12 Attractive Companies That Also Pay a Dividend 35 comments
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ValueExpectations.com recently posted, “Dividends are falling, so stocks have less value?” which gave some insight on our thoughts on the effect dividends have on stock values. We concluded that dividends alone are irrelevant in estimating a company’s value.
As a follow up to that article we have identified a dozen companies that pay a dividend and have the fundamentals to support the dividend. We looked at several fundamental factors to flush out companies that may be at risk of reducing their dividend in the near future. The end result, was a list of companies with:
-Positive Future Economic Margins
-Low Financial Debt
-High Management Quality
-High Valuation Score
-High Dividend Yield
Solid Companies That Pay A Dividend: (click to enlarge)
*AFG’s Value Expectation interface allows us to understand the imbedded Sales Growth, EBITDA Margins, and Asset Turnovers a company has to deliver in the future to justify its current trading price. In theory and in normal circumstances, if the imbedded future performance is very conservative relative to the company’s historical performance, the stock is regarded as undervalued. The above table displays the implied future sales growth of these companies assuming their EBITDA margins and Asset turnovers stay at the 5 year median levels.
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This article has 35 comments:
I'm concerned about this new Administration. It looks to me to be the most anti-business Ad in the nation's history.
Because of that I'm not so sure anything in America is safe!
Dividends .... ?
Earn 3% in div and lose 20% in stock value .... ?
The only safe div is "Hold onto your own cash"
TONY WYAN
That may be a while.
Very disappointing.
Snail's pace and falling behind
year after year.
On Mar 01 10:42 AM ArtfulDodger wrote:
> Who's worried about the economy?
>
> I'm concerned about this new Administration. It looks to me to be
> the most anti-business Ad in the nation's history.
>
> Because of that I'm not so sure anything in America is safe!
History has shown us that we can't rely soley on long term growth for an industry. I speak in general that the payment of dividends is managements way of showing the public they are capable of managing a company for the long term.
After all, if it weren't for the stockholders, management wouldn't have a job. Dividends reward the stockholders for taking a risk in their managment of a company.
On Mar 01 12:05 PM HATEFEEBAY wrote:
> Why isn't Alcoa (seekingalpha.com/symbo...) on this list??!?!?!?
> I own $300+K of it and I LOVE it-esp at $7 a share!
www.bloomberg.com/apps...
Just send me your money, and I'll send you back 10% of it each year, and you'll still own your shares of Chris B enterprises.
Perhaps if I was a publicly traded corporation, this would sound like a good deal to you.
Before you buy MSFT, ask yourself the following questions:
1) Why will people be buying more computers than in the past? What does Vista or 7 do for most people that a 4 year old XP computer wouldn't do just as fast? How many upgrades do you expect to occur during a deep recession / depression?
2) Do you want to own a company that consistently produces an inferior product? Think about the security vulnerabilities inherent to Windows' architecture. Think about the XBox. Think about Hotmail. Think about the Zune, the only mp3 player ever known to have crashed. Everything they touch. Ask a tech person.
3) How is MSFT responding to the following long-term trends: open source / linux, online applications, cloud computing, netbooks, smart phones, social networking, artificial intelligence, the rise of China, etc? Why are competitors leading the way in ALL of these areas? What happens to tech companies that don't adapt?
Amd what is so attractive about a stock price that falls for years
I like MSFT, JNJ, and GD from your list.
Now that cutting dividends is de rigeur, even companies that don't need to cut them will jump on the bandwagon and take cover in the fact that others are cutting. Executives want all the available cash to buy back shares, so that their options can come back into the money. Paying dividends to the owners (i.e. the shareholders) is too old-fashioned, as it reduces the executives' loot, disguised as options.
On Mar 01 11:56 AM YoMama wrote:
> JNJ and NOK might be the safest payers on this list. Three more to
> consider is PG,KFT and MCD for safety and regular increases. If you
> put stock price movements above the dividends in importance your
> better off staying in cash .
"a documented fact"? Prove this "documented fact". What's your idea of a "documented fact"?
You're an idiot. Brush up on "your research".
On Mar 01 03:04 PM User 184868 wrote:
> Obama is a communist, this is documented fact and not propaganda.
> Anyone who wishes just to take a little time a do a little research
> will find this out on their own quickly. (I have). It's no wonder
> he's going to tax everyone and redistribute wealth.....
Long term investing in dividend stocks that have been raising their dividends is the smartest, safest, and ONLY way to invest in the stock market. Academic studies have proven so.
I am getting so tired of shills hawking their investment services via empty articles with out of date data.
The author(s) should be ashamed.
Why would he raise taxes on the producers that stimulate the economy and create jobs? Ultimately if these people are getting taxed more they will just lay people off or work less (hurting the working class). They are already well off, there is no incentive to keep reaching for your highest potential once incentives are taken away. My guess is they will take it EZ until he is kicked out of office.
He wants to issue carbon taxes as a disincentive towards pollution, but why does he not see the same correlation when he raises taxes on investors? Higher taxes are a deterrent. In a time like this, why would you use a deterrent towards innovation or progress, after all isn’t that what will get us out of this slump? It seems that the market is not moving because everyone is afraid of what he will do next.
So even though he might not be a true communist, it seems he is making some costly mistakes for us all in America, the land of opportunity and the land that was founded on the pursuit of happiness and not the pursuit of handouts.
On Mar 03 07:56 AM You're Kidding wrote:
> This article provides no depth of discussion on the most important
> topic in stock market investing: dividends.
>
> Long term investing in dividend stocks that have been raising their
> dividends is the smartest, safest, and ONLY way to invest in the
> stock market. Academic studies have proven so.
>
> I am getting so tired of shills hawking their investment services
> via empty articles with out of date data.
>
> The author(s) should be ashamed.
On Mar 01 12:05 PM HATEFEEBAY wrote:
> Why isn't Alcoa (seekingalpha.com/symbo...) on this list??!?!?!?
> I own $300+K of it and I LOVE it-esp at $7 a share!
AND YOU ARE A FOOL.
If you dont know the connection between Barack Obama and the New Party's endorsement of him, his communist predecessor in Hyde Park Chicago and the folks he ran with (like radical/socialist Bill Ayers and the foundations they were on together), and communist Frank Davis Marshall, and the 'dog whistle' comments he's made from time to time to his fellow leftists and redistributionists ... well then you were one of millions of shills who bought the lie that the Mocha Marxist was somebody he aint.
Obama is a clear and present danger to the American free enterprise system, and the markets have in 40 days figured it out now that his massive govt takeover plans are actually proposed legislation. THAT'S why we are down 23% this year, The worst start for any President EVER.
Because Obama is a leftist who never held a real private sector job outside of 'community organizer' (aka professional leftwing agitator). He doesnt respect, honor or understand the free market, capitalism, or those that run businesses and create wealth.
As such, Obama is now the #1 threat to our continued prosperity.
Dividends came back in style thanks to the 2003 tax cuts. I wonder if there will be a connection to a repeal in 15% qualified div tax treatment and a return to the 'low dividends, more buybacks' style of capital use.
A future seeking alpha article awaits.