9 Dividend Champions With Bearish Options Sentiment

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 |  Includes: ADM, BDX, FUL, KO, LOW, MDT, SHW, TR, XOM
by: Kapitall

Some investors view the put/call ratio as a contrarian indicator – when it reaches extreme levels, it may indicate that a turnaround is imminent.

We ran a screen on “dividend champions,” companies that have consistently raised their dividend yield for the past 25 years. We screened these companies for those that have seen significant increases in the put/call ratio over the last ten trading days, a bearish change.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.

We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 (NYSEARCA:SPY) index over the last month.

(Click chart for more detail)

Do you think options traders are being extremely bearish on these names? Use this list as a starting-off point for your own analysis.

List sorted by increase in put/call ratio.

1. Lowe's Companies Inc. (NYSE:LOW): Home Improvement Stores Industry. Market cap of $29.24B. Dividend yield at 2.49%, payout ratio at 30.72%. Put/call ratio has increased 194.59% over the last ten trading days (from 0.37 to 1.09). The stock has gained 10.69% over the last year.

2. The Sherwin-Williams Company (NYSE:SHW): Specialty Retail Industry. Market cap of $8.27B. Dividend yield at 1.88%, payout ratio at 31.51%. Put/call ratio has increased 71.72% over the last ten trading days (from 0.99 to 1.7). The stock is a short squeeze candidate, with a short float at 6.63% (equivalent to 5.27 days of average volume). It's been a rough couple of days for the stock, losing 8.48% over the last week.

3. HB Fuller Co. (NYSE:FUL): Specialty Chemicals Industry. Market cap of $1.14B. Dividend yield at 1.30%, payout ratio at 17.46%. Put/call ratio has increased 57.14% over the last ten trading days (from 0.28 to 0.44). The stock has gained 13.51% over the last year.

4. Becton, Dickinson and Company (NYSE:BDX): Medical Instruments & Supplies Industry. Market cap of $18.26B. Dividend yield at 1.96%, payout ratio at 28.97%. Put/call ratio has increased 49.41% over the last ten trading days (from 0.85 to 1.27). The stock has gained 24.69% over the last year.

5. Exxon Mobil Corporation (NYSE:XOM): Major Integrated Oil & Gas Industry. Market cap of $410.39B. Dividend yield at 2.26%, payout ratio at 24.99%. Put/call ratio has increased 31.76% over the last ten trading days (from 0.85 to 1.12). The stock has gained 40.13% over the last year.

6. Tootsie Roll Industries Inc. (NYSE:TR): Confectioners Industry. Market cap of $1.61B. Dividend yield at 1.13%, payout ratio at 34.46%. Put/call ratio has increased 25.84% over the last ten trading days (from 2.67 to 3.36). The stock is a short squeeze candidate, with a short float at 11.38% (equivalent to 27.75 days of average volume). The stock has gained 11.54% over the last year.

7. Medtronic, Inc. (NYSE:MDT): Medical Appliances & Equipment Industry. Market cap of $38.07B. Dividend yield at 2.70%, payout ratio at 31.20%. Put/call ratio has increased 16.67% over the last ten trading days (from 0.78 to 0.91). The stock has gained 0.93% over the last year.

8. The Coca-Cola Company (NYSE:KO): Beverages Industry. Market cap of $157.25B. Dividend yield at 2.74%, payout ratio at 33.38%. Put/call ratio has increased 15.15% over the last ten trading days (from 0.99 to 1.14). The stock has gained 28.83% over the last year.

9. Archer Daniels Midland Company (NYSE:ADM): Farm Products Industry. Market cap of $19.78B. Dividend yield at 2.06%, payout ratio at 18.51%. Put/call ratio has increased 9.33% over the last ten trading days (from 0.75 to 0.82). The stock has gained 14.3% over the last year.

*Dividend champions sourced from DRiP Investing, options data sourced from Schaeffer’s, all other data sourced from Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.