4 Dogs of the Dividend Aristocrats Index

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Jul 18, 2013
Dividend Aristocrats are some of the best dividend income growth stock you can buy at the market. Those stocks have raised their cash distributions to shareholders over a period of more than 25 years without a break. For sure, it's no guarantee to receive a higher dividend next year but the possibility of a dividend hike is very high.

I wrote recently that high-quality stocks are also highly priced and the Dividend Aristocrats are definitely highly priced. It’s very hard to find real bargains and to receive a good long-term total return.

Today I would like to give you an update of the most recommend stocks from the Dividend Aristocrats Index with some fundamentals. Twenty-nine of 54 companies from the index have a current buy or better rating and nearly half of the results still have a low forward P/E of less than 15. That’s very interesting because all of the 20 most recommended Dividend Aristocrats have positive earnings per share predictions for the mid-term – on average 10.14 percent.

Below is a list of the 20 highest recommended Aristocrats with a detailed look on the three cheapest results.

Here are the cheapest Dividend Aristocrats with buy or better rating:



AFLAC (AFL)
has a market capitalization of $27.53 billion. The company employs 8,673 people, generates revenue of $25.364 billion and has a net income of $2.866 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $5.747 billion. The EBITDA margin is 22.66 percent (the operating margin is 16.96 percent and the net profit margin 11.30 percent).

Financial Analysis: The total debt represents 3.32 percent of the company’s assets and the total debt in relation to the equity amounts to 27.24 percent. Due to the financial situation, a return on equity of 19.82 percent was realized. Twelve trailing months earnings per share reached a value of $6.33. Last fiscal year, the company paid $1.34 in the form of dividends to shareholders. Forward P/E: 9.05.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 9.33, the P/S ratio is 1.09 and the P/B ratio is finally 1.73. The dividend yield amounts to 2.37 percent and the beta ratio has a value of 1.89.

Chevron (CVX) has a market capitalization of $241.11 billion. The company employs 62,000 people, generates revenue of $241.909 billion and has a net income of $26.336 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $59.975 billion. The EBITDA margin is 24.79 percent (the operating margin is 19.15 percent and the net profit margin 10.89 percent).

Financial Analysis: The total debt represents 5.23 percent of the company’s assets and the total debt in relation to the equity amounts to 8.93 percent. Due to the financial situation, a return on equity of 20.30 percent was realized. Twelve trailing months earnings per share reached a value of $13.23. Last fiscal year, the company paid $3.51 in the form of dividends to shareholders. Forward P/E: 10.04.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 9.40, the P/S ratio is 1.00 and the P/B ratio is finally 1.77. The dividend yield amounts to 3.22 percent and the beta ratio has a value of 0.80.

Nucor (NUE) has a market capitalization of $14.39 billion. The company employs 22,200 people, generates revenue of $19.429 billion and has a net income of $593.13 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1.665 billion. The EBITDA margin is 8.57 percent (the operating margin is 4.39 percent and the net profit margin 3.05 percent).

Financial Analysis: The total debt represents 26.24 percent of the company’s assets and the total debt in relation to the equity amounts to 48.60 percent. Due to the financial situation, a return on equity of 6.65 percent was realized. Twelve trailing months earnings per share reached a value of $1.39. Last fiscal year, the company paid $1.46 in the form of dividends to shareholders. Forward P/E: 12.62.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 32.59, the P/S ratio is 0.74 and the P/B ratio is finally 1.88. The dividend yield amounts to 3.25 percent and the beta ratio has a value of 1.11.

Take a closer look at the full list of the most recommended Dividend Aristocrats and which of them are still cheap. The average P/E ratio amounts to 19.07 and forward P/E ratio is 15.02. The dividend yield has a value of 2.28 percent. Price to book ratio is 5.24 and price to sales ratio 2.37. The operating margin amounts to 19.02 percent and the beta ratio is 0.96. Stocks from the list have an average debt to equity ratio of 0.84.

Related stock ticker symbols:

CAH, ECL, PNR, PPG, VFC, MHFI, NUE, KO, CVX, DOV, PG, PEP, TGT, TROW, WMT, ABBV, AFL, BEN, MCD, MDT

Selected Articles:

· 19 Cheap Dividend Aristocrats

· 20 Of The Safest Dividend Aristocrats

· 20 Most Profitable Dividend Aristocrats

· 7 Dividend Aristocrats With The Highest Payout Potential

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