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Alberto Abaterusso
Alberto Abaterusso
Articles (1506) 

These Large Caps Grant a High Forward Dividend Yield

Ford Motor Co. tops the list

February 28, 2019 | About:

The dividend yield of the following automobile and engine manufacturers is thrashing that of the S&P 500 index, which stood at 1.92% on Wednesday.

The forward dividend yields of these three stocks are accurate as of Wednesday, Feb. 27.

The superior forward dividend yield that the following companies are granting suggests that these securities are cheaper than the average stock. This, of course, enhances the odds of adding shares of value stocks in the portfolio.

Ford Motor Co. (NYSE:F) closed at $8.8 on Wednesday. The share price declined 15% over the past 52 weeks, pushing the forward dividend yield nearly 4 percentage points above the industry median to 6.76%. The stock has underperformed the S&P 500 index by about 20.1% over the same interval.

The share price is below the 200-day simple moving average line, on par with the 100-day SMA line and above the 50-day SMA line. The 52-week range is $7.41 to $12.15.

The stock has a market capitalization of roughly $34.93 billion, a price-book ratio of 0.97 versus an industry median of 1.26 and a price-sales ratio of 0.22 versus an industry median of 0.63. The price-earnings ratio is 9.54 versus an industry median of 13.25.

GuruFocus assigned the company a financial strength rating of 4 out of 10 and a profitability and growth rating of 6 out of 10.

Wall Street recommends to hold the stock with an average target price of $9.57 per share.

General Motors Co. (NYSE:GM) closed at $40 per share on Wednesday, after a 6% increase in the share price for the 52 weeks through Feb. 27. Over the same period, the stock has underperformed the S&P 500 index by about 1.2%. The market capitalization is $56.38 billion. The forward dividend yield is 3.79% compared to an industry median of 2.79%.

The share price is above the 200-, 100- and 50-day simple moving average lines. The closing share price on Wednesday was 30.9% higher than the 52-week low of $30.56 and 12.5% lower than the 52-week high of $45.00.

The stock has a price-earnings ratio of 7.23 versus an industry median of 13.25, a price-book ratio of 1.44 compared to an industry median of 1.26 and a price-sales ratio of 0.39 versus an industry median of 0.63.

GuruFocus assigned the company a financial strength rating of 5 out of 10 and a profitability and growth rating of 7 out of 10.

Wall Street released an overweight recommendation rating with an average target price of $47.44 per share.

Cummins Inc. (NYSE:CMI)’s share price closed at $155.4 on Wednesday. The market capitalization is about $24.44 billion. The forward dividend yield is 2.94% compared to an industry median of 2.2%. For the 52 weeks through Feb. 27, the share price has decreased by 3% underperforming the S&P 500 index by 10.5%.

The share price is now trading above the 200-, 100- and 50-day simple moving average lines.

The price-book ratio is 3.34 versus an industry median of 1.54, the price-earnings ratio is 11.79 versus an industry median of 17.65 and the price-sales ratio is 1.06 compared to an industry median of 1.07. The share price at close on Wednesday was 25% off the 52-week low of $124.4 and 10.7% from the 52-week high of $172.08.

GuruFocus assigned a financial strength rating of 7 out of 10 and a profitability and growth rating of 8 out of 10.

Analysts issued a hold recommendation rating on shares of Cummins Inc. with an average target price of $160 per share.

Based in Columbus, Indiana, Cummins Inc. is a designer, manufacturer and distributor of diesel and natural gas engines as well as powertrain-related component products internationally. 

Disclosure: I have no positions in any securities mentioned.

About the author:

Alberto Abaterusso
If somebody asks what being a value investor means, Alberto Abaterusso would answer, “The value investor is not just the possessor of the security that represents the company, but he is the owner of that company. As an owner of the company the value investor is actively involved in the dynamics of that company and his first concern is how to have sales progressively growing. Also, the value investor is probably one of the most demanding persons in the world concerning sales.”

Abaterusso is a freelance writer based in The Netherlands. He primarily writes about gold, silver and precious metals mining stocks. His articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. Alberto holds an MBA from Università degli Studi di Bari (Italy), Aldo Moro.

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