Well, maybe not everyone. When stocks go on sale it seems to depress a large number of market participants. However, for those of us that like buying stocks at a discount, the recent market pullback has finally provided a little relief.
My fair value model was constructed back in 2007 at a time many stocks had already fell from grace. So to focus on only the best companies, I took an extremely conservative stance with my model.
Ultimately, determining fair value requires the investor to accurately determine free cash flow, dividend growth rates and such on a forward looking basis, which is no simple task.
This week week, I screened my dividend growth stocks database for stocks that are trading at a double-digit discount. The results are presented below:
CenturyLink, Inc. (CTL)
Yield: 7.4% | Discount: 10.9%
CenturyLink, Inc. provides voice service to 6.5 million customers and Internet service to 2.4 million customers in rural towns as well as larger cities such as Las Vegas.
Microsoft Corporation (MSFT)
Yield: 2.6% | Discount: 11.6%
Microsoft is the world's largest software company, develops PC software, including the Windows operating system and the Office application suite.
McDonald's Corporation (MCD)
Yield: 3.0% | Discount: 13.1%
McDonald's Corporation is the largest fast-food restaurant company in the world, with about 32,500 restaurants in 117 countries.
Stryker Corporation (SYK)
Yield: 1.2% | Discount: 14.1%
Stryker Corp. makes specialty surgical and medical products such as orthopedic implants, endoscopic items, and hospital beds.
Lockheed Martin Corp. (LMT)
Yield: 3.7% | Discount: 14.4%
Lockheed Martin Corp. is the world's largest military weapons manufacturer and is also a significant supplier to NASA and other non-defense government agencies receiving about 93% of its revenues from global defense sales.
AFLAC Incorporated (AFL)
Yield: 2.7% | Discount: 16.1%
Aflac Incorporated provides supplemental health and life insurance in the U.S. and Japan. Products are marketed at worksites and help fill gaps in primary insurance coverage. Approximately 80% of earnings comes from Japan and 20% from the U.S.
Lowe's Companies, Inc. (LOW)
Yield: 2.3% | Discount: 16.3%
Lowe's Companies, Inc. sells retail building materials and supplies, lumber, hardware and appliances through more than 1,700 stores in the U.S. and Canada.
Harleysville Group Inc. (HGIC)
Yield: 4.7% | Discount: 16.9%
Harleysville Group Inc. underwrites a broad array of personal and commercial coverages. These insurance coverages are marketed primarily in the Eastern and Midwestern United States.
Procter & Gamble (PG)
Yield: 3.0% | Discount: 19.4%
The Procter & Gamble Company is a leading consumer products company that markets household and personal care products in more than 180 countries.
Abbott Laboratories (ABT)
Yield: 3.6% | Discount: 24.9%
Abbott Laboratories is a diversified life science company and is a leading maker of drugs, nutritional products, diabetes monitoring devices, and diagnostics.
Walmart Stores Inc. (WMT)
Yield: 2.8% | Discount: 25.3%
Walmart Stores Inc. is the largest retailer in North America and operates a chain of discount department stores, wholesale clubs, and combination discount stores and supermarkets.
As with past screens, the data presented above is in its raw form. Some of the the companies would be disqualified for low yields and/or 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 200+ 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 CTL, MSFT, MCD, HGIC, PG, ABT, WMT. See a list of all my income holdings here.
- Best Stocks for 2011
- The 2011 Dividend Aristocrats
- 13 Dividend Stocks With A Good Yield/Growth Mix
- 11 Higher-Quality, High-Yield Dividend Stocks
- 6 Dividend Stocks That Will Make You Smile
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