Gurus Are Buying High-Yield Stocks Like WestRock, Target

Investment ideas with increasing dividend yields

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Feb 09, 2016
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The following are companies with high and growing dividend yields that gurus are buying according to GuruFocus' All-in-One Screener.

WestRock Co. (WRK) has a trailing dividend yield of 3.77% with a three-year growth rate of 38.90% and a five-year growth rate of 26%. The stock is now trading with a trailing 12-month P/E multiple of 10.50 and an estimated forward P/E multiple of 8.86. During the last 12 months, the stock price has dropped by 48%.

GuruFocus gives the company a profitability and growth rating of 7/10, but it reports negative returns such as ROA of -0.43% and ROE of -0.99% that are ranked lower than 89% of other companies in the Global Packaging & Containers industry. Operating margin of 2.35% and net-margin of -0.57% are underperforming 79% of its competitors. Financial strength has a rating of 5/10, the cash to debt ratio is 0.04 and the equity to asset ratio is 0.44.

The company provides paper and packaging solutions in consumer and corrugated markets. It offers corrugated container, paperboard, partitions & protective packaging, containerboard and beverage multipacks.

The company is held by seven gurus:Â Larry Robbins (Trades, Portfolio) is the main shareholder among the gurus with a stake of 1.71% of outstanding shares, followed by Steven Cohen (Trades, Portfolio) with 0.36%, T Rowe Price Equity Income Fund (Trades, Portfolio) with 0.29%, Howard Marks (Trades, Portfolio) with 0.11%, RS Investment Management (Trades, Portfolio) with 0.1%, Jim Simons (Trades, Portfolio) with 0.05% and Ray Dalio (Trades, Portfolio) with 0.02%.

Valero Energy Corp. (VLO) has a trailing dividend yield of 3.33% with a three-year growth rate of 51.80% and a five-year growth rate of 25.40%. The stock is now trading with a trailing 12-month P/E multiple of 5.60 and an estimated forward P/E multiple of 7.28. During the last 12 months the stock price has risen by 5%.

GuruFocus gives the company a profitability and growth rating of 7/10 since it reports strong returns such as ROA of 10.27% and ROE of 20.69% that are ranked higher than 77% of other companies in the Global Oil & Gas Refining & Marketing industry. Operating margin of 7.24% and net-margin of 4.54% are outperforming 74% of its competitors. Financial strength has a rating of 6/10, the cash to debt ratio is 0.56 and the equity to asset ratio is 0.47.

Its refineries produce conventional gasolines, distillates, jet fuel, asphalt, petrochemicals, lubricants, and other refined products.

The largest shareholder among the gurus is Jeremy Grantham (Trades, Portfolio) with a stake of 0.32% of outstanding shares, followed by Pioneer Investments (Trades, Portfolio) with 0.24%, Jim Simons (Trades, Portfolio) with 0.14%, Steven Cohen (Trades, Portfolio) with 0.1% and Caxton Associates (Trades, Portfolio) with 0.1%.

Donaldson Co. Inc. (DCI) has a trailing dividend yield of 2.27% with a three-year growth rate of 27.60% and a five-year growth rate of 24.80%. The stock is now trading with a trailing 12-month P/E multiple of 21.50 and an estimated forward P/E multiple of 17.45. During the last 12 months, the stock price has dropped by 22%.

GuruFocus gives the company a profitability and growth rating of 7/10 since it reports strong returns ROA of 10.39 and ROE of 23.38% that are ranked higher than 89% of other companies in the Global Diversified Industrials industry. Operating margin of 11.54% and net-margin of 8.24% are outperforming 73% of its competitors. Financial strength has a rating of 8/10, the cash to debt ratio is 0.33 and the equity to asset ratio is 0.41.

It is a manufacturer of filtration systems and replacement parts. The company's product mix includes air and liquid filtration systems and exhaust and emission control products.

The company is held by five gurus:Â Columbia Wanger (Trades, Portfolio) is the main shareholder among the gurus with a stake of 8.68% of outstanding shares, followed by Mairs and Power (Trades, Portfolio) with 4%, Mario Gabelli (Trades, Portfolio) with 1.19%, Chuck Royce (Trades, Portfolio) with 0.22%, Jim Simons (Trades, Portfolio) with 0.07% and Jeremy Grantham (Trades, Portfolio) with 0.07%.

Texas Instruments Inc. (TXN) has a trailing dividend yield of 2.89% with a three-year growth rate of 30.30% and a five-year growth rate of 24.50%. The stock is now trading with a trailing 12-month P/E multiple of 17.90 and an estimated forward P/E multiple of 15.15. During the last 12 months, the stock price has dropped by 8%.

GuruFocus gives the company a profitability and growth rating of 8/10 since it reports strong returns such as ROA of 17.49% and ROE of 29.24% that are ranked higher than 94% of other companies in the Global Semiconductors industry. Operating margin of 32.88% and net-margin of 22.97% are over performing 93% of its competitors. Financial strength has a rating of 8/10, the cash to debt ratio is 0.78 and the equity to asset ratio is 0.61.

