Here are analyses for 5 dividend stocks that are known as low risk and could also be really profitable in the long run with the right setups.
First Niagara Financial Group Inc. (NASDAQ:FNFG)
First Niagara Financial has a market capitalization of $3.09 billion. This stock is pretty interesting. It has been paying steady dividends to investors even during this financial crisis. The dividend yield was $0.64 (6.00%) during the ex-dividend date on 05th-August-2011. It has been paying dividend yields of 3.90% on average over the past 5 years. This bank has also been paying out at a high ratio of 85.00%. Moreover, this stock is still unrecognized by most traders. It has a price/book ratio of only 0.77 and a price/earnings ratio of 15.82. Not only is the dividend attractive but it has been generating an operational margin of 41.82% with a return on equity of 4.43%. The revenue growth of the company was also upgraded by 44.40% last year.
On the other hand, M&T Bank Corporation (NYSE:MTB) has been paying a dividend yield of $2.80 (3.60%). This was lower than the First Niagara Financial Group. Although its operating margin was as high as 43.71% with a higher return on equity of 10.67%. Another difference is that M&T Bank has already been overbought as shown by its price-book ratio of 1.13 and price/earnings of 10.64.
Shares of First Niagara Financial Group Inc. (FNFG) might considered as undervalued for now. It has been paying high dividend yields steadily to shareholders with a high payout ratio and good stability. This signals a buy for this stock.
H&R Block, Inc. (NYSE:HRB)
H&R Block (HRB) has a market cap of $4.60 billion. It has traded at $15.18 per share with a 52-week range of $10.13 - $18.00. It has been paying a dividend yield of $0.60 (4.00%) with a payout ratio of 46.00% steadily. Its operating margin was 17.84% while the return on the equity was 29.02%. The earnings per share was $1.31 with a price-earnings ratio of 11.61 times.
Intuit (NASDAQ:INTU) has been offering lower dividend yields at $0.60 (1.20%) per share. It has a price/earnings of 24.29 times and it has generated earnings of $2 per share.
As a result, H&R Block is paying a higher dividend than the Intuit. H&R Block is also trading at a cheaper price than the Intuit. For dividend investors, this indicates a buy.
Cablevision Systems Corporation (NYSE:CVC)
Cablevision Systems Corporation (CVC) has a market cap of $5.08 billion. It has been trading within a 52-week range from $16.02 - $38.08 with a current price of $17.84 per share. It has increased its net profit over the quarter, but a weak U.S. economy has lowered its number of subscriptions and pushed the price down to a new low since Aug/9/2011. It has been paying a dividend yield of $0.60 (3.30%) per share with a payout rate of 37.00%. Its operating margin was 20.48% with a return on assets of 13.18%. It has generated $1.43 per share for the earnings with a price/earnings of 12.52 times. The earnings have increased by 44.30% and the revenue has increased by 9.10% this year.
Conversely, DIRECTV (NASDAQ:DTV) has not been paying any dividends. However, the overall performance of the company has also been on the positive side. It has generated 16.72% in operating margin and 701.64% for the return on the equity. This company has a current price-earnings of 14.30 times which is higher than the Cablevision Systems. Both of its earnings and revenue has also been increased this year. Its earnings have increased by 29.10% and the revenue has increased by 12.90%.
In summary, Cablevision Systems share is trading at a cheaper price while offering high dividends for even more profit potential. Its momentum also seems to be at its low as well.
Invesco Ltd. (NYSE:IVZ)
Invesco is a publicly owned investment manager. The firm primarily provides services to individuals, typically high net worth individuals. It has a market cap of $8.16 billion. It has been trading in a 52-week range from $16.37 - $29.95 with current price at $18.09 per share. It has adividend yield of $0.49 (2.70%) with a high payout rate of 31.00%. It has generated $1.47 per share in the earnings with price/earnings of 12.32. It has not only been generating good profits, it has also shown great development as well. It has increased its earnings by 348.50% and its revenue by 35.90% this year.
At the same time, a financial holding company such Morgan Stanley (NYSE:MS) is suffering with a debt of $453.08 billion. It has also been paying out dividends of 1.10%, but the price/earnings of this company is stagnant at 63.89 times. Its earnings have been downgraded by -39.10% this year.
Invesco has produced significant growth for earnings and it has been paying a great amount of dividends. The stock price is now near its 52-week low as well. Holding this stock might give an investor a big rally ride in the future.
PDL BioPharma, Inc. (NASDAQ:PDLI)
PDL BioPharma, Inc. (PDLI) has a market capital of $820.59 million. It has been trading in a 52-week range of $4.66 - $6.70 and is currently trading at $5.89 per share. It has paid a dividend of 13.60% trailing from twelve. The payout ratio has been as high as 108.00%. Its next dividend payout rate will be $0.60 (9.80%) with the ex-dividend release date on Dec/06/2011. The earnings per share was $0.74. Surprisingly, its current price/earnings is only 7.85 times while the performance of this company is astonishing. According to its statement, it has a profit margin of 35.39% and an operating margin of 91.11%. The return on assets was 75.41%. In addition, it has upgraded earnings by 39.60% and increased revenue by 1.50% this year.
Unlike XOMA Ltd. (NASDAQ:XOMA), which has suffered decreased demand. This company pays no dividends and its current net income is at an average of -$45.86 million yearly. Its profit margin is -87.15% with return on equity of -290.10% and return on the assets of -49.61%. The company seems to be selling off their assets to increase its equity.
The result indicates that buying a stock like PDL BioPharma, Inc. (PDLI) could be a valuable choice, but at the same time, buying a stock like XOMA Ltd. (XOMA) may possibly be a bad choice.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.