Finding stable companies with histories of increasing dividends is just the first part of a sound investment strategy. Next, and just as important, is buying those companies at bargain prices. There are many ways to find such deals, but one of the quickest is to check a company's current price and its 52-week low. If it's trading at or near this number, it *may* be undervalued.
I say "may" because a company trading at or near its 52-week low is not necessarily a good buy. Our job as diligent investors is to determine whether these price movements are the result of short term fear (good) or deeper financial issues (bad). But when looking at what can quickly become an overwhelming list of stocks, finding those trading at or near their 52-week lows can be a quick and dirty way of narrowing down your choices.
With that said, here is a list of five companies with long histories of dividend increases that are trading within 5% of their 52-week lows:
Harleysville Group Inc. (HGIC) is an insurance holding company that, through its subsidiaries, engages in the property and casualty insurance business on a regional basis. The company’s insurance coverages are marketed primarily in the eastern and Midwest United States through approximately 1,300 insurance agencies. The company has increased dividends for 24 consecutive years, and has a 10-year dividend CAGR of 9.9%, discounting the $1.40 special dividend paid in 2010. At the current rate and price, the stock yields 4.6%.
- Current Price - $31.58
- 52-Week Low - $30.31
- Difference - 4.19%
Hudson City Bancorp (HCBK) is a community and consumer-oriented retail savings bank offering traditional deposit products, residential real estate mortgage loans and consumer loans. Hudson City, the largest savings bank headquartered in New Jersey, also serves customers throughout the surrounding metropolitan area with branches located in Fairfield, Westchester, Putnam and Rockland counties, as well as in Long Island and the New Jersey suburbs of Philadelphia. The stock has increased dividends for 12 years, and has a 10-year dividend CAGR of 26.7%. At the current price and rate, the stocks yields 6.1%.
- Current Price - $9.81
- 52-Week Low - $9.51
- Difference - 3.15%
Mercury General Corporation (MCY) is engaged in writing automobile insurance in a number of states, principally California. It also writes homeowners, mechanical breakdown, fire, umbrella and commercial automobile and property insurance. The company sells its policies through approximately 5,100 independent agents and brokers throughout the U.S. The company has increased dividends for 24 consecutive years, and has a 10-year dividend CAGR of 9.2%. At the current price and rate, the stock yields 6.4%.
- Current Price - $37.66
- 52-Week Low - $37.29
- Difference - 1%
People's United Financial, Inc. (PBCT) is the largest regional banking organization headquartered in New England. The principal business of People’s United Financial is to provide, through People’s United Bank and its subsidiaries, commercial banking, retail and small business banking, and wealth management services to individual, corporate and municipal customers. The company has increased dividends for 17 consecutive years, and has a 10-year dividend CAGR of 9.3%. At the current price and rate, the stock yields 5%.
- Current Price - $12.31
- 52 week low - $12.17
- Difference - 1.15%
WestAmerica Bancorp (WABC) is a holding company for WestAmerica Bank and provides a range of banking services to individual and corporate customers in Northern and Central California. The company has over 90 branches, and is the seventh largest commercial bank headquartered in California. They have increased their dividend for 19 consecutive years, and have a 10-year dividend CAGR of 6.4%. At the current price and rate, the stock yields 2.9%.
- Current Price - $49.75
- 52-Week Low - $48.70
- Difference - 2.09%