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My Best Dividend Aristocrat Growth Picks for 2013

Buying high quality stocks at cheap prices is one of the major missions of a successful trader. Many investors failed to implement this strategy. I have also done a lot of loss-trades within the recent years and lost much money. If I accumulate all this money which now far away at investors who sold the stocks earlier, I would be a rich man. I learned from a lot. People should buy some higher valuated companies with a safer business model. I believe that if you realize a return of 5% to 9%, plus a final dividend of 1% to 3%, you have done a great investment.

However, I proceed with my 2013 stock picks. Today, Dividend Aristocrats are in my main focus. Those stocks raised dividends over a period of more than 25 consecutive years and are selected by the credit rating agency Standard & Poor’s.

These are my criteria:

- Forward P/E under 15

- Past five-year sales growth over 5 percent

- Earnings per share growth for the next five years over 5 percent

- Operating margin over 5 percent

Fourteen Dividend Aristocrats fulfilled these criteria of which three are yielding above 3%. Nine are currently recommended to buy. Dividend Aristocrats are not as cheap as other potential dividend growth stocks because the market has identified the quality of the stocks. Would you pay a higher price for more quality or do you prefer cheaper stocks with more return potential? Let me know your thoughts below in our comment box.

Here are the three most recommended Aristocrats:

V.F. Corporation (VFC) has a market capitalization of $16.73 billion. The company employs 58,000 people, generates revenue of $9.46 billion and has a net income of $890.39 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1.41 billion. The EBITDA margin is 14.95 percent (the operating margin is 13.16 percent and the net profit margin 9.41 percent).

Financial Analysis: The total debt represents 22.72 percent of the company’s assets and the total debt in relation to the equity amounts to 46.76 percent. Due to the financial situation, a return on equity of 21.18 percent was realized. Twelve trailing months earnings per share reached a value of $9.01. Last fiscal year, the company paid $2.61 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 16.85, the P/S ratio is 1.77 and the P/B ratio is finally 3.71. The dividend yield amounts to 2.29 percent and the beta ratio has a value of 0.89.

Medtronic (MDT) has a market capitalization of $43.29 billion. The company employs 45,000 people, generates revenue of $16.184 billion and has a net income of $3.42 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $5.13 billion. The EBITDA margin is 31.68 percent (the operating margin is 25.61 percent and the net profit margin 21.1 percent).

Financial Analysis: The total debt represents 32.14 percent of the company’s assets and the total debt in relation to the equity amounts to 62.13 percent. Due to the financial situation, a return on equity of 20.65 percent was realized. Twelve trailing months earnings per share reached a value of $3.11. Last fiscal year, the company paid $0.97 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 13.78, the P/S ratio is 2.67 and the P/B ratio is finally 2.59. The dividend yield amounts to 2.43 percent and the beta ratio has a value of 0.88.

Illinois Tool Works (ITW) has a market capitalization of $28.64 billion. The company employs 65,000 people, generates revenue of $17.786 billion and has a net income of $2.02 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $3.32 billion. The EBITDA margin is 18.67 percent (the operating margin is 15.35 percent and the net profit margin 11.34 percent).

Financial Analysis: The total debt represents 22.19 percent of the company’s assets and the total debt in relation to the equity amounts to 39.83 percent. Due to the financial situation, a return on equity of 20.60 percent was realized. Twelve trailing months earnings per share reached a value of $4.10. Last fiscal year, the company paid $1.40 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 15.08, the P/S ratio is 1.61 and the P/B ratio is finally 2.98. The dividend yield amounts to 2.46 percent and the beta ratio has a value of 1.16.

Take a closer look at the full list of my best Dividend Aristocrats stock picks 2013. The average P/E ratio amounts to 17.86 and forward P/E ratio is 12.88. The dividend yield has a value of 2.52 percent. Price to book ratio is 3.02 and price to sales ratio 1.49. The operating margin amounts to 13.87 percent and the beta ratio is 0.75. The average stock from the screening results has a debt to equity ratio of 0.51.

Related stock ticker symbols:

T, ABT, BMS, SWK, AFL, XOM, MMM, ITW, MDT, VFC, WMT, HRL, FDO, BCR

Selected Articles:

· The Best Yielding Dividend Aristocrats

· 8 Dividend Aristocrats At New 52-Week Highs

· The Safest Dividend Aristocrats

· The 20 Best Performing Dividend Aristocrats

Best Dividend Aristocrats stock picks for 2013 were originally published at "long-term-investments.blogspot.com."

About the author:

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

Visit Dividend's Website


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