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GuruFocus Names Five Dividend Growers

Monica Wolfe

Monica Wolfe

118 followers

During the past week, GuruFocus recognized five companies as dividend growers. In order to be qualified for this list, the company had to:

  • Have a dividend of greater than 3%.
  • Have a strong history of stable and increasing dividends.
  • Maintain Guru ownership.
  • Have a market cap of greater than $10 billion.

The following five companies come from various industries and sectors of the market, but they all fit the necessary criteria needed to qualify them as dividend growers.

A comparison of the companies’ historical dividend growth:

1393873524771.png

Altria Group (MO)

On Feb. 26, Altria Group declared a dividend of $0.48 per share, representing 5.10% dividend yield for the company. This dividend is payable on April 10 to shareholders of the record at the close of business on March 14, 2014.

The company’s historical dividend growth is as follows:

- 10-year: -8.70%

- 5-year: 2.10%

- 3-year: 8.80%

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Altria Group is a holding company whose wholly-owned subsidiaries include Philip Morris USA and John Middleton Co. The company’s reportable segments include smokeable products, smokeless products, wine and financial services.

Altria’s historical revenue and net income:

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The analysis on Altria reports that the company is currently trading near a 10-year high, the dividend yield is near a 10-year low and its operating margin is expanding.

At the end of Jan., the company released their fourth quarter and full year financial report which highlighted:

- Q4 reported diluted EPS decreased % to $0.24.

- Adjusted Q4 EPS increased 3.6% to $0.57 per share.

- Full-year reported diluted EPS up 9.7% to $2.26.

- 2014 full-year reported diluted EPS expected to be in the range of $2.51 to $2.58.

The Peter Lynch Chart suggests that the company is currently overvalued:

1393873870552.png

Altria has a market cap of $72.52 billion. Its shares are currently trading at around $36.29 with a P/E ratio of 14.10, a P/S ratio of 4.10 and a P/B ratio of 18.20. The company had an annual average earnings growth of 9.7% over the past five years.

Ensco PLC (ESV)

On Feb. 26, Ensco declared a dividend of $0.750 per share, representing 4.30% dividend yield for the company. This dividend is payable on March 21 to shareholders of the record at the close of business on March 10, 2014.

The company’s historical dividend growth is as follows:

- 10-year: 39.30%

- 5-year: 123.80%

- 3-year: 146.60%

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Ensco PLC is a global offshore contract drilling company. It is a provider of offshore contract drilling services to the international oil and gas industry.

Ensco’s historical revenue and net income:

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Over the past quarter Ensco reported that they current CEO Dan Rabun would be retiring. The CEO will be retiring after eight years of service and will continue to serve as Chairman, President and CEO until the Board has completed the succession and a new CEO has been appointed. No CEO has been appointed as of yet.

The analysis on Ensco reports that the company’s P/S, P/B and P/E ratios are all trading near 3-year lows, its Piotroski F-Score is high and its dividend yield is near a 10-year high.

The Peter Lynch Chart suggests that the company’s price is currently undervalued:

1393874386524.png

Ensco has a market cap of $12.21 billion. Its shares are currently trading at around $52.27 with a P/E ratio of 9.50, a P/S ratio of 2.60 and a P/B ratio of 1.00. The dividend yield on Ensco stocks is at 4.30%. The company had an annual average earnings growth of 15.90% over the past ten years.

Merck & Co. (MRK)

On Feb. 25, Merck & Co. declared a dividend of $0.440 per share, representing 3.10% dividend yield for the company. This dividend is payable on April 7 to shareholders of the record at the close of business on March 17, 2014.

The company’s historical dividend growth is as follows:

- 10-year: 1.30%

- 5-year: 2.40%

- 3-year: 3.60%

1393874707898.png

Merck & Co is a global health care company that delivers health solutions through its prescription medicines, vaccines, biologic therapies, animal health and consumer care products, which it markets directly and through its joint ventures.

