Investors may want to consider the following stocks for a number of reasons.
First, as of July 24, the stocks grant a high forward dividend yield that top both the industry median and the S&P 500 Index’s yield of 1.87%. The forward dividend yield of the two companies are also ranked very high in their industries. These two factors may indicate the market is offering a compelling entry point for the stocks.
Second, GuruFocus says the companies have a good dividend yield history. Buying stocks at higher yields ith regard to the historical value is generally considered being more profitable.
Next, the companies are long-term dividend payers. While past performance is not a guarantee for the future, the fact they have granted their shareholders with dividends for so many years suggests they will continue to do so.
They also have a solid balance sheet, suggesting the companies have more than enough financial means to fund the payment of dividends for at least another five years.
Finally, these stocks are trading at sizeable discount (margin of safety) to their earnings power, increasing the odds of finding an undervalued security.
Over the past 52 weeks through July 25, the stock lost 43% to trade substantially below the 200- and 100-day simple moving average lines. The share price is still slightly above the 50-day line. The closing price was 12% above the 52-week low of $5 and 79.6% below the 52-week high of $10.06. The 14-day relative strength index of 57 suggests the stock is neither overbought nor oversold.Â
Based on Thursday’s closing price, Richardson Electronics’ forward dividend yield is 4.34% versus the industry median 2.67%. The forward dividend yield of Richardson is ranked higher than 909 out of a total of 1,269 companies operating in the Computer Hardware industry.
The GuruFocus chart shows the stock’s dividend yield is close to three-year high.
Headquartered in LaFox, Illinois, the electronics distribution company has uninterruptedly paid dividends since Sept. 15, 1988. On Aug. 23, Richardson Electronics will – in line with the previous distribution – pay a quarterly dividend of 6 cents per common share to shareholders of record as of Aug. 7. The ex-dividend date is Aug. 6. The payment will be the third one this year.
The chart below shows the dividend history of Richardson Electronics.
GuruFocus assigned a very high rating of 9 out of 10 for the company's financial strength, resulting from no debt and total cash of $3.78 per share, which is enough to pay quarterly dividends for 15 years.
As of May, Richardson Electronics has an earnings power value of $7.72, yielding- based on Thursday's closing price - a 27.42% margin of safety.
Over the past year through July 25, the stock lost 20%, falling significantly below the 200-day simple moving average line. The share price is on par with the 100-day line and slightly above the 50-day line. The closing share price was 17.6% off the 52-week low of $9.27 and 28% from the 52-week high of $13.95. The 14-day relative strength index of 55 suggests the stock is not oversold despite the significant devaluation.
Based on the closing price on Thursday, Ecology and Environment has a forward dividend yield of 3.67% versus the industry median of 2.82%. It is ranked higher than 53 out of a total of 82 companies operating in the Waste Management industry.
The chart shows Ecology and Environment’s dividend yield is close to a two-year high.
Headquartered in New York, the waste management company paid semi-annual dividends between Sept. 4, 1987 and July 1, 1988; from Oct. 1, 1989 to Aug. 9, 2013 and from Feb. 15, 2014 to March 27, 2019.
On Aug. 12, Ecology and Environment will – in line with the previous distribution – pay a semi-annual dividend of 20 cents per common share to shareholders of record as of Aug. 5. The ex-dividend date is Aug. 2. The payment will be the second one this year.
The following chart shows the dividend history of Ecology and Environment.
GuruFocus assigned a high rating of 7 out of 10 for the company's financial strength, resulting from close to zero debt-equity ratio versus the industry median of 61% and total cash of $2.59 per share, which is sufficient enough to pay the semi-annual dividend for six years.
As of April, Ecology and Environment has an earnings power value of $20.80, resulting in a 47.50% margin of safetyÂ based on Thursday's closing price.
Disclosure: I have no positions in any securities mentioned.
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