Cheap Dividend Challengers with Strongest EPS Growth

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Sep 15, 2011
Dividend Challengers are stocks that have raised dividends over a period of at least five years but not more than nine years. As of today, 204 U.S.-listed stocks have achieved this goal.


I screened 204 Dividend Challengers by cheap pricing ratios. First, the dividend yield should be positive. In addition, the challengers should have a P/B ratio of less than one as well as a forward P/E ratio of less than 15. There are 14 cheap Dividend Challengers that met these criteria of which 7 have a dividend yield of more than 3%. Finally, the stock should have an expected earnings per share growth for the upcoming five years in a double digit range.


Here are the three best results by expected 5-Year EPS growth:


1. Tower Group (TWGP) is acting within the property and casualty insurance industry. The company hasa market capitalization of $947.1 million, generates revenues in an amount of $1.7 billion and a net income of $122.0 million. It follows P/E ratio is 7.9 and forward price to earnings ratio 7.4, Price/Sales 0.6 and Price/Book ratio 0.9. Dividend Yield: 3.3 percent. The expected EPS growth for next year amounts to 17.8 and 20.8 percent for the upcoming 5 years. The company increased dividends for 5 consecutive years.


2. Axis Capital Holdings (AXS) is acting within the property and casualty insurance industry. The company hasa market capitalization of $3.5 billion, generates revenues in an amount of $3.8 billion and a net income of $220.5 million. It follows P/E ratio is 23.4 and forward price to earnings ratio 6.4, Price/Sales 0.9 and Price/Book ratio 0.7. Dividend Yield: 3.4 percent. The expected EPS growth for next year amounts to 710.6 and 17.8 percent for the upcoming 5 years. The company increased dividends for 9 consecutive years.


3. International Speedway (ISCA) is acting within the sporting activities industry. The company hasa market capitalization of $1.2 billion, generates revenues in an amount of $638.6 million and a net income of $52.1 million. It follows P/E ratio is 22.2 and forward price to earnings ratio 12.5, Price/Sales 1.8 and Price/Book ratio 1.0. Dividend Yield: 0.8 percent. The expected EPS growth for next year amounts to 14.2 and 12.8 percent for the upcoming 5 years. The company increased dividends for 6 consecutive years.


Take a closer look at the full table of 14 cheap dividend challengers. The average price to earnings ratio (P/E ratio) amounts to 11.6 while the average forward P/E ratio is 8.0 and price to free cash flow 9.5. The dividend yield has an average value of 3.2 percent. Price to book ratio is 0.8 and price to sales ratio 1.3. The operating margin amounts to 16.7 percent.


Related Stock Ticker Symbols:

PNNT, ALNC, BHB, AXS, TRV, TWGP, THG, LLL, NTT, AMP, AIZ, AFG, VSEC, ISCA,


Selected Articles: · Best Yielding Dividend Challengers List August 2011


· Top Dividend Champions List September 2011


· 12 Dividend Champions With Double Digit EPS Growth


· Best Yielding Dividend Achievers List August 2011


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