Seeking Alpha
What is your profession? ×
Profile| Send Message|
( followers)

Are you a dividend investor that values not only decent yields but sustainable payout ratios? Do you prefer companies that could grow over the long term, bringing their yields up as well? Today we focused on companies with these traits, but that also look undervalued according to their fundamentals. We came up with an interesting and diverse list - tell us what you think.

EPS growth (earnings per share growth) illustrates the growth of earnings per share over time. The 1-Year Expected EPS Growth Rate is an annual growth estimate, where the growth projections are made by analysts, the company or other credible sources.

The Price/Sales ratio is a price-multiple valuation metric used to help identify if a firm is cheap by its twelve month trailing sales numbers. In the most basic terms it let's an investor know how much the investment community is willing to pay for every dollars worth of sales. A firm with a P/S ratio of one or lower would be viewed as cheap because investors are paying $1 or less for every dollars worth of a firm's sales. On the other hand, a firm is generally considered to be expensive when the P/S ratio is above three. These are general guidelines used by the investment community not hard rules to be clear. Price/Sales Ratio = Current Stock Price/Revenue (sales) per Share

The forward P/E is a price multiple valuation metric, which is similar to the current P/E ratio, except that it uses the forecasted earnings instead. While this number might not be as accurate because it uses "forecasted" numbers, it does offer the benefit of illustrating analysts' expectations of a firm. If the market believes that earnings will grow moving forward, then the forward P/E should be lower than the current P/E. Financial Leverage, also known as the Equity Multiplier, illustrates how a firm is financing its assets. The lower the number the more a firm is financing its assets internally through stockholder equity. The higher this metric is the more the firm is relying on debt to finance its assets.

We first looked for dividend stocks. We then looked for companies with projected high growth, measured by 1-year projected EPS growth above 25%. We then looked for businesses that are trading at a discount (P/S<1)(forward P/E<10). We did not screen out any market caps or sectors.

Do you think these stocks have more value to price in? Use our list along with your own analysis.

1) The Dow Chemical Company (NYSE:DOW)

Market Cap:$37.85B

The Dow Chemical Company has a Dividend Yield of 4.04%, a Payout Ratio of 53.49%, a 1-Year Projected Earnings Per Share Growth Rate of 29.69%, a Price/Sales Ratio of 0.63, and a Forward Price/Earnings Ratio of 9.54. The short interest was 1.61% as of 06/14/2012. The Dow Chemical Company manufactures and supplies chemical products used as raw materials in the manufacture of customer products and services worldwide. Its Electronic and Functional Materials segment offers materials for chemical mechanical planarization, chemical processing aids and intermediates, electronic displays, food and pharmaceutical processing and ingredients, home and personal care ingredients, hygiene and infection control, photolithography, printed circuit boards, process and materials preservation, semiconductor packaging, and electronic and industrial finishing. The company's Coatings and Infrastructure Solutions segment provides construction chemical solutions and building-integrated photovoltaics; raw materials for architectural paints and industrial coatings; technologies for water purification, desalination, and separation solutions; and specialty monomer products.

2) Big 5 Sporting Goods Corp. (NASDAQ:BGFV)

Industry:Sporting Goods Stores
Market Cap:$134.82M

Big 5 Sporting Goods Corp. has a Dividend Yield of 4.85%, a Payout Ratio of 72.54%, a 1-Year Projected Earnings Per Share Growth Rate of 28.07%, a Price/Sales Ratio of 0.15, and a Forward Price/Earnings Ratio of 8.48. The short interest was 3.24% as of 06/14/2012. Big 5 Sporting Goods Corporation, together with its subsidiaries, operates as a sporting goods retailer in the western United States. The company offers athletic shoes, apparel, and accessories, as well as a selection of outdoor and athletic equipment for team sports, fitness, camping, hunting, fishing, tennis, golf, snowboarding, and roller sports. It also provides various private label merchandise, including shoes, apparel, binoculars, camping equipment, fishing supplies, and snow sport equipment. The company sells private label merchandise under its owned labels comprising Court Casuals, Golden Bear, Harsh, Pacifica, Rugged Exposure, and Triple Nickel; and licensed trademarks, including Avet, Body Glove, Fila, GoFit, Hi-Tec, Maui & Sons, Morrow, and Realm and The Realm.

