GuruFocus Premium Membership

Serving Intelligent Investors since 2004. Only 96 cents a day.

Free Trial

Free 7-day Trial
All Articles and Columns »

3 Dividend Champions with Cheap Growth Price Ratios

October 05, 2011 | About:
Dividend Champions are stocks with consecutive dividend increases of more than 25 years. They are the kings under dividend stocks. They represent reliability and growth for the long-run. A full 101 stocks have such a long history of rising dividends, but how many of them are really cheap in relation to the expected growth?

I screened stocks from the category Dividend Champions by cheap price ratios in relation to growth. My two criteria are the price-earnings to growth (PEG) ratio and the forward price to earnings ratio. The PEG ratio should be under one and the second ratio under 10. Those are really strong restrictions that were met by only 13 Dividend Champions of which six yield above 3%, and 62% of the results come from the industrial and financial sector. Here are my favorite stocks:

1. Illinois Tool Works (ITW) is acting within the diversified machinery industry. The company has a market capitalization of $19.7 billion, generates revenues in an amount of $17.1 billion and a net income of $1.9 billion. It follows P/E ratio is 10.6 and forward price to earnings ratio 9.4, Price/Sales 1.2 and Price/Book ratio 1.9. Dividend Yield: 3.6 percent. Dividends were raised for 48 consecutive years. The PEG ratio amounts to 0.82.

2. Walgreen (WAG) is acting within the drug stores industry. The company has a market capitalization of $29.4 billion, generates revenues in an amount of $72.2 billion and a net income of $2.7 billion. It follows P/E ratio is 11.0 and forward price to earnings ratio 9.8, Price/Sales 0.4 and Price/Book ratio 2.0. Dividend Yield: 2.8 percent. Dividends were raised for 36 consecutive years. The PEG ratio amounts to 0.94.

3. Franklin Resources (BEN) is acting within the asset management industry. The company has a market capitalization of $19.9 billion, generates revenues in an amount of $6.8 billion and a net income of $1.9 billion. It follows P/E ratio is 10.8 and forward price to earnings ratio 9.6, Price/Sales 2.9 and Price/Book ratio 2.3. Dividend Yield: 1.1 percent. Dividends were raised for 30 consecutive years. The PEG ratio amounts to 0.98.

Take a closer look at the full table of 13 Cheap Dividend Champions By Growth. The average P/E ratio amounts to 10.8 while the average forward P/E ratio is 8.3. The dividend yield has an average value of 3.0 percent. Price to book ratio is 1.4 and price to sales ratio 1.1. The operating margin amounts to 15.2 percent.

About the author:

Dividend
I am a private full time investor searching for investments and investment ideas.

Visit Dividend 's Website


Rating: 2.4/5 (8 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Email Hide