MADISON HEIGHTS, Mich., Jan. 6, 2012 /PRNewswire/ — The Editorial Advisory and Securities Review Committee of BetterInvesting Magazine today announced Seagate Technology plc (NDQ: STX) as its March 2012 “Stock to Study” and Tyco International Ltd. (NYSE: TYC) as its March…
PR Newswire: Financial Services
Many dividend investors consider the Dividend Aristocrats to be the best stocks to buy for dependable dividends. It’s a pretty logical assumption since these dividend stocks have increased their dividends every year for the past 25 years. However, even with the ongoing scramble for low risk yield, some of these stocks are currently out of favor in the market, for various reasons, and look undervalued:
Valuations: Archer Daniels and Walgreen both have low PEGs for next year and the next 5 years. In addition, they have very low Price/Sales and Price/Book ratios. WAG has been beaten up this year due to its ongoing negotiation with Express Scripts (ESRX), over remuneration rates for prescription drugs. If WAG drops the Express Scripts deal, they estimate it’ll shave $.21/share from their 2012 earnings, which will put their projected 2012 earnings roughly flat with 2011.
Dividends:
Options: Although the following firms aren’t high dividend
Double Dividend Stocks submits:
We’re half way through 2011, with the Dow up 7.23%, and the S&P (SPY) up 5.01% so far. Not bad, especially when you compare it to the first half of 2010, in which the Dow fell -6.3%, and the S&P was down -7.9%. Of course, the second half of 2011 most likely won’t have the benefit of a massive QE2 $ injection, like 2010 had. So, what do you do to lock in some gains on some undervalued dividend paying stocks?
Selling covered calls is one proven way to more than double your dividends, and also lower your downside risk. This week, we found 5 Dow dividend stocks with low Price/Earnings Growth ratios, (PEG), and double-digit covered call option yields.
Although they don’t qualify for our High Dividend Stocks By Sectors Table, a majority of these firms’ dividend yields are above the current 2.39% S&P average, and they all have
Double Dividend Stocks submits:
With what looks like a rocky summer ahead of us, you might be searching for dividend paying stocks in defensive sectors, such as healthcare. Investors have been favoring healthcare stocks so far in 2011, sending the sector up nearly 14% year-to-date. The problem for income investors, though, is that the healthcare stocks that have performed the best don’t pay dividends – indeed there are only 5 dividend stocks in the top 100 performing healthcare stocks year-to-date, and those 5 have low dividend yields of around 1% +/-.
We wondered if there are any undervalued dividend stocks that institutional investors have been buying, and we came up with one: Psychemedics, (PMD), a micro-cap, drug-testing firm, with a dividend yield approaching 5%. PMD is listed in the healthcare section of our High Dividend Stocks By Sector Tables.
Psychemedics was established in 1987 to provide testing for drugs of abuse using hair analysis
Double Dividend Stocks submits:
Standard & Poors shows the Basic Materials as being the 2nd worst sector year-to-date in 2011, up only .84%, lagging only the dreaded Financial sector, which was down -2.99%, as of May 25th. One might think that such poor share performance would suggest lousy future growth prospects for Basic Materials stocks, but, on the contrary, Standard & Poors shows the 2011 estimated EPS growth for this sector as second only to Energy stocks – (click charts to expand):
(Data Source: Standard & Poors. EPS Estimates as of 5-18-2011)
Digging back further into past years, 2006 was the record year for overall S&P earnings, and even though 2010 was a good year, only 5 out of the 10 sectors managed to exceed their 2006 aggregate EPS figures:
The Basic Materials sector, along with most other sectors, is projected to beat its record 2006 Operating EPS in 2011, by over 17%, and
Double Dividend Stocks submits:
Looking for undervalued high dividend stocks
Double Dividend Stocks submits:
Are there any undervalued high dividend stocks in the Tech sector? Since this sector has lagged the market in 2011, rising less than 5% thus far, we thought that there might be some overlooked dividend paying stocks that offer some growth potential also. The Standard & Poors data below also suggests that the Tech sector may have good growth prospects this year, with an overall PEG of just .74.
Although Tech stocks don’t generally pay high dividends, and many don’t pay any dividend at all, we did find 3 Tech dividend stocks that appear to be undervalued. We’ve added these 3 stocks to the Tech section of our High Dividend Stocks by Sector tables:
Comtech Telecommunications, (CMTL): Comtech designs, develops, produces and markets products, systems and services for advanced communications solutions in 3 areas: Telecom transmissions, Mobile data communications, and RF microwave amplifiers. Their product lines include: satellite earth station
Double Dividend Stocks submits:
With the Financials sector trailing all others year-to-date, we went bottom feeding, looking for attractively priced dividend paying stocks in this unloved sector.
Sector Performance YTD shows the Financial sector up less than 2%. Click to enlarge:
(Source: Standard & Poors)
However, the 2011 outlook for stocks by sector tells a different story:
(Data Source: Standard & Poors)
Although S&P analysts favor the Basic Materials and Energy sectors, giving them the highest 2011 growth estimates of any sector, they also estimate that the Financials sector will achieve nearly 20% growth in 2011, which tops the Tech sector’s 18.5% growth estimate, and the overall S&P 500 average growth estimate of 16%.
We found 2 dividend stocks in the Assets Management sub-industry that might be bargains, both of which are listed in our High Dividend Stocks By Sector Tables. Note: There is a big disparity in market cap between these 2 firms,
Double Dividend Stocks submits:
As we mentioned in last week’s article on undervalued Financial stocks, Standard & Poor’s recently published a table with projected 2011 Earnings by Industry Sector:
This week, we’ll focus on 3 Energy dividend paying stocks with low PEG ratios, attractive mgt. metrics, and low debt, with options available. Although none of these firms are high dividend stocks, you can still achieve double-digit annualized returns on them, and lower your risk, via selling Covered Calls or Cash Secured Puts.
These 3 dividend stocks are CNOOC (CEO), Marathon Oil (MRO) and China Petroleum & Chemical (SNP):
(Company Profiles are listed at the bottom of this article.)
Here are sector comps for these 3 firms (click to enlarge):
All 3 firms look good when compared to broad sector avgs., excepting Profit Margin and and Dividend Payout ratio. Clearly, CEO stands out above the other 2 firms, for mgt. metrics and profitability. This stems
Double Dividend Stocks submits:
Since the crash, many investors have shunned financial stocks, having been badly burned during the market meltdown. However, Standard & Poor’s recently published a projected 2011 EPS growth-by-sector table that puts the Financial sector near the top for expected growth in 2011:
There are currently some financial dividend paying stocks that are undervalued, when analysed by their 2011 PEG values. In addition, they each offer a hefty dividend yield. This week, we screened for Financial stocks with attractive ROE, high dividend yields, strong profit margins, and low 2011 PEG ratios. We came up with 3 financial dividend stocks, 2 REIT’s and a Diversified Investments firm, which we’ve added to the Financials section of our High Dividend Stocks by Sector Tables:
Resource Capital Corp REIT., (RSO), NY Mortgage Trust REIT, (NYMT), and Main St. Capital, (MAIN). Click to enlarge:
Although it has the lowest dividend yield, MAIN looks to have the