Merck & Co’s historical revenue and net income:

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The analysis on Merck & Co reports that the company’s revenue has been in decline over the past year, it has issued $10.1 billion of debt over the past three years and its dividend yield is sitting near a 5-year low.

The Peter Lynch Chart suggests that Merck & Co is currently overvalued:

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Merck & Co has a market cap of $165.26 billion. Its shares are currently trading at around $56.20 with a P/E ratio of 37.60, a P/S ratio of 3.80 and a P/B ratio of 2.80. Merck currently holds a dividend yield of 3.10%. The company had an annual average earnings growth of 1.80% over the past ten years.

Seadrill Ltd (SDRL)

On Feb. 25, Seadrill declared a dividend of $0.735 per share, representing 7.40% dividend yield for the company. This dividend is payable on March 20 to shareholders of the record at the close of business on March 7, 2014.

The company’s historical dividend growth is as follows:

- 10-year: 0.00%

- 5-year: 40.80%

- 3-year: 87.80%

1393875021772.png

Seadrill is an offshore drilling contractor. It provides drilling and well services to the offshore industry. It has a fleet of drilling units that is outfitted to operate in shallow water, mid-water and deepwater areas, in benign and harsh environments.

Seadrill’s historical revenue and net income:

1393877136586.png

The company recently announced a change of executive officers. The company’s Chief Accounting Officer and Senior VP Robert Hingley-Wilson is moving into a position at Fredriksen Group, and he is to be replaced by David Sneddon who most recently worked as the VP of Finance in Europe for Novelis Inc.

The analysis on Seadrill reports that the company’s price is near a 10-year high, its P/B ratio is near a 1-year low and over the past three years the company has issued $5 billion of debt.

The Peter Lynch Chart suggests that the company is currently undervalued:

1393877136586.png

Seadrill has a market cap of $17.24 billion. Its shares are currently trading at around $36.75 with a P/E ratio of 7.90, a P/S ratio of 3.50 and a P/B ratio of 2.30. The company had an annual average earnings growth of 20.3% over the past five years.

CenturyLink (CTL)

On Feb. 24, CenturyLink declared a dividend of $0.54 per share, representing 7.00% dividend yield for the company. This dividend is payable on March 21 to shareholders of the record at the close of business on March 10, 2014.

The company’s historical dividend growth is as follows:

- 10-year: 46.00%

- 5-year: 14.00%

- 3-year: 1.20%

1393877780402.png

CenturyLink is the third largest telecommunications company in the U.S. and is recognized as a leader in the network services market by technology industry analyst firms. The company is a global leader in cloud infrastructure and hosted IT solutions for enterprise customers.

CenturyLink’s historical revenue and net income:

The analysis on CenturyLink reports that the company’s revenue has slowed down over the past year, its P/B and P/S ratios are near historical lows and its gross and operating margins have been in long-time declines.

The top guru shareholders of CTL:

- NWQ Managers (Trades, Portfolio) with 7,215,764 shares, representing 1.2% of the company’s shares outstanding and 2% of the fund’s total assets managed.

- Brian Rogers (Trades, Portfolio) with 4,136,179 shares, representing 0.69% of the company’s shares outstanding and 0.48% of the guru’s total portfolio.

The company’s fourth quarter results highlighted:

- Operating revenues of $4.54 billion, including core revenues of $4.11 billion.

- Achieved adjusted net income of $396 million and Adjusted diluted EPS of $0.68.

- Repurchased 50.8 million shares through Feb. 11, 2014 for approximately $1.72 billion since Feb. 2013 and representing 8.2% of outstanding shares as of Dec. 31, 2012.

- Added nearly 49,000 broadband and 26,000 CenturyLink Prism TV customers during the quarter.

CenturyLink has a market cap of $17.96 billion. Its shares are currently trading at around $31.08 with a P/S ratio of 1.00 and a P/B ratio of 1.10. The company had an annual average earnings growth of 4.00% over the past ten years.

To view a complete list of high yielding dividend stocks found among the gurus’ portfolios, click here.

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