3) International Paper Co. (NYSE:IP)

Sector:Consumer Goods
Industry:Paper & Paper Products
Market Cap:$12.51B

International Paper Co. has a Dividend Yield of 3.67%, a Payout Ratio of 38.47%, a 1-Year Projected Earnings Per Share Growth Rate of 30.45%, a Price/Sales Ratio of 0.48, and a Forward Price/Earnings Ratio of 8.24. The short interest was 2.07% as of 06/14/2012. International Paper Company operates as a paper and packaging company in North America, Europe, Latin America, Russia, Asia, and north Africa. The company's Industrial Packaging segment manufactures containerboards, including linerboard, medium, whitetop, recycled linerboard, recycled medium, and saturating kraft. Its Printing Papers segment produces printing and writing papers, such as uncoated and coated papers used in copiers, desktop and laser printers, and digital imaging; market pulp for use in the manufacture of printing, writing, and specialty papers, as well as towel and tissue products, and filtration products; and uncoated bristols. The company's Consumer Packaging segment offers coated paperboard for various packaging and commercial printing end uses, such as food, cosmetics, pharmaceuticals, computer software, tobacco products, greeting cards, paperback book covers, lottery tickets, direct mail, and point-of-purchase advertising.

4) Seagate Technology PLC (NASDAQ:STX)

Industry:Data Storage Devices
Market Cap:$10.14B

Seagate Technology PLC has a Dividend Yield of 4.19%, a Payout Ratio of 17.48%, a 1-Year Projected Earnings Per Share Growth Rate of 32.35%, a Price/Sales Ratio of 0.76, and a Forward Price/Earnings Ratio of 2.52. The short interest was 5.65% as of 06/14/2012. Seagate Technology Public Limited Company designs, manufactures, markets, and sells hard disk drives for enterprise, client compute, and client non-compute market applications worldwide. The company's products are used in enterprise servers, mainframes, and workstations; desktop and notebook computers; digital video recorders; personal data backup systems; portable external storage systems; and digital media systems. It also provides data storage services for small to medium-sized businesses, including online backup, data protection, and recovery solutions; and ships external backup storage solutions under its Free Agent Go and Free Agent Go Flex product lines.

5) Schnitzer Steel Industries Inc. (NASDAQ:SCHN)

Sector:Basic Materials
Industry:Steel & Iron
Market Cap:$632.86M

Schnitzer Steel Industries Inc. has a Dividend Yield of 3.23%, a Payout Ratio of 2.17%, a 1-Year Projected Earnings Per Share Growth Rate of 101.89%, a Price/Sales Ratio of 0.17, and a Forward Price/Earnings Ratio of 7.22. The short interest was 5.98% as of 06/14/2012. Schnitzer Steel Industries, Inc. engages in recycling ferrous and nonferrous scrap metals, and used and salvaged vehicles; and manufacturing finished steel products. The company operates through three segments: Metals Recycling Business (MRB), Auto Parts Business (APB), and Steel Manufacturing Business (SMB). The MRB segment involves in the purchase, collection, processing, recycling, sale, and broking of ferrous scrap metals.

6) Commercial Metals Company (NYSE:CMC)

Sector:Basic Materials
Industry:Steel & Iron
Market Cap:$1.35B

Commercial Metals Company has a Dividend Yield of 4.12%, a Payout Ratio of 80.23%, a 1-Year Projected Earnings Per Share Growth Rate of 38.76%, a Price/Sales Ratio of 0.16, and a Forward Price/Earnings Ratio of 6.51. The short interest was 2.06% as of 06/14/2012. Commercial Metals Company engages in recycling, manufacturing, fabricating, and distributing steel and metal products, and related materials and services in the United States and internationally. The company processes scrap metals for use as a raw material by manufacturers of new metal products through 33 scrap metal processing facilities to steel mills and foundries, aluminum sheet and ingot manufacturers, brass and bronze ingot makers, copper refineries and mills, secondary lead smelters, specialty steel mills, high temperature alloy manufacturers, and other consumers. It also operates five steel mills producing reinforcing bars, angles, flats, rounds, small beams, fence-post sections, and other shapes; a scrap metal shredder processing facility; a railroad salvage business; and a copper tube minimill.

