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  • 3 Fairly Priced High-Margin Stocks Warren Buffett Would Like

    Everybody wants to make money, big money over the long-haul. You put money into a stock and get twice of this amount back in 10 years. That's great and I have often invested into stocks that doubled in a decade easily.

    Today I like to come back to return. It's very important to see that the company makes good profits on its annual sales. The higher the margin, net or operational, the better is the market dominance of the firm.

    I like companies with high margins, Google and Apple have unbelievable high margins. You might wonder but they have no direct competition and can charge customers each price they want, there is no alternative and if you need those products or you think you must have them, you must pay the bill.

    You also may like: These 7 Dividend Cash Cows Produce Money Like Milk

    Warren Buffett is also a great investor who invested into stocks that produce high returns on invested capital. It's the guarantee that the firm makes internal revenues which could be used to pay investors.

    I ran a screen that searched for the accompanying criteria:

    - Average returns on invested capital > 12% over the last 5 years

    - Current return on invested capital > its 5-year average

    I sifted further for organizations with a long history of solid sales and profit improvements combined with robust, and enhancing, net revenues that are not profoundly leveraged by debt. I added the accompanying extra criteria:

    - Average sales growth > 10% over the last 5 years

    - Average EPS growth > 10% over the last 5 years

    - Average operating profit margin > 10% over the last 5 years

    - Current operating profit margin > its 5-year average

    3 companies jumped on top of my screen. Very informative...

    You also may like: 8 Stocks With Nearly Safe Dividends

    #1 Gentex (NASDAQ:GNTX) has a market capitalization of $4.05 billion. The company employs 3,801 people, generates revenue of $1.171.86 billion and has a net income of $222.93 million. Gentex's earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $367.64 million. The EBITDA margin is 31.37 percent (the operating margin is 26.00 percent and the net profit margin 19.02 percent).

    Financial Analysis: The total debt represents 15.48 percent of Gentex's assets and the total debt in relation to the equity amounts to 20.57 percent. Due to the financial situation, a return on equity of 18.21 percent was realized by Gentex. Twelve trailing months earnings per share reached a value of $1.86. Last fiscal year, Gentex paid $0.56 in the form of dividends to shareholders.

    Market Valuation: Here are the price ratios of the company: The P/E ratio is 14.68, the P/S ratio is 3.46 and the P/B ratio is finally 3.04. The dividend yield amounts to 2.31 percent and the beta ratio has a value of 1.10. - See #2 and #3 here: 3 Fairly Priced High-Margin Stocks Warren Buffett Would Like....

    In an earlier article about high return creating stocks, I found Gentex.

    Tags: GNTX, CPA, FOSL
    Oct 01 3:36 AM | Link | Comment!
  • 12 Cheapest Stock Of The Dividend Aristocrats Index

    Today I've attached a list of the yields from the Dividend Aristocrats for you. You can also find the payout ratios in this table. It's very informative in my view and I use this overview too in order to get a feeling about the pricing of the market.

    Dividend Aristocrats are stocks that have increased dividend payments over a period of 25 consecutive years without a break. That's a top value and around 100+companies could achieve this goal.

    Standard & Poor's increases the restrictions and cut the list to 42 members. Well not all stocks are good from the list but you can find there some value player. Just take a look!

    You may also like: 6 Cheap Dividend Aristocrats With High Growth Predicted

    Only 12 companies yield over 3 percent. Not bad for a low interest environment. The bond market offers 1.56 percent and has also default risks.

    The top yielding stocks also slow grower full of debt.

    These are my main thoughts to the Dividend Aristocrats list:

    - When we look at the highest yielding stocks with yields over 3 percent, we see that only 3 companies have a low forward P/E.

    - Stocks with a lower yield are much cheaper. 9 companies with yields less than 2 percent have a forward P/E under 15.

    - Low yielding stocks pay out less of it's annual earnings and might be reinvest more money into growth. - See more of the results and the 12 cheapest Dividend Aristocrats here: Yields Of The Dividend Aristocrats...

    Tags: T, ED, CVX, XOM, BMS, AFL, WMT, CB, SWK, MDT, ADM, BEN
    Sep 30 5:08 AM | Link | Comment!
  • 26 Top Dividend Growth And Share Buyback Stocks Of The Past Week

    Today I've compiled the latest dividend growth stocks and share buyback announcements. Twelve companies have released a share buyback program but only Lockheed Martin was the company with significant influence.

    The military provider to the U.S. Government plans to buy additional $2 billion in own shares in the future. That's good news for shareholders and those will also receive more money by dividends. Lockheed also boosted its dividend payments by 12.78 percent. The new yield will hit the 3.3 percent level.

    On the dividend growth side, only 14 companies or funds/trusts announced to pay higher dividends. The biggest company was Lockheed Martin followed by the electric utility stock OGE Energy.

    In my view there were no interesting companies on the attached list. For sure you need a second check but for my own asset allocation, which excluded highly cyclical stocks and financials/banks/trusts etc..The research effort was very small for me.

    What do you think from the latest dividend grower and share repurchaser? Do you like them or do you own one of them? Please let me known by leaving a little comment on this blog. Thank you for reading my blog.

    My favorite Dividend Grower and Share Repurchaser
    of the recent week are...

    #1 Lockheed Martin (NYSE:LMT) has a market capitalization of $56.32 billion. The company employs 115,000 people, generates revenue of $45.358 billion and has a net income of $2.950 billion. Lockheed Martin's earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $6.212 billion. The EBITDA margin is 13.70 percent (the operating margin is 9.93 percent and the net profit margin 6.50 percent).

    Financial Analysis: The total debt represents 17.00 percent of Lockheed Martin's assets and the total debt in relation to the equity amounts to 125.09 percent. Due to the financial situation, a return on equity of 119.02 percent was realized by Lockheed Martin. Twelve trailing months earnings per share reached a value of $9.70. Last fiscal year, Lockheed Martin paid $4.78 in the form of dividends to shareholders.

    Market Valuation: Here are the price ratios of the company: The P/E ratio is 18.73, the P/S ratio is 1.24 and the P/B ratio is finally 11.51. The dividend yield amounts to 3.00 percent and the beta ratio has a value of 0.72. - See #2 - #26 at 26 Top Dividend Growth And Share Buyback Stocks Of The Past Week....

    Tags: LMT, OGE, SAR, PSEC, WMC, HT, IBOC, MTR, WAFD, ATNI, CRT, HGT, PMT, STWD, ESEA, CHCO, CW, BDCV, EVTC, VPG, PEBK
    Sep 28 2:14 AM | Link | Comment!
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