8/13/2013

13 Cheap High Beta Basic Material Dividend Stocks

Cheap high beta dividend stocks from the basic material sector originally published at long-term-investments.blogspot.com. The basic material sector is under fire. Nobody wants to go long on raw material producer or related industries. The fear of a slowing growth in China with the result of cheaper commodity prices is still aware.

The whole sector is down 3.1 percent over the recent six months while the best sector gained 17.9 percent during the same period. So many stocks can be bought for a single P/E within the sector but the risk is still high.

Today I would like to proceed my monthly screening serial about high beta dividend stocks. The basic material sector has a huge base of stock ideas on this field. In order to get the best results, I need to increase my limitations like this:


- Market capitalization over USD 10 billion
- Forward P/E below 15
- 5Y future earnings per share growth over 15 percent yearly
- Beta ratio over 1

Thirteen companies fulfilled these criteria of which one is a High-Yield. All results have a current buy or better rating.

Here are the highst yielding results:
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Seadrill (NYSE:SDRL) has a market capitalization of $20.84 billion. The company employs 8,700 people, generates revenue of $4.478 billion and has a net income of $1.205 billion. Seadrill’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $2.406 billion. The EBITDA margin is 53.73 percent (the operating margin is 40.00 percent and the net profit margin 26.91 percent).

Financial Analysis: The total debt represents 60.24 percent of Seadrill’s assets and the total debt in relation to the equity amounts to 214.92 percent. Due to the financial situation, a return on equity of 19.30 percent was realized by Seadrill. Twelve trailing months earnings per share reached a value of $2.31. Last fiscal year, Seadrill paid $3.36 in the form of dividends to shareholders. The forward P/E is 12.39 at expected earnings growth of 27.0 percent for the next five years yearly.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 19.19, the P/S ratio is 4.64 and the P/B ratio is finally 3.79. The dividend yield amounts to 7.92 percent and the beta ratio has a value of 2.03.


Long-Term Stock Price Chart Of Seadrill (SDRL)
Long-Term Dividend Payment History of Seadrill (SDRL)
Long-Term Dividend Yield History of Seadrill (SDRL)

ArcelorMittal (NYSE:MT) has a market capitalization of $22.89 billion. The company employs 231,000 people, generates revenue of $84.213 billion and has a net income of $-3,844.00 million. ArcelorMittal’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $375.00 million. The EBITDA margin is 0.45 percent (the operating margin is -3.83 percent and the net profit margin -4.56 percent).

Financial Analysis: The total debt represents 22.96 percent of ArcelorMittal’s assets and the total debt in relation to the equity amounts to 50.86 percent. Due to the financial situation, a return on equity of -6.90 percent was realized by ArcelorMittal. Twelve trailing months earnings per share reached a value of $-3.51. Last fiscal year, ArcelorMittal paid $0.75 in the form of dividends to shareholders.  The forward P/E is 13.02 at expected earnings growth of 32.50 percent for the next five years yearly.

Market Valuation: Here are the price ratios of the company: The P/E ratio is not calculable, the P/S ratio is 0.28 and the P/B ratio is finally 0.41. The dividend yield amounts to 5.78 percent and the beta ratio has a value of 2.26.


Long-Term Stock Price Chart Of ArcelorMittal (MT)
Long-Term Dividend Payment History of ArcelorMittal (MT)
Long-Term Dividend Yield History of ArcelorMittal (MT)

Vale (NYSE:VALE) has a market capitalization of $79.93 billion. The company employs 70,785 people, generates revenue of $47.694 billion and has a net income of $6.255 billion. Vale’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $18.892 billion. The EBITDA margin is 39.61 percent (the operating margin is 19.34 percent and the net profit margin 13.11 percent).

Financial Analysis: The total debt represents 24.49 percent of Vale’s assets and the total debt in relation to the equity amounts to 43.37 percent. Due to the financial situation, a return on equity of 9.33 percent was realized by Vale. Twelve trailing months earnings per share reached a value of $0.81. Last fiscal year, Vale paid $1.15 in the form of dividends to shareholders.  The forward P/E is 7.87 at expected earnings growth of 17.24 percent for the next five years yearly.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 19.09, the P/S ratio is 1.65 and the P/B ratio is finally 1.08. The dividend yield amounts to 5.28 percent and the beta ratio has a value of 1.46.


Long-Term Stock Price Chart Of Vale (VALE)
Long-Term Dividend Payment History of Vale (VALE)
Long-Term Dividend Yield History of Vale (VALE)

Transocean (NYSE:RIG) has a market capitalization of $17.13 billion. The company employs 18,400 people, generates revenue of $9.196 billion and has a net income of $816.00 million. Transocean’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $3.592 billion. The EBITDA margin is 39.06 percent (the operating margin is 17.21 percent and the net profit margin 8.87 percent).

Financial Analysis: The total debt represents 36.37 percent of Transocean’s assets and the total debt in relation to the equity amounts to 79.13 percent. Due to the financial situation, a return on equity of 5.15 percent was realized by Transocean. Twelve trailing months earnings per share reached a value of $4.58. Last fiscal year, Transocean paid no dividends to shareholders. The forward P/E is 8.19 at expected earnings growth of 27.35 percent for the next five years yearly.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 10.37, the P/S ratio is 1.86 and the P/B ratio is finally 1.09. The dividend yield amounts to 4.71 percent and the beta ratio has a value of 1.25.


Long-Term Stock Price Chart Of Transocean (RIG)
Long-Term Dividend Payment History of Transocean (RIG)
Long-Term Dividend Yield History of Transocean (RIG)

Take a closer look at the full list of cheap high beta basic material dividend stocks. The average P/E ratio amounts to 17.20 and forward P/E ratio is 10.50. The dividend yield has a value of 3.23 percent. Price to book ratio is 1.66 and price to sales ratio 1.90. The operating margin amounts to 20.29 percent and the beta ratio is 1.57. Stocks from the list have an average debt to equity ratio of 0.63.

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

Cheap High Beta Basic Material Dividend Stocks (Click to enlarge)

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Related Stock Ticker Symbols:
SDRL, MT, VALE, RIG, RIO, ESV, PTR, NE, CNQ, SLB, CHK, BHI, HAL

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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