Seeking Alpha
Value, growth, long-term horizon, medium-term horizon
Profile| Send Message|
( followers)  

If a company’s P/E ratio has fallen over time, as its earnings steadily rise, it is a sign that price has not proportionately increased with earnings. In other words, the company’s earnings may not be fully priced into the stock, and the stock may be undervalued.

We ran a screen on stocks paying dividend yields above 3% for those exhibiting these trends: a falling P/E ratio (comparing the trailing-twelve-month ratio to the 3-year average) and rising EPS over the same time period.

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 index over the last month. To access a complete analysis of this list's recent performance, click here.

Do you think the market is undervaluing these names? Use this list as a starting-off point for your own analysis.

List sorted by dividend yield.

1. Eli Lilly & Co. (NYSE:LLY): Develops, manufactures, and sells pharmaceutical products worldwide. Market cap of $42.19B. Dividend yield at 5.39%, payout ratio at 47.38%. TTM P/E at 8.56 vs. 3-year average at 16.45. Last year diluted EPS at $4.58 vs. 2-year prior EPS at -$1.89. The stock has gained 11.03% over the last year.

2. Canadian Imperial Bank of Commerce (NYSE:CM): Provides various financial products, services, and advice to individual, small business, commercial, corporate, and institutional clients in Canada and internationally. Market cap of $31.83B. Dividend yield at 4.63%, payout ratio at 45.95%. TTM P/E at 11.45 vs. 3-year average at 20.47. Last year diluted EPS at $6.74 vs. 2-year prior EPS at -$7.76. The stock has had a couple of great days, gaining 6.4% over the last week.

3. Strayer Education Inc. (NASDAQ:STRA): Provides various academic programs through traditional classrooms and Internet. Market cap of $1.08B. Dividend yield at 4.45%, payout ratio at 40.51%. TTM P/E at 9.22 vs. 3-year average at 24.27. Last year diluted EPS at $9.70 vs. 2-year prior EPS at $5.67. The stock is a short squeeze candidate, with a short float at 22.15% (equivalent to 8.74 days of average volume). The stock is currently stuck in a downtrend, trading 7.74% below its SMA20, 23.92% below its SMA50, and 30.21% below its SMA200.

4. Meredith Corp. (NYSE:MDP): Engages in magazine publishing and related brand licensing, television broadcasting, integrated marketing, interactive media, and video production businesses in the United States. Market cap of $1.09B. Dividend yield at 4.29%, payout ratio at 34.74%. TTM P/E at 8.30 vs. 3-year average at 31.38. Last year diluted EPS at $2.87 vs. 2-year prior EPS at -$2.28. The stock is a short squeeze candidate, with a short float at 23.83% (equivalent to 12.22 days of average volume).

5. Ennis Inc. (NYSE:EBF): Engages in the production and sale of business forms, other business products, and apparel. Market cap of $388.41M. Dividend yield at 4.17%, payout ratio at 35.19%. TTM P/E at 8.98 vs. 3-year average at 23.52. Last year diluted EPS at $1.72 vs. 2-year prior EPS at -$1.27. The stock has lost 3.81% over the last year.

6. Molex Inc. (NASDAQ:MOLX): Manufactures and sells electronic components worldwide. Market cap of $3.55B. Dividend yield at 3.97%, payout ratio at 45.36%. TTM P/E at 11.91 vs. 3-year average at 619.60. Last year diluted EPS at $1.70 vs. 2-year prior EPS at -$1.84. The stock is a short squeeze candidate, with a short float at 5.75% (equivalent to 6.45 days of average volume). The stock has gained 7.89% over the last year.

7. Northrop Grumman Corporation (NYSE:NOC): Provides products, services, and solutions in aerospace, electronics, information systems, shipbuilding, and technical service sectors. Market cap of $14.40B. Dividend yield at 3.87%, payout ratio at 26.73%. TTM P/E at 8.11 vs. 3-year average at 19.72. Last year diluted EPS at $6.77 vs. 2-year prior EPS at -$3.83. The stock has gained 1.97% over the last year.

8. Maxim Integrated Products Inc. (NASDAQ:MXIM): Designs, develops, manufactures, and markets a range of linear and mixed-signal integrated circuits worldwide. Market cap of $6.49B. Dividend yield at 3.82%, payout ratio at 49.46%. TTM P/E at 13.67 vs. 3-year average at 32.37. Last year diluted EPS at $1.61 vs. 2-year prior EPS at $0.03. Might be undervalued at current levels, with a PEG ratio at 0.79, and P/FCF ratio at 14.86. The stock has gained 34.82% over the last year.

9. Republic Bancorp Inc. (NASDAQ:RBCAA): Operates as the holding company for Republic Bank & Trust Company and Republic Bank, which provides banking, tax refund solutions, and mortgage banking services to individuals and businesses in the United States. Market cap of $355.10M. Dividend yield at 3.64%, payout ratio at 36.85%. TTM P/E at 3.88 vs. 3-year average at 8.33. Last year diluted EPS at $3.09 vs. 2-year prior EPS at $1.62. The stock is a short squeeze candidate, with a short float at 6.93% (equivalent to 14.52 days of average volume). The stock has lost 10.55% over the last year.

10. Kansas City Life Insurance Company (NASDAQ:KCLI): Operates as a financial services company that primarily focuses on the sale and administration of life and annuity insurance products in the United States. Market cap of $349.26M. Dividend yield at 3.56%, payout ratio at 27.70%. TTM P/E at 12.82 vs. 3-year average at 61.66. Last year diluted EPS at $1.94 vs. 2-year prior EPS at -$1.47. The stock has lost 2.15% over the last year.

11. Linear Technology Corp. (NASDAQ:LLTC): Designs, manufactures, and markets a line of linear integrated circuits. Market cap of $6.26B. Dividend yield at 3.51%, payout ratio at 34.52%. TTM P/E at 11.00 vs. 3-year average at 17.21. Last year diluted EPS at $2.50 vs. 2-year prior EPS at $1.41. The stock has lost 8.13% over the last year.

12. Quaker Chemical Corporation (NYSE:KWR): Develops, produces, and markets formulated chemical specialty products for various heavy industrial and manufacturing applications. Market cap of $386.27M. Dividend yield at 3.13%, payout ratio at 31.89%. TTM P/E at 10.62 vs. 3-year average at 14.36. Last year diluted EPS at $2.77 vs. 2-year prior EPS at $1.05. This is a risky stock that is significantly more volatile than the overall market (beta = 2.57). The stock is currently stuck in a downtrend, trading 5.77% below its SMA20, 21.56% below its SMA50, and 25.4% below its SMA200.

13. Marsh & McLennan Companies, Inc. (NYSE:MMC): Provides advice and solutions in the areas of risk, strategy, and human capital. Market cap of $15.70B. Dividend yield at 3.04%, payout ratio at 42.96%. TTM P/E at 17.79 vs. 3-year average at 32.25. Last year diluted EPS at $1.00 vs. 2-year prior EPS at -$0.13. The stock has gained 21.6% over the last year.

14. PNC Financial Services Group Inc. (NYSE:PNC): Operates as a diversified financial services company. Market cap of $24.33B. Dividend yield at 3.04%, payout ratio at 20.61%. TTM P/E at 7.44 vs. 3-year average at 14.14. Last year diluted EPS at $5.04 vs. 2-year prior EPS at $2.46. The stock has lost 14.55% over the last year.

*Dividend, P/E, and EPS data sourced from Screener.co, all other data sourced from Finviz.

Source: 14 High Dividend Yield Stocks With Falling P/E, Rising Earnings