value-priced stocks, the Price-To-Book (P/B) ratio is one that I like to focus on. P/B is calculated as share price divided by book value per share. Book value is most often calculated as Assets less Liabilities.
Some people conservatively calculate book value as Assets less Intangibles less Liabilities. I prefer the latter since it excludes goodwill and other intangibles which would be difficult to recover in a liquidation, and that is what is used in the calculations below.
P/B is like yield, when it is at an extreme you have to question why it is there. If you determine it is the result of an irrational market movement, a purchase could result in both a higher yield and significant future capital appreciation.
A low P/B ratio could indicate a stock is undervalued or distressed. Since GAAP accounting is mostly based on historical cost, a viable growing company will normally be worth more than its book value. However, there are times when good companies will be punished along with the bad. It is our job as investors to separate the good companies from those that have fundamental problems.
This week week, I screened my dividend growth stocks database for stocks with a P/B of 1.5 or lower, 10 or more years of dividend increases and with a dividend yield at or above 4%. The results are presented below:
Middlesex Water Co. (MSEX)
Yield: 4.0% | Years of Growth: 38 | P/B: 0.92
Middlesex Water Co. primarily provides regulated water utility service in parts of New Jersey and Delaware, as well as operates wastewater systems and conducts municipal contract operations.
Artesian Resource (ARTNA)
Yield: 4.1% | Years of Growth: 14 | P/B: 1.41
Artesian Resource distributes and sells water to residential, commercial, industrial, governmental, municipal, and utility customers in the state of Delaware.
Scana Corporation (SCG)
Yield: 4.4% | Years of Growth: 11 | P/B: 1.40
Scana Corporation is an energy-based holding company that provides electric, natural gas, and telecommunications services.
Mercury General Corp. (MCY)
Yield: 5.4% | Years of Growth: 24 | P/B: 1.44
Mercury General Corp. is an insurance holding company, operating primarily in California, that writes a full line of automobile coverage for all classifications of risk.
Cincinnati Financial Corp. (CINF)
Yield: 5.4% | Years of Growth: 51 | P/B: 0.96
Cincinnati Financial Corp. markets primarily property and casualty coverage. It also conducts life insurance and asset management operations.
National Retail Properties, Inc. (NNN)
Yield: 5.8% | Years of Growth: 20 | P/B: 1.44
National Retail Properties, Inc. is an equity real estate investment trust that invests in high-quality, freestanding retail properties subject to long-term net leases with major retail tenants.
Urstadt Biddle Properties (UBA)
Yield: 5.8% | Years of Growth: 17 | P/B: 1.24
Urstadt Biddle Properties is a real estate investment trust that acquires, owns and manages commercial real estate properties primarily in the northeastern United States.
Senior Housing Properties Trust (SNH)
Yield: 6.8% | Years of Growth: 10 | P/B: 1.48
Senior Housing Properties Trust, a real estate investment trust (REIT), primarily invests in senior housing properties.
Corporate Office Properties (OFC)
Yield: 7.9% | Years of Growth: 14 | P/B: 1.18
Corporate Office Properties is a real estate investment trust that owns, manages, leases, acquires and develops suburban office properties located in Mid-Atlantic region of the U.S. and other select markets.
Old Republic International (ORI)
Yield: 8.5% | Years of Growth: 30 | P/B: 0.54
Old Republic Intl writes property and liability, mortgage guaranty, title and life, and disability insurance.
As with past screens, the data presented above is in its raw form. Some of the 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 210+ 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 CINF, NNN in my dividend growth portfolio and UBA, SNH in my high-yield portfolio. See a list of all my dividend growth holdings here.
- Life is a Choice
- The Will to Win
- Who is Ben Grossbaum and Why Should We Listen to Him?
- Discounted Cash Flow Model (DCF)
- John D. Rockefeller Quotes
- This Sword Has Two Edges!
Tags: [CINF] [NNN] [MSEX] [ARTNA] [SCG] [MCY] [UBA] [SNH] [OFC] [ORI]
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...
There is perceived safety in size. Giant corporations aren't randomly grown. Instead, they are carefully built through superior manageme...
When selecting income investments, the three most important questions to answer are: 1.) Is the investment increasing its dividend each yea...
Linked here is a detailed quantitative analysis of General Mills, Inc. (GIS). Below are some highlights from the above linked analysis: C...
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 Walgreen Co. (WAG). Below are some highlights from the above linked analysis: Company ...
Investing in dividend growth stocks is a long-term proposition. One of the beauties of following a dividend growth strategy is that you d...
When to buy a stock and at what price are very important decisions. However, serious investors will tell you the most important decision is ...
Linked here is a detailed quantitative analysis of General Dynamics (GD). Below are some highlights from the above linked analysis: Compa...
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...