Do you prefer stocks that pay part of their return in dividend income? For a closer look at dividend stocks of the S&P 500, we ran a screen.
We began by screening the S&P 500 for stocks paying dividend yields above 2% and sustainable payout ratios below 50%.
We then screened for those that may still be undervalued, by comparing price trends to changes in EPS estimates over the last month.
Based on the assumption that P/E is equal to a constant k, increases in EPS should be matched by increases in price. When they don't match up, a mispricing may have occurred.
We screened for stocks with faster growth in EPS estimates than price over the last month, which may indicate that these names are being undervalued.
Interactive Chart: Press Play to compare changes in market cap over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.
Do you think these stocks should be trading higher? Use this list as a starting point for your own analysis.
List sorted by increase in EPS over the last 30 days.
1. The Allstate Corporation (ALL): Engages in the personal property and casualty insurance, life insurance, retirement, and investment products businesses primarily in the United States. Market cap at $17.11B, most recent closing price at $34.83. Dividend yield at 2.53%, payout ratio at 41.38%. The EPS estimate for the company's current year increased from 3.69 to 4.02 over the last 30 days, an increase of 8.94%. This increase came during a time when the stock price changed by 5.59% (from 32.39 to 34.2 over the last 30 days).
2. Robert Half International Inc. (RHI): Provides staffing and risk consulting services in North America, South America, Europe, Asia, and Australia. Market cap at $4.21B, most recent closing price at $29.43. Dividend yield at 2.04%, payout ratio at 48.23%. The EPS estimate for the company's current year increased from 1.35 to 1.47 over the last 30 days, an increase of 8.89%. This increase came during a time when the stock price changed by 1.83% (from 29.04 to 29.57 over the last 30 days).
3. Huntington Bancshares Incorporated (HBAN): Operates as the holding company for The Huntington National Bank that provides commercial and consumer banking services. Market cap at $5.65B, most recent closing price at $6.54. Dividend yield at 2.45%, payout ratio at 20.88%. The EPS estimate for the company's current year increased from 0.59 to 0.64 over the last 30 days, an increase of 8.47%. This increase came during a time when the stock price changed by 2.37% (from 6.34 to 6.49 over the last 30 days).
4. BB&T Corporation (BBT): Operates as the financial holding company for Branch Banking and Trust Company that provides banking and trust services to small and mid-size businesses, public agencies, local governments, and individuals in the United States. Market cap at $22.18B, most recent closing price at $31.75. Dividend yield at 2.52%, payout ratio at 31.97%. The EPS estimate for the company's current year increased from 2.52 to 2.68 over the last 30 days, an increase of 6.35%. This increase came during a time when the stock price changed by 3.07% (from 30.63 to 31.57 over the last 30 days).
5. PACCAR Inc. (PCAR): Designs, manufactures, and distributes light-, medium-, and heavy-duty trucks and related aftermarket parts primarily in the United States and Europe. Market cap at $14.04B, most recent closing price at $39.36. Dividend yield at 2.03%, payout ratio at 41.36%. The EPS estimate for the company's current year increased from 3.35 to 3.54 over the last 30 days, an increase of 5.67%. This increase came during a time when the stock price changed by -7.85% (from 44.58 to 41.08 over the last 30 days).
*EPS data sourced from Yahoo! Finance, all other data sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