The company has two segments: Analog and Embedded Processing. Analog semiconductors change real-world signals - such as sound, temperature, pressure or images - by conditioning them, amplifying them and often converting them to a stream of digital data that can be processed by other semiconductors, such as embedded processors.

The company is held by seven gurus:Â PRIMECAP Management (Trades, Portfolio) is the main shareholder among the gurus with a stake of 5.39% of outstanding shares, followed by Chris Davis (Trades, Portfolio) with 0.99%, James Barrow (Trades, Portfolio) with 0.65%, Bill Nygren (Trades, Portfolio) with 0.63%, T Rowe Price Equity Income Fund (Trades, Portfolio) with 0.41%, First Eagle Investment (Trades, Portfolio) with 0.35% and HOTCHKIS & WILEY with 0.13%.

Target Corp. (TGT) has a trailing dividend yield of 3.11% with a three-year growth rate of 20.00% and a five-year growth rate of 23.40%. The stock is now trading with an estimated forward P/E multiple of 15.60. During the last 12 months the stock price has dropped by 8%.

GuruFocus gives the company a profitability and growth rating of 7/10, but it reports negative returns such as ROA of -1.67% and ROE of -4.90% that are ranked lower than 87% of other companies in the Global Discount Stores industry. Financial strength has a rating of 6/10, the cash to debt ratio is 0.16 and the equity to asset ratio is 0.32.

The company is engaged in operating general merchandise discount stores in the U.S. The company sells general merchandise and food. Its general merchandise and CityTarget stores offer an edited food assortment, including perishables, dry grocery, dairy and frozen items, while its SuperTarget stores offers a full line of food items comparable to traditional supermarkets.

The company is held by seven gurus:Â James Barrow (Trades, Portfolio) is the largest shareholder among the gurus with a stake of 2.25% of outstanding shares, followed by Dodge & Cox with 2%, HOTCHKIS & WILEY with 0.49%, Mairs and Power (Trades, Portfolio) with 0.41%, NWQ Managers (Trades, Portfolio) with 0.17%, Joel Greenblatt (Trades, Portfolio) with 0.13% and Richard Snow (Trades, Portfolio) with 0.12%.

Teva Pharmaceutical Industries Ltd. (TEVA) has a trailing dividend yield of 2.31% with a three-year growth rate of 15.30% and a five-year growth rate of 23.20%. The stock is now trading with a trailing 12-month P/E multiple of 28.50 and an estimated forward P/E multiple of 10.13. During the last 12 months, the stock price has risen by 4%.

GuruFocus gives the company a profitability and growth rating of 6/10, but it reports easy returns such as ROA of 3.71% and ROE of 7.69% that are ranked higher than 50% of other companies in the Global Drug Manufacturers - Specialty & Generic industry. Operating margin of 21.93% and net-margin of 8.90% are over performing 60% of its competitors. Financial strength has a rating of 6/10, the cash to debt ratio is 0.08 and the equity to asset ratio is 0.47.

The company manufactures generic pharmaceutical products. It operates in business in two segments such as generic products, which includes chemical and therapeutic equivalents of originator pharmaceuticals in a variety of dosage forms.

The company is held by eight gurus:Â John Paulson (Trades, Portfolio) is the main shareholder among the gurus with a stake of 2.11% of outstanding shares, followed by James Barrow (Trades, Portfolio) with 1.13%, Andreas Halvorsen (Trades, Portfolio) with 1.05%, Vanguard Health Care Fund (Trades, Portfolio) with 0.68%, First Eagle Investment (Trades, Portfolio) with 0.52%, Larry Robbins (Trades, Portfolio) with 0.49%, Jim Simons (Trades, Portfolio) with 0.34% and NWQ Managers (Trades, Portfolio) with 0.28%.

Dow Chemical Co. (DOW) has a trailing dividend yield of 3.68% with a three-year growth rate of 19.30% and a five-year growth rate of 23%. The stock is now trading with a trailing 12-month P/E multiple of 12.10 and an estimated forward P/E multiple of 11.24. During the last 12 months, the stock price has dropped by 3%.

GuruFocus gives the company a profitability and growth rating of 7/10, but it reports easy returns such as ROA of 3.71% and ROE of 7.69% that are ranked higher than 86% of other companies in the Global Chemicals industry. Operating margin of 11.36% and net-margin of 15.76% are over performing 76% of its competitors. Financial strength has a rating of 7/10, the cash to debt ratio is 0.50 and the equity to asset ratio is 0.37.

The company is as an integrated science and technology company. It operates in five segments: Agricultural Sciences, Consumer Solutions, Infrastructure Solutions, Performance Materials & Chemicals and Performance Plastics.

The company is held by 11 gurus:Â Daniel Loeb (Trades, Portfolio) is the main shareholder among the gurus with a stake of 2.03% of outstanding shares, followed by Larry Robbins (Trades, Portfolio) with 0.63%, George Soros (Trades, Portfolio) with 0.34%, Leon Cooperman (Trades, Portfolio) with 0.24%, PRIMECAP Management (Trades, Portfolio) with 0.13%, Jim Simons (Trades, Portfolio) with 0.08%, Pioneer Investments (Trades, Portfolio) with 0.08% and Steven Cohen (Trades, Portfolio) with 0.08%.