20 of the Safest Dividend Challengers on the Market

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Jun 28, 2013
I love high-quality dividend growth stocks, and the stocks with the longest history of consecutive payments are definitely Dividend Kings and Dividend Champions. But the big disadvantage of them is that they are also highly priced.

You cannot make a greater return with stocks that have a P/E ratio of 22 and grow only at 5 percent. You need real bargains to make big profits with your assets.

This problem can be solved when you look into the dividend potentials. Those stocks haven’t yet reached a longer dividend payment history but they can become a great Dividend Champion within the next years. The price ratios are also lower for some companies and you have a better choice to find good investments because out there are around 160 stocks with five or more years of consecutive dividend payments and 207 with a payment between 10 to 25 years.

Today I like to screen the third class of dividend growth stocks by the safest alternatives. The 20 safest dividend growth stocks have a beta ratio between 0.18 and 0.55. All three top picks come from the oil and gas pipeline industry, a branch with very stable sales and future growth perspectives due to the shale gas boom in the U.S.

From the 20 safest Dividend Challengers have nine a current buy or better rating.

Here are the cheapest results in terms of forward P/E:



Randgold Resources (GOLD) has a market capitalization of $5.72 billion. The company employs 2,048 people, generates revenue of $1.317 billion and has a net income of $510.78 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $697.88 million. The EBITDA margin is 52.96 percent (the operating margin is 43.06 percent and the net profit margin 38.76 percent).

Financial Analysis: The total debt represents 0.58 percent of the company’s assets and the total debt in relation to the equity amounts to 0.69 percent. Due to the financial situation, a return on equity of 17.95 percent was realized. Twelve trailing months earnings per share reached a value of $4.65. Last fiscal year, the company paid $0.50 in the form of dividends to shareholders. Forward P/E: 9.71.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 13.34, the P/S ratio is 4.32 and the P/B ratio is finally 2.18. The dividend yield amounts to 0.81 percent and the beta ratio has a value of 0.55.

China Mobile (CHL) has a market capitalization of $203.25 billion. The company employs 182,487 people, generates revenue of $91.141 billion and has a net income of $21.041 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $41.350 billion. The EBITDA margin is 45.37 percent (the operating margin is 26.86 percent and the net profit margin 23.09 percent).

Financial Analysis: The total debt represents 0.48 percent of the company’s assets and the total debt in relation to the equity amounts to 0.70 percent. Due to the financial situation, a return on equity of 18.84 percent was realized. Twelve trailing months earnings per share reached a value of $5.17. Last fiscal year, the company paid $2.77 in the form of dividends to shareholders. Forward P/E: 10.20.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 9.78, the P/S ratio is 2.21 and the P/B ratio is finally 1.73. The dividend yield amounts to 4.35 percent and the beta ratio has a value of 0.35.

The Hanover Insurance Group (THG) has a market capitalization of $2.14 billion. The company employs 5,100 people, generates revenue of $4.590 billion and has a net income of $46.10 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1.069 billion. The EBITDA margin is 23.29 percent (the operating margin is 0.63 percent and the net profit margin 1.00 percent).

Financial Analysis: The total debt represents 6.30 percent of the company’s assets and the total debt in relation to the equity amounts to 32.73 percent. Due to the financial situation, a return on equity of 1.82 percent was realized. Twelve trailing months earnings per share reached a value of $1.34. Last fiscal year, the company paid $1.23 in the form of dividends to shareholders. Forward P/E: 10.84.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 36.13, the P/S ratio is 0.47 and the P/B ratio is finally 0.83. The dividend yield amounts to 2.72 percent and the beta ratio has a value of 0.55.

Take a closer look at the full list of the safest dividend growth stocks with five to 10 years of consecutive dividend growth. The average P/E ratio amounts to 26.33 and forward P/E ratio is 16.64. The dividend yield has a value of 4.07 percent. Price to book ratio is 2.98 and price to sales ratio 3.77. The operating margin amounts to 27.08 percent and the beta ratio is 0.40. Stocks from the list have an average debt to equity ratio of 1.26.

Related stock ticker symbols:

BWP, APU, TGP, OKS, EPB, LO, DUK, SEP, WR, CHL, VZ, CMS, WES, NVE, BAX, AWK, K, THG, KR, GOLD

Selected Articles:

· 20 Big Dividend Challengers With Highest Margins

· 20 Dividend Challengers With Fastest Growing Dividends

· Best Yielding Dividend Challengers | 30 High-Yield Dividend Growth Stocks

· 20 Highly Recommended Dividend Challengers To Buy

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Dividend Challengers with lowest beta ratios originally published at long-term-investments.blogspot.com.