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Summary

  • Every name on this list of dividend growers should be put on your radar.
  • All these stocks are undervalued.
  • All these stocks have been increasing dividends within the past year.

How is your portfolio looking after Friday's selloff in the market with the Dow Jones Industrial Average Index falling 0.96% for the day while the S&P 500 dropped 1.25% and the Nasdaq was down 2.6%. It seems as if Wall Street is taking money out of the high flying momentum names and putting that money to work in the large cap names of the Dow. I have my own thirty stocks that I invest in and my beating wasn't too bad relative to the market (-0.86%). That's because I invest in value dividend paying stocks as opposed to high flyers because I believe that slow and steady wins the race.

Call me a pessimistic optimist, but for now I will continue the course and purchase value stocks for my 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.

AT&T Inc. (NYSE:T)

AT&T is a provider of telecommunications services in the U.S. and worldwide. On 28Jan14, AT&T reported fourth quarter 2013 earnings of $0.53 per share. This result beat the $0.50 consensus of the 27 analysts covering the company and beat last year's fourth quarter results by 20.45%. AT&T's PE ratio is among the lowest of any stock in the communications services industry and signals that investors have not been willing to pay a premium for this company's business prospects, making it a value stock.

The company goes ex-dividend on 08Apr14 with a $0.46 per share dividend which will be paid on 01May14 for a yield of 5.18%. In terms of news pertaining to the company this week, it has authorized the purchase of 300 million shares to its buyback program.

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 overbought territory with a current value of 77.79, while the MACD chart below shows the black line above the red line with decreasing divergence bars, meaning the bullish momentum on the stock price is coming to an end. I anticipate the stock to start dropping from here and will not pull the trigger on a new batch.

(click to enlarge)

Union Pacific Corp. (NYSE:UNP)

Union Pacific owns transportation companies, of which its principal operating company, Union Pacific Railroad Company, connects 23 states in the western 66% of the United States. On 23Jan14, Union Pacific reported fourth quarter 2013 earnings of $2.55 per share. This result beat the consensus of the 26 analysts following the company by $0.06 and beat last year's fourth quarter results by 16.44%. Union Pacific's PE ratio is below the railroads industry average and signals that investors are not willing to pay a premium for this stock, 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 26Feb14 with a $0.91 per share dividend which was paid on 01Apr14 for a yield of 2.02%. 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 58.2, while the MACD chart below shows the black line below the red line with increasing divergence bars, meaning there may be some bullish momentum on the stock price. This is a weird pattern and with the overall market skittishness I will not be pulling the trigger on a new batch right now.

(click to enlarge)

Covidien plc (NYSE:COV)

Covidien is engaged in the development, manufacture and sale of healthcare products for use in clinical and home settings. On 24Jan14, Covidien reported first quarter 2014 earnings of $1.00 per share. This result beat the $0.94 consensus of the 21 analysts covering the company and missed last year's first quarter results by 9.09%. Covidien's PE ratio is below the Medical Equipment & Supplies industry average and signals that investors are not willing to pay a premium for this stock, 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 03Apr14 with a $0.32 per share dividend which will be paid on 05May14 for a yield of 1.77%. 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 57.72, while the MACD chart below shows the black line above the red line with decreasing divergence bars, meaning there may be some bearish momentum on the stock price. Due to the bearish technicals right now I'm not going to be making a purchase in the stock at these levels.

(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 4 quarter results by $1.96. Travelers' PE ratio is among the lowest of any stock in the insurance (prop. & casualty) industry and signals that investors have not been willing to pay a premium for this company's business prospects. 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 was paid on 31Mar14 for a yield of 2.35%. 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 61.38 and upward trajectory, while the MACD chart below shows the black line above the red line with increasing divergence bars, meaning there may be some bullish momentum on the stock price. Due to the bullish technicals right now I'm going to consider making a purchase in the stock at these levels.

(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 stock. 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 was paid on 31Mar14 for a yield of 4.31%. 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 52.27, while the MACD chart below shows the black line above the red line with decreasing divergence bars, meaning there may be some bearish momentum on the stock price. Due to the bearish technicals right now I'm not going to consider making a purchase in the stock at these levels.

(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.

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!

Source: Insure Your Portfolio With Dividends From Travelers And These Other 4 Dividend Value Stocks