months earnings per share reached a value of $2.71. Last fiscal year, the company paid $1.22 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 18.00, the P/S ratio is 1.89 and the P/B ratio is finally 4.93. The dividend yield amounts to 2.71 percent and the beta ratio has a value of 0.18.

Take a closer look at the full list of the safest early stage dividend growth stocks. The average P/E ratio amounts to 21.35 and forward P/E ratio is 16.09. The dividend yield has a value of 3.75 percent. Price to book ratio is 3.68 and price to sales ratio 3.38. The operating margin amounts to 18.99 percent and the beta ratio is 0.37. Stocks from the list have an average debt to equity ratio of 1.49.

Related stock ticker symbols:
BWP, APU, EPB, LO, OKS, SEP, DUK, VZ, CMS, XEL, CHL, WES, GIS, K, CPB, AWK, KGC, KR, SLGN, GOLD

Selected Articles:
· 19 High Yielding Income Growth Stocks With Low Debt Ratios
· 12 Safe Dividend Contenders With Low P/E Multiples
· 20 Most Recommended Dividend Aristocrats Index Stocks
· 13 High Quality Dividend Income Stocks

Our average reader has a net worth of more than $150,000 and earn over $12,000 passive incomes. 70% of them make over 30% of their capital return with dividends. Get the full details on these dividend growth philosophies and join our free community on our Facebook-Page. You can discuss your problems and figure out more ideas for growing your own wealth. If you would like to receive more dividend stock ideas and the free Dividend Weekly, you should subscribe to my free E-Mail list.

Dividend Challengers with low beta ratios originally published at long-term-investments.blogspot.com.


Stocks Discussed: BWP, APU, EPB, LO, OKS, SEP, DUK, VZ, CMS, XEL, CHL, WES, GIS,
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