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6/25/2013

15 Cheapest Share Buyback Achievers With Growth Potential

Stocks from the Share Buyback Achievers Index with cheap price ratios and growth potential originally published at "long-term-investments.blogspot.com". As you might know, I love growing dividends from a company but my dividend approach has a great fault: It doesn’t take great cash cows with no dividend payments into account.  

A dividend payment is only one way to distribute money back to shareholders. A second way is to buy own shares back. Some companies repurchase their shares instead of the dividend payment and they try to boost earnings per share growth with this model. It’s a very tax-optimized method, especially if you use debt for this process as happened with Apple.

I also look at the number of shares repurchases when I consider buying a stock. The total amount of cash distribution is critical and not the amount of dividend payments in the past. Some companies gave back money in the amount of their whole company over the recent five years and they try to follow this approach for the future. That’s what I really like.

Out there is a great index that covers some of the best dividend growth stocks with share repurchases and adds the best share buyback companies. Within the recent 12 months, all constituents needed to buy at least five percent of their own outstanding shares.

Today I like to screen the Share Buyback Achievers Index by the cheapest dividend stocks with additional growth potential. I selected stocks with a low forward P/E (under 15) as well as a P/B and P/S ratio of less than one. In addition, the five year earnings per share should grow at least with five percent or more.

Fifteen stocks fulfilled the above mentioned criteria. Half of the results pay a dividend between 1 percent and 2.5 percent. The rest is only focused on share buybacks. The good thing is that nine companies have a current buy or better rating.
Here are the best yielding stocks from the screen:
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Xerox Corporation (NYSE:XRX) has a market capitalization of $11.01 billion. The company employs 143,200 people, generates revenue of $22.390 billion and has a net income of $1.071 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $3.029 billion. The EBITDA margin is 13.53 percent (the operating margin is 6.02 percent and the net profit margin 4.78 percent).

Financial Analysis: The total debt represents 28.28 percent of the company’s assets and the total debt in relation to the equity amounts to 71.52 percent. Due to the financial situation, a return on equity of 10.01 percent was realized. Twelve trailing months earnings per share reached a value of $0.92. Last fiscal year, the company paid $0.17 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 9.70, the P/S ratio is 0.49 and the P/B ratio is finally 0.95. The dividend yield amounts to 2.56 percent and the beta ratio has a value of 1.75.


Long-Term Stock Price Chart Of Xerox Corporation (XRX)
Long-Term Dividend Payment History of Xerox Corporation (XRX)
Long-Term Dividend Yield History of Xerox Corporation (XRX)

Assurant (NYSE:AIZ) has a market capitalization of $3.84 billion. The company employs 14,500 people, generates revenue of $8.508 billion and has a net income of $483.70 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $2.270 billion. The EBITDA margin is 26.69 percent (the operating margin is 8.91 percent and the net profit margin 5.69 percent).

Financial Analysis: The total debt represents 3.36 percent of the company’s assets and the total debt in relation to the equity amounts to 18.75 percent. Due to the financial situation, a return on equity of 9.62 percent was realized. Twelve trailing months earnings per share reached a value of $5.23. Last fiscal year, the company paid $0.81 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 9.53, the P/S ratio is 0.45 and the P/B ratio is finally 0.76. The dividend yield amounts to 2.01 percent and the beta ratio has a value of 1.44.


Long-Term Stock Price Chart Of Assurant (AIZ)
Long-Term Dividend Payment History of Assurant (AIZ)
Long-Term Dividend Yield History of Assurant (AIZ)

Unum Group (NYSE:UNM) has a market capitalization of $7.67 billion. The company employs 9,100 people, generates revenue of $10.515 billion and has a net income of $894.40 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1.398 billion. The EBITDA margin is 13.30 percent (the operating margin is 11.88 percent and the net profit margin 8.51 percent).

Financial Analysis: The total debt represents 5.16 percent of the company’s assets and the total debt in relation to the equity amounts to 37.28 percent. Due to the financial situation, a return on equity of 10.66 percent was realized. Twelve trailing months earnings per share reached a value of $3.23. Last fiscal year, the company paid $0.47 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 8.90, the P/S ratio is 0.73 and the P/B ratio is finally 0.90. The dividend yield amounts to 1.81 percent and the beta ratio has a value of 1.72.


Long-Term Stock Price Chart Of Unum Group (UNM)
Long-Term Dividend Payment History of Unum Group (UNM)
Long-Term Dividend Yield History of Unum Group (UNM)

Take a closer look at the full list of the chepest share buyback achievers. The average P/E ratio amounts to 11.71 and forward P/E ratio is 9.71. The dividend yield has a value of 0.88 percent. Price to book ratio is 0.77 and price to sales ratio 0.60. The operating margin amounts to 12.80 percent and the beta ratio is 1.86. Stocks from the list have an average debt to equity ratio of 0.62.

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

Cheapest Stock From The Share Buyback Achievers Index (Click to enlarge)

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Related stock ticker symbols:
XRX, AIZ, UNM, AFG, BBOX, AGII, LNC, CNO, MWW, AIG, PJC, GTI, GPRE, TECD, AMKR

Selected Articles:

*I am long INTC, JNJ. 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.


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