As I discussed in my recent article here, there are many factors I screen for prior to making a stock purchase. One strong factor I look for is insider purchases as those are not only the people with the best view of the company's upcoming business prospects, but also nice when they have their financial interests aligned with us investors. Moreover, I like stocks that pay dividends as that further shows that the management rewards investors appropriately. Here are some dividend stocks experiencing recent insider investment:
1) H&R Block (HRB) is a company I wrote about recently here. On September 6, CFO Jeff Brown bought 5,000 shares on the open market and since then there was an additional 10,000 share buy on September 14 by CEO William Cobb and another 2,000 shares bought on September 16 by CFO Brown (full information here). These share purchases are encouraging for this stock yielding almost 4.5%. I'm sticking by my $12/share entry point as discussed in the article as I don't see any reason to rush into this stock at the moment during this seasonally slow quarter.
2) Titanium Metal (TIE) produces and sells titanium melted and mill products. The stock has been beaten down as its business is tied heavily to the economy, which of course has been struggling. The Chairman, Harold Simmons bought 21,000 shares on September 20 on top of the 10,000 shares he bought on September 16, and massive 600,000 shares he bought on August 8 (full information here). Other insiders have been accumulating shares heavily on the open market as well. I don't quite see this stock being too cheap trading, as it's at over 27x price/earnings, almost 3x price/sales, and 2.2x price/book. The Company has a respectable 1.8% dividend yield and very clean balance sheet with no debt and over $1/share in cash, so the dividend looks not only safe, but likely raised as its payout ratio is under 15%. I can't give this stock a buy at these lofty valuations though, but the insider purchasing is very encouraging and I may very well be wrong as the insiders may have some new catalyst soon ahead of these purchases.
3) Kronos Worldwide (KRO) engages in the production and marketing of titanium dioxide pigments in North America and Europe. The company has been seeing some nice insider buying by none other than Chairman Simmons again with a 35,000 share purchase of his on September 14 and another 15,000 share purchase on September 16 (full information here). This company looks much cheaper trading under 10x price/earnings and 1.3x price/sales. Moreover, the company has a significantly higher dividend yield at 3%. Moreover, with the payout ratio under 50%, it's safe to assume the dividend will continue to be raised. I think this is a buy here at $19.25/share.
4) NL Industries, Inc. (NL), through its subsidiary, CompX International Inc., operates in the component products industry in the United States, Canada, and Taiwan. Chairman, CEO, and President Harold Simmons is purchasing shares in this company as well. He bought 855 shares on September 6, but then purchased 5,000 shares more on September 9, and another 15,000 shares on September 19 (full information here). The company looks cheap at under 6x price/earnings with a 4.0% dividend yield, but it's also trading at 4.5x price/sales and 1.7x price/book which is not cheap at all. However, with the consistent dividend, which I put at a premium in this very low-rate environment, I think it's a safe buy here at $12.50/share. I wrote about other dividend stocks recently in the telecommunications sector here.
5) PG&E Corporation (PCG), through its subsidiaries, operates as a public utility company in northern and central California. Chairman, CEO, and President Anthony Earley made a big 36,600 share purchase amounting to almost $1.5 million on September 14 (full information here). The stock looks fairly priced at 16x price/earnings, 1.2x price/sales, and 1.5x price/book. However, the company has a very nice 4.3% dividend yield that has consistently been raised by management over the years. I wouldn't be in a rush to buy this company, but think that if this company comes down to a 4.5% yield translating to a $40.50/share price, that is a strong entry point.
6) Sara Lee Corporation (SLE) engages in the manufacture and marketing of a range of branded packaged meat, bakery, and beverage products worldwide. The presiding director of the board, James Crown, made a sizeable purchase of 37,500 shares on September 12 (full information here). The stock looks compelling trading at 8.5x price/earnings, less than 1.2x price/sales, and a nice 2.7% dividend yield. I think this company is a nice buy at $17.25/share. You can find other food-related dividend paying stocks in my recent article here.
7) Hess Corporation (HES) and its subsidiaries operate as an integrated energy company. It operates in two segments, Exploration and Production (E&P) and Marketing and Refining (M&R). Chairman and CEO John Hess made a big purchase of 174,950 shares amounting to just over $10 million on the open market on September 12 (full information here). The company looks cheap at just over 8x price/earnings, .5x price/sales, and 1x price/book. The company has a small yield however, of just .7%, but has been very consistent for years. With a payout ratio under 10%, one has to think that will be raised soon. I think it's a solid buy at $57/share matching John's buy price.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in NL, HRB over the next 72 hours.