My 3 Favorite Dividend Contenders with Low P/E Multiples and Low Beta Ratios

Author's Avatar
Mar 21, 2013
Safety and growth are a good combination but hard to find. Safe stocks don’t exist because with your shares you are a part of the business and must carry all fluctuations. But there are more or less risky businesses.

Growth is your wealth driver. A growing business is a good business and makes you richer when your company employs more people and generates higher sales and incomes over a couple of years.

In order to realize a return you must care about the current price ratios. The price you pay for growth should be acceptable in order to make a good return. Normally you have to pay a higher P/E with bigger growth expectations.

Today I try to combine all three factors: growth, bargains and safeness. I will screen dividend growth stocks with 10 to 25 years of consecutive dividend growth by low P/E and beta ratios: The P/E should be under 15 and the beta ratio must below 0.5.

Twelve stocks fulfilled the mentioned criteria of which three have a buy or better rating. Insurer, banks and telecom stocks are main contributors to the screen. Somehow strange — how banks' fundamentals have changed over recent years. They show low debt figures and good dividends, but the banks in my screen are very low capitalized and have a greater risk.

Here are my favorite stocks:

PPL Corporation (PPL) has a market capitalization of $17.64 billion. The company employs 17,729 people, generates revenue of $12.286 billion and has a net income of $1.537 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $4.368 billion. The EBITDA margin is 35.55 percent (the operating margin is 25.09 percent and the net profit margin 12.51 percent).

Financial Analysis: The total debt represents 46.13 percent of the company’s assets and the total debt in relation to the equity amounts to 192.06 percent. Due to the financial situation, a return on equity of 14.25 percent was realized. Twelve trailing months earnings per share reached a value of $2.61. Last fiscal year, the company paid $1.44 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 11.59, the P/S ratio is 1.43 and the P/B ratio is finally 1.67. The dividend yield amounts to 4.87 percent and the beta ratio has a value of 0.38.

RenaissanceRe (RNR) has a market capitalization of $4.06 billion. The company employs 309 people, generates revenue of $1.405 billion and has a net income of $746.66 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $944.42 million. The EBITDA margin is 67.17 percent (the operating margin is 53.21 percent and the net profit margin 53.11 percent).

Financial Analysis: The total debt represents 4.44 percent of the company’s assets and the total debt in relation to the equity amounts to 10.04 percent. Due to the financial situation, a return on equity of 18.02 percent was realized. Twelve trailing months earnings per share reached a value of $10.99. Last fiscal year, the company paid $1.08 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 8.35, the P/S ratio is 2.88 and the P/B ratio is finally 1.34. The dividend yield amounts to 1.22 percent and the beta ratio has a value of 0.45.

W.R. Berkley (WRB) has a market capitalization of $5.90 billion. The company employs 7,412 people, generates revenue of $5.823 billion and has a net income of $510.64 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $2.303 billion. The EBITDA margin is 39.55 percent (the operating margin is 12.05 percent and the net profit margin 8.77 percent).

Financial Analysis: The total debt represents 10.49 percent of the company’s assets and the total debt in relation to the equity amounts to 49.11 percent. Due to the financial situation, a return on equity of 12.36 percent was realized. Twelve trailing months earnings per share reached a value of $3.58. Last fiscal year, the company paid $0.35 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 12.10, the P/S ratio is 1.01 and the P/B ratio is finally 1.36. The dividend yield amounts to 0.83 percent and the beta ratio has a value of 0.43.

Take a closer look at the full list of cheap and safe dividend growth stocks. The average P/E ratio amounts to 12.07 and forward P/E ratio is 12.52. The dividend yield has a value of 3.35 percent. Price to book ratio is 1.26 and price to sales ratio 2.10. The operating margin amounts to 26.67 percent and the beta ratio is 0.28. Stocks from the list have an average debt to equity ratio of 0.45.

Related stock ticker symbols:

PPL, NTT, DCM, NWFL, LG, AROW, AUBN, LARK, SXL, HIFS, RNR, WRB

Selected Articles:

· 20 Dividend Contenders With High Growth And Cheap Price Ratios

· 20 Contenders With Highest Buy Rating

· High-Yield Income Investing With Dividend Contenders

· 13 High Quality Dividend Income Stocks

If you would like to receive more news and regular dividend updates, you should subscribe to my free E-Mail list. Alternatively, you can follow me onFacebookor Twitter.

Dividend Contenders with low P/E and beta ratios originally published at long-term-investments.blogspot.com.