This is the time of year that we can take a step back from our "Retirement Strategy Portfolio" (read this) and try to find some small "gems" that we can deploy some of our cash reserves into.
Fresh "blood" is the lifeline that keeps us alert, balanced, and "in the game" looking for those less expensive shares that could be a stand out. Of course, for our purposes, they also must have a dividend so we can get paid to wait for them to actually stand out.
I have 4 stocks that might fit in nicely to our core holdings for retirement and each of them are under $15.00/share.
Here Is My Criteria:
1) Under $15.00/share
2) Dividend yield of 3.50% or greater
3) An ESS rating of "Bullish" or better
4) Dividend payout ratios under 50%
A few have flown under the radar, and there is even a brand name or two.
Value Line (VALU): Price: $10.30/share, Dividend Yield: 7.67%, ESS Rating: Bullish
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VALU offers investment related materials for a fee. They recently revamped their website to be more user friendly, and they offer subscriptions to periodicals for a wide range of copyrighted investment strategies and opinions. Since the market has been recovering and folks feel better about the stock market, they could seek out companies such as this to gain more insight for their own needs.
They recently settled a derivative class action lawsuit which clears that "overhang" from their outlook as well. Their balance sheet appears pretty clean with no debt, cash on hand, and a steady cash flow. VALU has a dividend payout ratio of only 21%, profit margins of over 95% (wow) and if they continue getting their business model in order, this could be a "gem".
American Greetings (AM): Price: $14.20/share, Dividend Yield: 4.30%, ESS Rating: Bullish
AM has a wonderful brand name and is surviving the online greeting onslaught with its own business model and strategy. Their revenue and gross profits increased significantly quarter over quarter and they have a dividend payout ratio of only 30%.
As their business continues to mend and improve, they have also announced a share buy back plan (read here) further enhancing shareholder value.
Deer Consumer Products (OTC:DEER): Price: $5.10/share, Dividend Yield: 3.96%, ESS Rating: Bullish
DEER is trading towards its lower end PPS range and its 52 week high of $11.50 might seem a distant memory, however they have been waging a battle against illegal short sellers (read this), have a very good case, and when this is cleared up, the PPS could show significant improvement.
DEER designs, manufactures and sells small kitchen appliances, have nearly 30 million in cash and ZERO debt. They also have a miniscule dividend payout ratio of 14% that can be sustained while we wait for the PPS to rebound.
Universal Insurance Holdings (UVE): Price: $3.89/share, Dividend Yield *8.20%, ESS Rating: Bullish
(*UVE has a regular dividend rate of 3.75% however they issued a special year end dividend of $.14/share on 12/25/2011 which skews the yield and cannot be counted on as a regular payout)
UVE operates as an insurance company primarily in homeowners policies. They have total cash that far exceeds their total debt and have a dividend payout ratio of 42%.
A much needed rate increase for UVE was approved (read here) for key Florida homeowner policies which will enhance margins going forward. They have been trading relatively flat for more than 3 years now, reaching $9.11/share back in late 2008, so there appears to be upside potential as their business expands and margins improve.
At the end of this month we will review our "Retirement Strategy Portfolio" and see that we have some very positive gains as well as a nice amount of cash reserves on hand.
While the stocks I have mentioned here are far from the usual blue chips that we own, they are worthy of our attention and research to see if any or all of them could fit into our retirement portfolio. The stocks are not "cheap", but they are "low priced" with very nice dividend yields for us to consider.
Let me know what your thoughts are, as I am about to take a few positions myself.