Outside of a buyout, an increased dividend payment represents one of the best pieces of news a company’s shareholders could hope for. Generally, an increasing dividend means a steady stream of income and a rising stock price – two good signs for long-term investors. A stock often remains a good buy after announcing a dividend increase. When a company raises its dividend, just as when insiders buy their company’s stock, investors on the outside can get a better gauge on a firm’s future prospects.
Remember, you must buy a stock at least three business days before the record date (at least one business day before the ex-dividend date) to qualify for a dividend.
Cincinnati Financial Corporation (NASDAQ:CINF)
The new higher dividend is payable on October 17, 2011, to shareholders of record as of September 21, 2011.
- Industry: Insurance (Prop. & Casualty)
- Recent Price: $26.26
- 52 Week High: $34.33
- 52 Week Low: $23.65
- Book Value: $31.02
Based on the current price and increased payout of $0.425, the stock has a forward yield of 6.481%. The current trailing twelve months (ttm) P/E ratio is 14.61.
For the same fiscal period year-over-year, revenue has declined to $3.77 billion for 2010 vs. $3.90 billion for 2009. The bottom line has falling earnings year-over-year of $377.00 million for 2010 vs. $432.00 million for 2009. The company's earnings before income and taxes are falling with an EBIT year-over-year of $501.00 million for 2010 vs. $582.00 million for 2009.
Looking at current assets, the stock has a trailing twelve months price to book ratio of 1.03.
At $26.26, the price is currently below the 200 day moving average of 30.84, and below the 60 day moving average of 28.23. In the last month, the stock has decreased in price -3.68 % , in the last quarter, it has returned -5.58%, with a one year change of -0.82%.
Comparing to the S&P 500 price changes, the price performances are 4.39% vs. the S&P 500 from a month ago, -12.17% vs. the S&P 500 from six months ago, and the year to date difference is -12.85% vs. the S&P 500 price change.
I use a proprietary blend of technical analysis, financial crowd behavior, and fundamentals in my short-term trades, and while not totally the same in longer swing trades to investments, the concepts used are similar. Based on my criteria, I have come to the following conclusion: This one is worth the time to investigate further for an ideal entry price to either write put options or buy the stock. Of course that in itself does not mean you should, but you may want to use this article as a starting point of your own research with your financial planner. I use Seeking Alpha, Edgar Online, Google Finance, MSN Money, cnbc.com, Zacks and Yahoo Finance for most of my data.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.