A great source for high-quality stocks are Dividend Champions. Those are stocks with a dividend growth history of 25 or more consecutive years of paying dividends. 105 companies can be found in this category.
Today I'll highlight the best growth picks with acceptable price ratios.
Twelve Dividend Champions fulfilled my criteria of a low forward P/E (less than 15) at double-digit earnings per share forecast for the next five years. The best yielding pick is Walgreen (WAG), the leading drug store operator. Eleven of the results are currently recommended to buy. See the table below.
Walgreen (WAG) has a market capitalization of $37.81 billion. The company employs 171,000 people, generates revenue of $71.633 billion and has a net income of $2.127 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $4.630 billion. The EBITDA margin is 6.46 percent (the operating margin is 4.84 percent and the net profit margin 2.97 percent).
Financial Analysis: The total debt represents 16.11 percent of the company’s assets and the total debt in relation to the equity amounts to 29.57 percent. Due to the financial situation, a return on equity of 12.86 percent was realized. Twelve trailing months earnings per share reached a value of $2.23. Last fiscal year, the company paid $0.95 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 17.94, the P/S ratio is 0.53 and the P/B ratio is finally 2.07. The dividend yield amounts to 2.75 percent and the beta ratio has a value of 1.02.
Target Corporation (TGT) has a market capitalization of $39.60 billion. The company employs 365,000 people, generates revenue of $69.865 billion and has a net income of $2.929 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $7.453 billion. The EBITDA margin is 10.67 percent (the operating margin is 6.38 percent and the net profit margin 4.19 percent).
Financial Analysis: The total debt represents 38.73 percent of the company’s assets and the total debt in relation to the equity amounts to 114.14 percent. Due to the financial situation, a return on equity of 18.71 percent was realized. Twelve trailing months earnings per share reached a value of $4.51. Last fiscal year, the company paid $1.15 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 13.48, the P/S ratio is 0.57 and the P/B ratio is finally 2.57. The dividend yield amounts to 2.37 percent and the beta ratio has a value of 0.92.
Dover Corporation (DOV) has a market capitalization of $12.52 billion. The company employs 34,000 people, generates revenue of $8.104 billion and has a net income of $833.12 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1.622 billion. The EBITDA margin is 20.03 percent (the operating margin is 15.61 percent and the net profit margin 10.28 percent).
Financial Analysis: The total debt represents 26.81 percent of the company’s assets and the total debt in relation to the equity amounts to 56.92 percent. Due to the financial situation, a return on equity of 16.92 percent was realized. Twelve trailing months earnings per share reached a value of $4.47. Last fiscal year, the company paid $1.33 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 15.63, the P/S ratio is 1.54 and the P/B ratio is finally 2.55. The dividend yield amounts to 2.00 percent and the beta ratio has a value of 1.38.
Take a closer look at the full list of Cheap Dividend Champions. The average P/E ratio amounts to 16.01 and forward P/E ratio is 12.78. The dividend yield has a value of 1.74 percent. Price to book ratio is 2.99 and price to sales ratio 1.57. The operating margin amounts to 12.47 percent and the beta ratio is 1.09. Stocks from the list have an average debt to equity ratio of 0.51.
Here is the full table with some fundamentals (TTM):
Related stock ticker symbols:
WAG, VFC, TGT, BRC, MHP, DOV, PNR, FDO, EGN, CSL, BEN, SCL
Disclosure: I am long WAG. I receive no compensation to write about these specific stocks, sector or theme. I don't plan to increase or decrease positions or obligations within the next 72 hours.
For the other stocks: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I receive no compensation to write about any specific stock, sector or theme.