Obviously the reader would want basic information like the stock's ticker symbol, volume, closing price and possibly high and low price for the day or last 52 weeks. Dividend yield was another piece of useful information often presented. One of the more interesting pieces of information presented was the Price Earnings (P/E) Ratio.
The P/E Ratio is one of the oldest valuation metrics used. It is calculated as the market value per share divided by earnings per share (EPS). A high P/E ratio infers that investors expect strong future earnings growth, or the stock is over-valued. Conversely, a low P/E suggests limited future growth, or the stock is under-valued. Companies with limited growth projects to consume resources have historically been in a position to return large sums of cash to their shareholders as dividends and share buybacks.
This week, I screened my dividend growth stocks database for stocks with a single digit P/E/ Ratio and with a dividend yield above 4%. The results are presented below:
AT&T Inc. (T) provides telephone and broadband service and holds full ownership of AT&T Mobility. The company has paid a cash dividend to shareholders every year since 1984 and has increased its dividend payments for 35 consecutive years. Yield: 5.7% | P/E: 7.5
Meredith Corp. (MDP) publishes a suite of magazines and websites focused on food, parents and women (e.g. Better Homes and Gardens) and operates 17 local TV stations. The company has paid a cash dividend to shareholders every year since 1930 and has increased its dividend payments for 24 consecutive years. Yield: 4.1% | P/E: 8.7
As with past screens, the data presented above is in its raw form. Some of the companies would be disqualified for poor dividend fundamentals. However some of the others may be worth additional due diligence.
My database, D4L-Data, is an Open Office spreadsheet containing more than 20 columns of information on the 200+ companies that I track. The data is sortable and has built-in buttons and macros to make it easy to use. Companies included in the list are those that have had a history of dividend growth. The D4L-Data spreadsheet is a part of D4L-Premium Services and is updated each Saturday for subscribers.
Full Disclosure: Long T and MDP in various Dividend Growth Stock Portfolios. See a list of all my Dividend Growth Portfolio holdings here.
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