7) Steel Dynamics Inc. (NASDAQ:STLD)

Sector:Basic Materials
Industry:Steel & Iron
Market Cap:$2.30B

Steel Dynamics Inc. has a Dividend Yield of 3.80%, a Payout Ratio of 40.17%, a 1-Year Projected Earnings Per Share Growth Rate of 55.96%, a Price/Sales Ratio of 0.29, and a Forward Price/Earnings Ratio of 6.19. The short interest was 2.54% as of 06/14/2012. Steel Dynamics, Inc., together with its subsidiaries, engages in the manufacture and sale of steel products in the United States and internationally. The company operates in three segments: Steel Operations, Metals Recycling and Ferrous Resources Operations, and Steel Fabrication Operations. The Steel Operations segment provides a range of sheet steel products, including hot rolled, cold rolled, and coated steel products; structural steel beams, pilings, and rails; special bar quality and merchant bar quality rounds and round-cornered squares; billets and merchant steel products comprising angles, plain rounds, flats, and channels; and merchant beams and specialty structural steel sections.

8) Steelcase Inc. (NYSE:SCS)

Sector:Consumer Goods
Industry:Business Equipment
Market Cap:$1.03B

Steelcase Inc. has a Dividend Yield of 4.42%, a Payout Ratio of 56.91%, a 1-Year Projected Earnings Per Share Growth Rate of 33.78%, a Price/Sales Ratio of 0.37, and a Forward Price/Earnings Ratio of 8.22. The short interest was 2.73% as of 06/14/2012. Steelcase Inc. designs, manufactures, and distributes furniture systems and seating products, user-centered technologies, and interior architectural products primarily in North America, Europe, and Asia. Its furniture systems portfolio consists of panel-based and freestanding furniture systems; and complementary products, such as storage, tables, and ergonomic worktools. The company also provides seating products, including ergonomic chairs; seating for collaborative or casual settings; and specialty seating for specific markets comprising healthcare and education.

9) Ennis Inc. (NYSE:EBF)

Sector:Consumer Goods
Industry:Office Supplies
Market Cap:$366.88M

Ennis Inc. has a Dividend Yield of 4.99%, a Payout Ratio of 51.44%, a 1-Year Projected Earnings Per Share Growth Rate of 67.91%, a Price/Sales Ratio of 0.71, and a Forward Price/Earnings Ratio of 6.24. The short interest was 2.86% as of 06/14/2012. Ennis, Inc., together with its subsidiaries, engages in the print and manufacture of business forms and other business products. The company operates in two segments, Print and Apparel. The Print segment designs, manufactures, and sells business forms and other printed business products.

10) Nucor Corporation (NYSE:NUE)

Sector:Basic Materials
Industry:Steel & Iron
Market Cap:$11.43B

Nucor Corporation has a Dividend Yield of 4.05%, a Payout Ratio of 60.94%, a 1-Year Projected Earnings Per Share Growth Rate of 61.64%, a Price/Sales Ratio of 0.56, and a Forward Price/Earnings Ratio of 9.62. The short interest was 3.27% as of 06/14/2012. Nucor Corporation, together with its subsidiaries, engages in the manufacture and sale of steel and steel products in North America and internationally. It operates through three segments: Steel Mills, Steel Products, and Raw Materials. The Steel Mills segment produces hot and cold-rolled sheet steel; plate steel; structural steel comprising wide-flange beams, beam blanks, and sheet piling; and bar steel, such as blooms, billets, concrete reinforcing bar, merchant bar, and special bar quality products.

*Company profiles were sourced from Finviz. Financial data was sourced from Finviz and Yahoo Finance.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.