8/14/2012

11 Dividend Challengers With Highest Dividend Payout Potential

Dividend Challengers With Significant Payout Potential Researched By Dividend Yield - Stock, Capital, Investment. Dividend Challengers are stocks with a history of consecutive dividend hikes of more than 5 years but less than 10. Exactly 195 companies raised dividends over such a long history but the potential for additional increases is still high. I made a screen of the best yielding Dividend Challengers with the highest dividend payout potential. First, I selected all stocks with a debt to equity ratio of less than 0.5 and a current payout ratio below 20 percent. Second, the company needs to grow in earnings over the mid-term. Because of this, I decided to screen all stocks with 5-year earnings per share growth of at least 10 percent. Eleven companies remained of which nine are currently recommended to buy.


Here are my favorite stocks:
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CVS Caremark (NYSE:CVS) has a market capitalization of $56.13 billion. The company employs 202,000 people, generates revenue of $107,100.00 million and has a net income of $3,488.00 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $7,898.00 million. The EBITDA margin is 7.37 percent (operating margin 5.91 percent and net profit margin 3.26 percent).

Financial Analysis: The total debt represents 15.52 percent of the company’s assets and the total debt in relation to the equity amounts to 26.32 percent. Due to the financial situation, a return on equity of 9.22 percent was realized. Twelve trailing months earnings per share reached a value of $2.83. Last fiscal year, the company paid $0.50 in form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 15.58, P/S ratio 0.53 and P/B ratio 1.52. Dividend Yield: 1.45 percent. The beta ratio is 0.74.


Long-Term Stock History Chart Of CVS Caremark Corp... (Click to enlarge)
Long-Term Dividends History of CVS Caremark Corp... (CVS) (Click to enlarge)
Long-Term Dividend Yield History of CVS Caremark Corp... (NYSE: CVS) (Click to enlarge)

Cummins (NYSE:CMI) has a market capitalization of $19.21 billion. The company employs 44,000 people, generates revenue of $18,048.00 million and has a net income of $1,946.00 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $2,586.00 million. The EBITDA margin is 14.33 percent (operating margin 14.85 percent and net profit margin 10.78 percent). 


Financial Analysis: The total debt represents 5.88 percent of the company’s assets and the total debt in relation to the equity amounts to 12.49 percent. Due to the financial situation, a return on equity of 36.37 percent was realized. Twelve trailing months earnings per share reached a value of $10.06. Last fiscal year, the company paid $1.32 in form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 10.03, P/S ratio 1.06 and P/B ratio 3.52. Dividend Yield: 1.99 percent. The beta ratio is 2.01.


Long-Term Stock History Chart Of Cummins Inc. (Click to enlarge)
Long-Term Dividends History of Cummins Inc. (CMI) (Click to enlarge)
Long-Term Dividend Yield History of Cummins Inc. (NYSE: CMI) (Click to enlarge)

Costco Wholesale (NASDAQ:COST) has a market capitalization of $41.36 billion. The company employs 92,000 people, generates revenue of $88,915.00 million and has a net income of $1,542.00 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $3,294.00 million. The EBITDA margin is 3.70 percent (operating margin 2.74 percent and net profit margin 1.73 percent).


Financial Analysis: The total debt represents 8.05 percent of the company’s assets and the total debt in relation to the equity amounts to 17.94 percent. Due to the financial situation, a return on equity of 12.81 percent was realized. Twelve trailing months earnings per share reached a value of $3.58. Last fiscal year, the company paid $0.89 in form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 26.73, P/S ratio 0.46 and P/B ratio 3.46. Dividend Yield: 1.15 percent. The beta ratio is 0.68.


Long-Term Stock History Chart Of Costco Wholesale ... (Click to enlarge)
Long-Term Dividends History of Costco Wholesale ... (COST) (Click to enlarge)
Long-Term Dividend Yield History of Costco Wholesale ... (NASDAQ: COST) (Click to enlarge)


Take a closer look at the full table of Dividend Challengers with highest payout potential. The average price to earnings ratio (P/E ratio) amounts to 6.40 and forward P/E ratio is 13.73. The dividend yield has a value of 1.15 percent. Price to book ratio is 3.13 and price to sales ratio 1.49. The operating margin amounts to 13.37 percent and the beta ratio is 1.18.

Here is the full table with some fundamentals (TTM):

Dividend Challengers With Highest Dividend Payout Potential (Click to enlarge)
Related stock ticker symbols:
AIZ, CMI, CVS, NEU, COST, FLS, ALTR, FINL, LSTR, HEI, AAN

Selected Articles:

* 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.

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