As I have written about previously (read here), we have our core positions that we will continue to track its progress and so far we are doing well. Well enough to where we also have generated a cash reserve to use.
That being said, there is absolutely nothing wrong with seeking out some “fresh blood” so to speak. In this particular article I will offer up for your review 5 stocks that have a low PPS with a dividend. The caveats being the following:
1) They have a Dividend Yield of no less than 3.50%
2) They have a 5 year dividend growth rate averaging no less than 4.0%
3) They have an ESS Rating of “Bullish or Very Bullish
Using this criteria we might be able to squeeze out more income by owning shares in a lower priced stock or two (or 5) perhaps by using a somewhat limited cash reserve. If the companies are rated by Starmine as bullish or better, then we just might have a few more winners for 2012.
5 New Stocks to Consider Now
1) California First National CFNB: Price-$15.90/share, Dividend Yield- 6.94%, ESS Rating- Bullish
2) China Yuchai International CYD: Price- $13.62/share, Dividend Yield- 3.60% ESS Rating- Very Bullish
3) Seagate Technology STX: Price- $15.59/share, Dividend Yield- 4.50%, ESS Rating- Bullish
4) American Greetings AM-OLD: Price- $12.62/share, Dividend Yield- 4.60%, ESS Rating- Bullish
5) Shaw Communications SJR: Price- $19.45/share, Dividend Yield- 4.60%, ESS Rating- Bullish
Why Are We Looking at These Stocks
At first glance, I can tell you that we would not be looking at them for their current trend and performance right now, that’s for sure. Some have very high payout ratios for their dividends, some have high debt, and some have simply underperformed completely. Yet they all have ESS ratings of “bullish”.
The analysts who are now following these companies obviously see something positive for their PPS and entire business GOING FORWARD (which is a huge reason I use Starmine for research opinions).
For example, SJR is in a business that appears to be consolidating and they have put up decent numbers recently. To me it appears they are cleaning up the balance sheet. One might think they could be bought. CFNB has 100 million in cash reserves and only 20 million in debt. AM has suffered supposedly from online greeting sources and iPhone apps, yet they have about an 8% revenue growth year over year to date, and is profitable. They are also selling at the bottom of its 52 week range. CYD is in a business that is growing rapidly and is doing business internationally and a lot in China. How about diesel engine and natural gas engine manufacturing! Sounds compelling all of a sudden right? Also, their dividend payout ratio is only 5%. Finally, STX has had some really positive forward guidance and revenue of late (read this) as well as the business deal between them and Samsung in the hard disk drive business that gives Samsung about 10% ownership of STX in exchange for the HDD business which will be accretive in 2012.
Now they do not look too bad, especially when the actual reason we are considering buying shares in any of these companies is because they offer very good dividends for our retirement portfolio.
Since we have a cash reserve fund from the dividends that have been paid by our core portfolio, as well as the cash we received from selling calls, we have some investable funds to deploy.
It is my opinion that since we have a solid core portfolio as I referenced in my previous article at the start of this one, we can afford to use a percentage of those funds to enhance what we already have.
The stocks I have referred to here are obviously not the only ones out there, nor are they the cheapest or the highest dividend payers. The point is, that there are some unnoticed stocks, thinly traded, that might also be good growth stocks. To me, the essence of a true investor is to find some of these and act on it if they are right for you.
Do your own research prior to any investment decision. This article is an opinion and not a recommendation to buy or sell any stock mentioned.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.