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12/19/2012

My Best Dividend Aristocrat Growth Picks For 2013

Buying high quality stocks at cheap prices is one of the major missions of a successful trader. Many investors failed to implement this strategy. I have also done a lot of loss-trades within the recent years and lost much money. If I accumulate all this money which is now far away at other investors who sold the stocks earlier, I would be a rich man. I learned a lot from it. People should buy some higher valuated companies with a safer business model. I believe that if you realize a return of 5-9 percent plus a final dividend of 1-3 percent, you have done a real good investment.

However, I proceed with my 2013 stock picks. Today, Dividend Aristocrats are in my main focus. Those stocks raised dividends over a period of more than 25 consecutive years and being selected by the credit rating agency Standard & Poor’s.

These are my criteria:

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

Fourteen Dividend Aristocrats fulfilled these criteria of which three yielding above three percent. Nine are currently recommended to buy. Dividend Aristocrats are not as cheap as other potential dividend growth stocks because the market has identified the quality of the stocks. Would you pay a higher price for more quality or do you prefer cheaper stocks with more return potential. Let me know your thoughts below in our comment box.

Here are the 3 most recommended Aristocrats:
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V.F. Corporation (NYSE:VFC) has a market capitalization of $16.73 billion. The company employs 58,000 people, generates revenue of $9.459 billion and has a net income of $890.39 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1.413 billion. The EBITDA margin is 14.95 percent (the operating margin is 13.16 percent and the net profit margin 9.41 percent).

Financial Analysis: The total debt represents 22.72 percent of the company’s assets and the total debt in relation to the equity amounts to 46.76 percent. Due to the financial situation, a return on equity of 21.18 percent was realized. Twelve trailing months earnings per share reached a value of $9.01. Last fiscal year, the company paid $2.61 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 16.85, the P/S ratio is 1.77 and the P/B ratio is finally 3.71. The dividend yield amounts to 2.29 percent and the beta ratio has a value of 0.89.


”Long-Term
Long-Term Stock History Chart Of V.F. Corporation (VFC)
”Long-Term
Long-Term Dividends History of V.F. Corporation (VFC)
”Long-Term
Long-Term Dividend Yield History of V.F. Corporation (VFC)

Medtronic (NYSE:MDT) has a market capitalization of $43.29 billion. The company employs 45,000 people, generates revenue of $16.184 billion and has a net income of $3.415 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $5.127 billion. The EBITDA margin is 31.68 percent (the operating margin is 25.61 percent and the net profit margin 21.10 percent).

Financial Analysis: The total debt represents 32.14 percent of the company’s assets and the total debt in relation to the equity amounts to 62.13 percent. Due to the financial situation, a return on equity of 20.65 percent was realized. Twelve trailing months earnings per share reached a value of $3.11. Last fiscal year, the company paid $0.97 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 13.78, the P/S ratio is 2.67 and the P/B ratio is finally 2.59. The dividend yield amounts to 2.43 percent and the beta ratio has a value of 0.88.


”Long-Term
Long-Term Stock History Chart Of Medtronic (MDT)
”Long-Term
Long-Term Dividends History of Medtronic (MDT)
”Long-Term
Long-Term Dividend Yield History of Medtronic (MDT)

Illinois Tool Works (NYSE:ITW) has a market capitalization of $28.64 billion. The company employs 65,000 people, generates revenue of $17.786 billion and has a net income of $2.017 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $3.320 billion. The EBITDA margin is 18.67 percent (the operating margin is 15.35 percent and the net profit margin 11.34 percent).

Financial Analysis: The total debt represents 22.19 percent of the company’s assets and the total debt in relation to the equity amounts to 39.83 percent. Due to the financial situation, a return on equity of 20.60 percent was realized. Twelve trailing months earnings per share reached a value of $4.10. Last fiscal year, the company paid $1.40 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 15.08, the P/S ratio is 1.61 and the P/B ratio is finally 2.98. The dividend yield amounts to 2.46 percent and the beta ratio has a value of 1.16.


”Long-Term
Long-Term Stock History Chart Of Illinois Tool Works (ITW)
”Long-Term
Long-Term Dividends History of Illinois Tool Works (ITW)
”Long-Term
Long-Term Dividend Yield History of Illinois Tool Works (ITW)


Take a closer look at the full list of my best Dividend Aristocrats stock picks 2013. The average P/E ratio amounts to 17.86 and forward P/E ratio is 12.88. The dividend yield has a value of 2.52 percent. Price to book ratio is 3.02 and price to sales ratio 1.49. The operating margin amounts to 13.87 percent and the beta ratio is 0.75. The average stock from the screening results has a debt to equity ratio of 0.51.

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

Dividend Aristocrat Growth Picks (Click to enlarge)

If you like this list, please give us a Facebook Like, make a tweet or post a comment below!

Related stock ticker symbols:
T, ABT, BMS, SWK, AFL, XOM, MMM, ITW, MDT, VFC, WMT, HRL, FDO, BCR

Selected Articles:

* I am long MDT, WMT. 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.

4 comments:

  1. Anonymous12/19/2012

    The equity asset class that many believe is overvalued is the high-quality dividend growth stock. This perception has been created in part because many of these stocks have performed well lately. Many stocks in this group were so undervalued that even after their prices rose, they have only become fairly valued, while some still remain undervalued. I prefer Aristocrats also if they are very expensive.

    ReplyDelete
  2. I would like to say that there are 5 reasons to buy high-yield sgx dividend shares: - Income, capital gain, total return, Blue-chip security, Rising dividends.

    Singapore dividend stocks

    ReplyDelete
  3. Nice idea "sgx dividend". Do you have any detailed picks you want to share with us? Let us know, we will discuss.

    ReplyDelete
  4. Interesting blog post.Regarding Best SGX stock picks to get superior quality shares at very economic price..,

    ReplyDelete

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