Tuesday, May 10, 2022

3 Low P/E Value-Stocks, Yielding 4% 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%. Select results are presented below:

Walgreens Boots Alliance, Inc. (WBA) is the largest U.S. retail drug chain in terms of revenues, this company operates more than 8,000 drug stores throughout the U.S. and Puerto Rico. The company has paid a cash dividend to shareholders every year since 1933 and has increased its dividend payments for 47 consecutive years. Yield: 4.2% | P/E: 5.8

Franklin Resources Inc. (BEN) is one of the world's largest asset managers, serving retail, institutional and high-net-worth clients. The company has paid a cash dividend to shareholders every year since 1981 and has increased its dividend payments for 41 consecutive years. Yield: 4.6% | P/E: 6.5

Universal Health Realty Income Trust (UHT) is a real estate investment trust (REIT) that invests in healthcare and human service related facilities. The company has paid a cash dividend to shareholders every year since 1987 and has increased its dividend payments for 36 consecutive years. Yield: 5.7% | P/E: 6.3

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 a 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 weekend for subscribers.

Full Disclosure: Long UHT,.

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Tags: WBA, BEN, UHT,