12/10/2012

Best Basic Material Dividend Stock Buy Picks For 2013

Basic material stocks became popular with the increase in raw material prices due to the strong growth of China from the recent year. Not only directly commodity mining stocks exploded, also supplier of mining equipment started to boom. The basic material sector is a small investment field with around 600 listed companies. I made a list of the best stocks picks for next year. My criteria are:

- Forward P/E under 15
- Past 5Y Sales growth over 10 percent
- Earnings per share growth for the next five years over 10 percent
- Operating Margin over 10 percent
- Market capitalization above USD 10 billion

Nine higher capitalized stocks remained the screening criteria of which eight are currently recommended to buy. The results are dominated by stocks from the oil & gas equipment and services industry. I am not sure if these picks could be the best growth driver for your private wealth. Sure, America is expected to have a current energy boom due to shale gas.

Here are the 3 best recommended stocks:
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Rio Tinto (NYSE:RIO) has a market capitalization of $96.78 billion. The company employs 67,930 people, generates revenue of $60.537 billion and has a net income of $6.775 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $17.081 billion. The EBITDA margin is 28.22 percent (the operating margin is 22.05 percent and the net profit margin 11.19 percent).

Financial Analysis: The total debt represents 17.94 percent of the company’s assets and the total debt in relation to the equity amounts to 40.82 percent. Due to the financial situation, a return on equity of 10.54 percent was realized. Twelve trailing months earnings per share reached a value of $2.24. Last fiscal year, the company paid $1.45 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 23.38, the P/S ratio is 1.67 and the P/B ratio is finally 1.87. The dividend yield amounts to 3.16 percent and the beta ratio has a value of 1.68.


”Long-Term
Long-Term Stock History Chart Of Rio Tinto (RIO)
”Long-Term
Long-Term Dividends History of Rio Tinto (RIO)
”Long-Term
Long-Term Dividend Yield History of Rio Tinto (RIO)

Schlumberger (NYSE:SLB) has a market capitalization of $95.36 billion. The company employs 113,000 people, generates revenue of $39.669 billion and has a net income of $4.793 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $9.661 billion. The EBITDA margin is 24.35 percent (the operating margin is 15.98 percent and the net profit margin 12.08 percent).

Financial Analysis: The total debt represents 17.99 percent of the company’s assets and the total debt in relation to the equity amounts to 31.77 percent. Due to the financial situation, a return on equity of 15.29 percent was realized. Twelve trailing months earnings per share reached a value of $4.09. Last fiscal year, the company paid $1.00 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 17.57, the P/S ratio is 2.40 and the P/B ratio is finally 3.06. The dividend yield amounts to 1.53 percent and the beta ratio has a value of 1.42.


”Long-Term
Long-Term Stock History Chart Of Schlumberger (SLB)
”Long-Term
Long-Term Dividends History of Schlumberger (SLB)
”Long-Term
Long-Term Dividend Yield History of Schlumberger (SLB)

National-Oilwell (NYSE:NOV) has a market capitalization of $29.15 billion. The company employs 42,183 people, generates revenue of $14.658 billion and has a net income of $1,985.00 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $3.492 billion. The EBITDA margin is 23.82 percent (the operating margin is 20.04 percent and the net profit margin 13.54 percent).

Financial Analysis: The total debt represents 2.00 percent of the company’s assets and the total debt in relation to the equity amounts to 2.89 percent. Due to the financial situation, a return on equity of 11.95 percent was realized. Twelve trailing months earnings per share reached a value of $5.62. Last fiscal year, the company paid $0.45 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 12.14, the P/S ratio is 1.99 and the P/B ratio is finally 1.64. The dividend yield amounts to 0.76 percent and the beta ratio has a value of 1.71.


”Long-Term
Long-Term Stock History Chart Of National-Oilwell (NOV)
”Long-Term
Long-Term Dividends History of National-Oilwell (NOV)
”Long-Term
Long-Term Dividend Yield History of National-Oilwell (NOV)

Take a closer look at the full list of the best stock picks for 2013 from the basic material sector. The average P/E ratio amounts to 18.10 and forward P/E ratio is 11.08. The dividend yield has a value of 2.51 percent. Price to book ratio is 1.81 and price to sales ratio 2.90. The operating margin amounts to 24.97 percent. The average stock has a debt to equity ratio of 0.42.

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

Best Basic Material Stock Picks For 2013

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Related stock ticker symbols:
SDRL, RIO, ESV, SLB, AUY, GG, BHI, HAL, NOV

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.

1 comment:

  1. Anonymous12/10/2012

    Even in the more reliable category of basic materials, it is never safe to assume that a dividend stock that is earning moderate to high yields will be able to keep this up ad infinitum. There must be additional indicators that lend confidence and creditability to a company's ability to maintain the attractive yields. Strong profits are essential to a company that wants to keep investors happy.

    ReplyDelete

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