Linked here is a PDF copy of my analysis of BB&T Corporation (BBT) (alt.1, alt.2). Below are some highlights from the above linked analysis:
Company Description: The BB&T Corporation operates as a holding company for Branch Banking and Trust Company that provides commercial banking and trust services for small and mid-size businesses, public agencies, local governments, and individuals in the United States.
Fair Value: I consider four calculations of fair value, see page 2 of the linked PDF for a detailed description: 1.) Avg. High Yield Price, 2.) 20-Year DCF Price, 3.) Avg. P/E Price and 4.) Graham Number. BBT is trading at a discount to 1.) and 3.) above. If I exclude the high and low valuation, and average the remaining two valuations, BBT is trading at a 14.2% discount. BBT earns a Star for trading at a fair value.
Dividend Analytical Data: In this section I consider five factors, see page 2 of the linked PDF for a detailed description: 1.) Rolling 4-yr Div. > 15%, 2.) Dividend Growth Rate, 3.) Years of Div. Growth, 4.) 1-Yr. > 5-Yr Growth and 5.) Payout 15% of avg. BBT earned Stars in 3.) and 4.) above. It has increased its dividend for 10+ years and its 1-year dividend rate growth exceeded its 5-year dividend growth rate.
Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA)? This section compares the earning ability of this stock with a high yield MMA. Two items are considered in this section, see page 2 of the linked PDF for a detailed description: 1.) NPV MMA Diff. and 2.) Years to >MMA. BBT earned both available Stars in this section. Its current yield of 5.62% is in excess of the high-yield MMA rate of 4.61% and the NPV MMA Diff. is impressive at $24,628.
Other: BBT is both an S&P 500 Dividend Aristocrat and a member of The Broad Dividend Achievers™ Index. It has paid a cash dividend to shareholders every year since 1903 and has increased its quarterly cash dividend payments for 36 consecutive years.
Conclusion: BBT earned one Star in the Fair Value section, earned two Stars in the Dividend Analytical Data section and two Stars in the Dividend Income vs. MMA section for a total of five Stars, which rates it as a 5-Star Strong Buy.
Disclaimer: Material presented here is for informational purposes only. The above quantitative stock analysis, including the Star rating, is mechanically calculated and is based on historical information. The analysis assumes the stock will perform in the future as it has in the past. This is generally never true. Before buying or selling any stock you should do your own research and reach your own conclusion. See my Disclaimer for more information.
Full Disclosure: At the time of this writing, I own shares of BBT (2.9% of my Income Portfolio).
What are your thoughts on BBT?
Recent Stock Analyses:
- 6 Stocks Providing A Growing Income With Increased Dividends
- Dividend Stock Analysis: Is It Time To Buy ConocoPhillips?
Popular Posts - Last 7 days
Presented below are my dividend stock and ETF/CEF holdings. This is not a recommendation to buy these securities. I have classified some of...
Are you confident and secure in your investing process? It is my firm belief that most investors will lose money in the stock market over t...
Each Sunday I highlight any notable articles that I came across over the past week, along with any Carnivals I participated in. For those re...
Linked here is a detailed quantitative analysis of Cincinnati Financial Corp. (CINF). Below are some highlights from the above linked analy...
Monday, October 31, 2011 will mark my fourth full year of writing as Dividends4Life . It is hard to believe another year has passed. Like th...
The Pocket Change Portfolio (PCP) was first introduced on September 13, 2008 as a real money dividend income portfolio funded by the "...
Like many that came before me, I am on a journey to construct a portfolio that will provide me... Dividends 4 Life
When to buy a stock and at what price are very important decisions. However, serious investors will tell you the most important decision is ...
We have all heard it... Stodgy, for old people, yawn, boring! These have all been used to describe investing in dividend growth stocks. Neve...
Dividends4Life , Dividends Value , Dividend Growth Stocks and my entire blogging experience was started on a whim. I never expected it go ...