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 might be difficult to recover in a liquidation, and that is what is used in the calculations below.
P/B is similar to yield, in that 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, 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:
Universal Corporation (UVV)
Yield: 4.2% | Years of Growth: 42 | P/B: 1.00
Universal Corporation, a leaf tobacco merchant and processor, buys, processes, packs, stores, ships, and finances leaf tobacco for sale to manufacturers of consumer tobacco products.
WGL Holdings Inc. (WGL)
Yield: 4.3% | Years of Growth: 36 | P/B: 1.46
WGL Holdings Inc. provides natural gas service in the Washington, DC, metropolitan area and surrounding regions, including Maryland and Virginia.
Cincinnati Financial Corp. (CINF)
Yield: 4.2% | Years of Growth: 52 | P/B: 1.23
Cincinnati Financial Corp. is an insurance holding company that primarily markets property and casualty coverage. It also conducts life insurance and asset management operations.
Consolidated Edison, Inc. (ED)
Yield: 4.4% | Years of Growth: 39 | P/B: 1.45
Consolidated Edison, Inc. is an electric and gas utility holding company serves parts of New York, New Jersey and Pennsylvania.
Avista Corporation (AVA)
Yield: 5.0% | Years of Growth: 10 | P/B: 1.19
Avista Corp. generates, transmits and distributes energy as well as engages in energy-related businesses. The company operates in two business segments.
National Retail Properties, Inc. (NNN)
Yield: 5.2% | Years of Growth: 21 | P/B: 1.47
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.
Mercury General C Corp. (MCY)
Yield: 6.2% | Years of Growth: 25 | P/B: 1.22
Mercury General Corp. is an insurance holding company, operating primarily in California, writes a full line of automobile coverage for all classifications of risk.
Senior Housing Properties Trust (SNH)
Yield: 7.0% | Years of Growth: 11 | P/B: 1.50
Senior Housing Properties Trust, a real estate investment trust (REIT), primarily invests in senior housing properties.
Old Republic International (ORI)
Yield: 7.1% | Years of Growth: 31 | P/B: 0.70
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 220+ 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, ED, NNN in my Dividend Growth Portfolio and AVA, MCY, SNH in my High-Yield Portfolio. See a list of all my dividend growth holdings here.
- 9 High-Yield Dividend Achievers With 25 Years of Increases
- 7 Dividend Stocks For A Confident And Secure Future
- 7 High Yielders With A Low Free Cash Flow Payout
- Wealth is a Journey, Dividend Stocks Can Take You There
- 5 Higher-Yielding, Income Growing Tech Stocks
Tags: [UVV] [WGL] [CINF] [ED] [AVA] [NNN] [MCY] [SNH] [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...
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...
Like many that came before me, I am on a journey to construct a portfolio that will provide me... Dividends 4 Life
Forget about those 'Make 534% On Every Trade' ads that you see on many financial websites. Real wealth is built with sweat equity an...
There are income investors and Dividend Growth investors. While the distinction is rather simple, it slips past many casual observers. Inco...
Investing in dividend growth stocks is a long-term proposition. One of the beauties of following a dividend growth strategy is that you don...
D4L-Premium Services is designed to provide the busy dividend growth investor with a wealth of relevant information. Each week the D4L-Prem...
Dividends are not paid with sales, earnings, EPS, EBIT or EBITDA. Instead dividends are paid with cash. As an investor, you want to pay clos...
Linked here is a detailed quantitative analysis of Illinois Tool Works Inc. (ITW). Below are some highlights from the above linked analysis...
There is perceived safety in size . Giant corporations aren't randomly grown. Instead, they are carefully built through superior manag...