critical financial information was printed daily in newspapers. Though many newspaper still print this information, most people find it easier (and faster) to get information on their stocks from financial websites. So back when financial information was a tedious and manual process what was considered relevant enough to warrant inclusion?
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 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. Conversely, a low P/E suggests limited future growth. These 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.
This week week, I screened my dividend growth stocks database for stocks with a single digit P/E/ Ratio and with a dividend yield above 3%. The results are presented below:
Microsoft Corporation (MSFT)
Yield: 3.1% | P/E: 9.46
Microsoft, the world's largest software company, develops PC software, including the Windows operating system and the Office application suite.
Southside Bancshares Inc. (SBSI)
Yield: 3.3% | P/E: 9.65
Southside Bancshares Inc. owns Southside Bank, which primarily provides financial services to individuals, businesses, municipal entities, and non-profit organizations.
Raytheon Company (RTN)
Yield: 3.6% | P/E: 9.95
Raytheon Company, the world's sixth largest military contractor, specializes in making high-tech missiles, advanced radar systems and sensors, defense electronics, and missile-defense systems.
ConocoPhillips Co. (COP)
Yield: 3.6% | P/E: 9.35
ConocoPhillips Co. was formed via the 2002 merger of Phillips Petroleum and Conoco, is the fourth largest integrated oil company in the world.
Lockheed Martin Corp. (LMT)
Yield: 4.9% | P/E: 9.53
Lockheed Martin Corp. is the world's largest military weapons manufacturer, and is also a significant supplier to NASA and other non-defense government agencies. LMT receives about 93% of its revenues from global defense sales.
Pitney Bowes Inc. (PBI)
Yield: 8.0% | P/E: 8.94
Pitney Bowes Inc. is the world's largest maker of mailing systems, and also provides production and document management equipment and facilities management services.
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 LMT, COP, and MSFT in my Dividend Growth Portfolio. See a list of all my dividend growth holdings here.
- Inverted Yield On Cost Curve
- Are You Creating Your Greatest Missed Opportunity?
- The MMA Rate Mystery Solved
- There is Value to be Found in the P/B Ratio
- The Perfect Dividend Stock
Tags: [LMT] [COP] [MSFT] [PBI] [SBSI] [RTN]
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