Although Monday has seen a massive rally for all markets and sectors, the stocks have have hammered enough for a long time in most of the Europe and the world. Things are way too hopeless for Greece. Even the Greek cadets are raising their voices, singing the anthem of the “Regime of Colonels” that ruled the country from 1967 to 1974, giving the first signals of a possible coup d’etat in the country.
The main thing to do in such an all-bear situation is to head to the safe havens, which are mostly stable dividend payers, in my opinion. If you find some dividend payers that hammered enough lately, you might even make profits in this despairing situation, as well. I have found five dividend stocks that are offering a reverse bungee to investors.
Moreover, these stocks are priced with low P/E ratios at satisfying rates. Here is a brief analysis of 5 dividend stocks that are hammered enough recently. I have analyzed these stocks from a fundamental perspective, adding my O-Metrix score where applicable.
Data obtained from Finviz/Morningstar and current as of November 25. You can download O-Metrix calculator here.
Ares Capital Corp. (ARCC)
Ares Capital has recently unveiled its latest quarterly results. The company has a P/E ratio of 8.1, and a forward P/E ratio of 9.2, as of November 25. Analysts estimate an annualized EPS growth of 8.0% for the next five years. With a profit margin of 59.3%, and a dividend yield of 10.11%, Ares is a stunning stock for dividend lovers.
Insider transactions have increased by 137.47% within the last six months, while institutions hold 53.60% of the shares. O-Metrix score is 10.48, and earnings increased by 96.45% this year. Gross margin and operating margin are 69.0% and 43.5%, respectively. Target price implies a 23.2% upside potential, whereas it is trading 16.19% lower than its 52-week high. In June 2009, Ares Capital has cut its dividend from 42¢ to 35¢, and it kept going ex-dividend since then.
\However, the company announced that it will yield a $0.36 dividend this quarter. This is a convincing sign of a healthy recovery in the company. Debt-to equity ratio (0.6) is also impressive, way below the industry average of 1.8. The company missed the revenue estimates this quarter, so there have been some sell-offs recently. However, I insist counting on this stock.
Avon Products (AVP)
Avon will trade ex-dividend on December. It shows a single-digit P/E ratio of 9.4, and a lower forward P/E ratio of 8.6, as of the Friday close. Estimated annual EPS growth is 11.0% for the next five years. It boasts a juicy dividend of 5.72%, while the profit margin is 6.5%.
The company is currently trading 47.47% lower than its 52-week high, whereas it has an O-Metrix score of 9.28. Insider transactions have increased by 53.42% in the last six months, and institutions hold 85.30% of the shares. Gross margin is 63.4%, while ROE is 44.54%. PEG value is 0.8.
Moreover, it has a four-star rating from Morningstar. Avon has hit its 52-week low, as it is suffering from panic sell-offs at a grand scale. The company might have missed expectations this quarter, but it still has intense upside potential. I see no downside potential left for this company, so it is time to jump in.
Avery Dennison Corp. (AVY)
Eric M. Leeds of Avery Dennison will present on December 7 at the Bank of America Merrill Lynch Industrials Conference. The California-based Avery, as of November 25, was trading at a P/E ratio of 9.2, and a forward P/E ratio of 8.9. Five-year annual EPS growth forecast is 7.0%. Although profit margin (4.2%) is below the industry average of 8.8%, it sports an attractive dividend of 4.12%.
Avery has an O-Metrix score of 6.14, while it is currently trading 41.69% lower than its 52-week high. Institutions own 88.55% of the stock, and it has a five-star rating from Morningstar. Debt-to equity ratio is 0.6, slightly better than the industry average of 0.7. Insider transactions have increased by 88.97% within the last six months, whereas earnings increased by 141.17% this year.
Avery has cut its quarterly dividend from $0.41 to $0.20 per share in August 2009. Since February 2011, the company has increased its dividend to $0.25, giving a 25% raise. This is a gorgeous bump rate for a dividend investor, plus the stock is a terrific bargain currently.
H&R Block, Inc. (HRB)
H&R Block is halting its plan to acquire TaxACT after antitrust opposition. As of Friday’s close, it has a P/E ratio of 11.8, and a forward P/E ratio of 8.2. Analysts expect the company to have an 11.0% annualized EPS growth in the next five years. Profit margin (9.6%) is higher than the industry average of 6.7%, while it pays a 4.16% dividend.
Institutions hold 88.22% of the shares, whereas insider transactions for the last six months have increased by 73.38%. The stock is trading 16.33% lower than its 52-week high, and it has an O-Metrix score of 7.58. ROE is 32.02%, and PEG value is 0.7. Debt-to equity ratio is 0.8, way lower than the industry average of 2.1.
Oppenheimer recently upgraded its take on H&R Block, as well as Standpoint Research. With a 0.66 Beta value, H&R Block is one of the least volatile companies in its sector. Insiders have been buying stocks for a while. However; cash flow is extremely unstable, as well as revenue and assets. H&R Block is a great buy as long as you remember that it is a speculative play.
Whirlpool Corp. (WHR)
Whirlpool celebrated its official 100th anniversary recently. The Michigan-based company shows a trailing P/E ratio of 10.1, and a forward P/E ratio of 7.4, as of November 25. Five-year annualized EPS growth forecast is 15.0%. Profit margin (1.9%) is lower than the industry average of 2.4%, and shareholders enjoyed a 4.34% dividend last year.
Whirlpool is trading 46.84% lower than its 52-week high, whereas insider transactions have increased by 93.04% within the last six months. O-Metrix score is 11.58, and institutions hold 98.40% of the stock. PEG value is 0.5. Earnings increased by 122.90% this quarter, and 83.86% this year.
Whirlpool bumped its dividend in May 2011, increasing it from $0.43 quarterly to $0.50 a share. Debts are far from being a threat. Whirpool is the best in terms of free cash flow in its industry. Since August 24, insiders keep buying shares. This is a strong signal for investors. There seems to be no downside potential left for this company.