As I plan my portfolio strategy for 2012, one area I am looking at to put new money to work is in dividend stocks with low valuations that have underperformed the S&P in 2011. Here are three I like to outperform the market in the coming year.
4 reasons Hasbro is a solid buy at $32:
1. The stock provides a generous 3.6% dividend yield. It has also raised its dividend an average of 16% annually over the last five years.
2. After underperforming the S&P by over 31% YTD, HAS is selling in the bottom third of its five year valuation based on P/E, P/S, P/B and P/CF.
3. It has a five year projected PEG of less than .9 and is priced under 1 times sales.
4. The median analysts’ price target on HAS is $42, 30% above current price levels. S&P has a $45 price target on Hasbro.
4 reasons why Aflac is a solid long term buy at $43 a share:
1. The stock has underperformed the S&P by 24% YTD. Aflac now sells at the bottom of its five year valuation range based on P/E, P/S and P/CF.
2. AFL yields 3.1% and has grown its dividends by roughly 11% a year over the last half decade.
3. Consensus earnings estimates for 2011 and 2012 have increased over the last 90 days. Aflac is also priced at the dirt cheap level of 6.5 forward earnings.
4. The median analysts’ price target on Aflac is $53.50 and Credit Suisse has an “outperform” rating on the stock.
NYSE Euronext (NYSE:NYX)
4 reasons why NYX has significant value at $26 a share:
1. The company has an A+ rated balance sheet and provides a generous yield of 4.5%.
2. Two insiders bought new shares at higher price levels in August and the stock is price at a very reasonable 9 times forward earnings.
3. NYX is selling near the bottom of its five year valuation range based on P/B, P/S, P/E and P/CF after underperforming the S&P by 12% YTD.
4. The stock is significantly under analysts’ price targets. The median analysts’ price target on NYX is $38 and S&P has a price target of $39 on NYSE Euronext.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in NYX over the next 72 hours.