Wednesday, September 9, 2020

4 Low P/E Value-Stocks, Yielding 2% Or Higher

Before the internet and even before computers, critical financial information was printed daily in newspapers. Though many newspapers 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 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% and less than 10%. The results are presented below:

Bank of the Ozarks (OZK) owns Bank of the Ozarks, which provides retail & commercial banking products and services mainly in the southern United States.
Yield: 4.5% | P/E: 9.5

Raytheon Company (RTX), the world's fifth largest military contractor, specializes in making high-tech missiles, advanced radar systems and sensors, defense electronics, and missile-defense systems.
Yield: 3.1% | P/E: 9.5

Weyco Group, Inc. (WEYS) designs and markets footwear for men, women and children under various brand names, including Florsheim, Nunn Bush, Stacy Adams, BOGS, Rafters and Umi.
Yield: 5.4% | P/E: 8.3

People's United Financial Inc. (PBCT) provides a full range of banking and financial service products to individuals, corporations and municipal customers in the U.S. Northeast.
Yield: 6.5% | P/E: 9.6

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 150+ 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 RTX, PBCT,

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