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Summary

  • National Oilwell Varco should be increasing its dividend in the next three months.
  • Travelers should be increasing its dividend in the next three months.
  • Rayonier should be unlocking some value very soon after it splits itself into two.

In a week full of international turmoil, the Dow Jones Industrial Average dropped 2.4% on the week while the S&P 500 lost 2% and the Nasdaq lost 1.9% for the week. The anxiety in Ukraine and economic weakness in China are what our markets are reacting off of. But there are stocks out there that don't have anything to do with those geopolitical/economic issues and bucked the general trend of the market during the week. Williams-Sonoma (NYSE:WSM) is in my portfolio and was up 8.11% during the week, Duke (NYSE:DUK) was up 0.91% and those are just a couple of names. The important thing to do is stay diversified! My portfolio lost only a little less (-1.77%) than the broadly watched three indices.

Call me a pessimistic optimist, but for now I will continue the course and purchase value stocks for my diversified dividend portfolio. Value investing is the bread and butter of Warren Buffett's money-making strategy. The essence of value investing is basically purchasing a stock at less than market value based on certain metrics. My philosophy on dividend investing is to utilize the forward price to earnings ratio and use a one-year PEG ratio, along with a dividend. I don't necessarily look for a stock with a high yield because I like to see capital appreciation. Because the market may be correcting itself from all-time highs I maintain that it is difficult to find good stocks these days. That's why I'm highlighting a select set of excellent value companies in my dividend portfolio, which have had ex-dividend dates or paid out a dividend during this past week or early next week that people should place on their radar.

National-Oilwell Varco, Inc. (NYSE:NOV)

Varco provides equipment and components for oil and gas drilling and production; oilfield services; and supply chain integration services to the upstream oil and gas industry worldwide. On 31Jan14, Varco reported fourth quarter 2013 earnings of $1.56 per share. This result beat the $1.39 consensus of the 29 analysts covering the company and beat last year's fourth quarter results by 4.70%. Varco's PE ratio is among the lowest of any stock in the oil well services & equipment industry and signals that investors have not been willing to pay a premium for this company's business prospects, making it a value story. However, during the past year, earnings growth has lagged its historical five year growth rate.

The company went ex-dividend on 12Mar14 with a $0.26 per share dividend which will be paid on 28Mar14 for a yield of 1.39%. In terms of news pertaining to the company this week, it was downgraded from a "buy" rating to "neutral" by ISI Group.

Let's take a quick look at the technicals here to see if it can be bought at these levels or if a pullback is coming. As we can see, the relative strength index is in middle-ground territory with a current value of 41.32 and downward trajectory, while the MACD chart below shows the black line just crossed below the red line with decreasing divergence bars, meaning there may be some downward momentum on the stock price. I anticipate the stock to move down for now and I wouldn't be initiating a new position here.

(click to enlarge)

The Travelers Cos., Inc. (NYSE:TRV)

Travelers is engaged in providing a range of commercial and personal property and casualty insurance products and services to businesses, government units, associations and individuals. On 21Jan14, Travelers reported fourth quarter 2013 earnings of $2.68 per share. This result beat the $2.16 consensus of the 27 analysts covering the company and beat last year's fourth quarter results by $1.96. Travelers' PE ratio is among the lowest of any stock in the property & casualty insurance industry and signals that investors have not been willing to pay a premium for this company's business prospects, making it a value story. Additionally, during the past year, earnings growth has outpaced its historical five year growth rate.

The company went ex-dividend on 06Mar14 with a $0.50 per share dividend which will be paid on 31Mar14 for a yield of 2.42%. In terms of news pertaining to the company this week, there were no press releases issued during the week by the company.

Let's take a quick look at the technicals here to see if it can be bought at these levels or if a pullback is coming. As we can see, the relative strength index is in middle-ground territory with a current value of 44.32, while the MACD chart below shows the black line just about to cross over the red line with the divergence bars decreasing in height, meaning there may be some bearish momentum coming. I anticipate the stock to move down for now and I wouldn't be initiating a new position here.

(click to enlarge)

Rayonier, Inc. (NYSE:RYN)

Rayonier is compared to real estate investment trusts and is an international forest products company primarily engaged in activities associated with timberland management, the sale and entitlement of real estate, and the production and sale of specialty cellulose fibers and fluff pulp. On 27Jan14, Rayonier reported fourth quarter 2013 earnings of $0.64 per share. This result beat the $0.52 consensus of the 8 analysts covering the company and beat last year's fourth quarter results by 8.47%. Rayonier's PE ratio is among the lowest of any stock in the forestry & wood products industry and signals that investors have not been willing to pay a premium for this company's business prospects, making it a value story. Additionally, during the past year, earnings growth has outpaced its historical five year growth rate.

The company went ex-dividend on 13Mar14 with a $0.49 per share dividend which will be paid on 31Mar14 for a yield of 4.33%. In terms of news pertaining to the company this week, there were no press releases issued during the week by the company.

Let's take a quick look at the technicals here to see if it can be bought at these levels or if a pullback is coming. As we can see, the relative strength index is in middle-ground territory with a current value of 51.93, while the MACD chart below shows the black line below the red line with the divergence bars decreasing in height, meaning there may be some bearish momentum coming. I anticipate the stock to move down for now and I wouldn't be initiating a new position here.

(click to enlarge)

Conclusion

I've highlighted these names because they have all raised their dividend within the past year and are poised to do so again in the coming years. It is important in this market to be able to hold onto companies which raise their dividend rates or initiated them, because it is a sign that the underlying company is doing well financially. The importance of these stocks I've highlighted is that they are value plays while the broader market may be correcting itself. I believe we are at a point in the market where we have to look for value. Remember, stay diversified investors!

Disclaimer: This article is meant to serve as a journal for myself as to the rationale of why I bought/sold this stock when I look back on it in the future. These are only my personal opinions and you should do your own homework. Only you are responsible for what you trade and happy investing!

Disclosure: I am long NOV, TRV, RYN, WSM, DUK. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Source: National Oilwell Varco Heads A List Of 3 Value Dividend Stocks To Put On Your Radar