Basic material dividend stocks with highest expected growth and low price ratios originally published at "long-term-investments.blogspot.com". Good stocks to buy are hard to find. But what are good stocks?
Good investment indicators
Primarily it's a question of your investment philosophy or screening criteria. I am focused on dividend stocks with great yields, strong market positions and low limitations to grow. I also invest into stocks with no yields or low dividend payments.
Don't look at the yield alone
The dividend yield is only an expression and should never be a single investment criterion. I know so many people who only look at the P/E ratio and the dividend yield and argue that the stock is cheap at a P/E below 10. That's too easy. If the company has no debt, you should look the enterprise value.
Growth is the value driver
More important is growth. If a company doubles every 3 years sales and earnings, it's normal that the stock is highly valuated. Stock valuation is a very complex area.
Today I like to screen some opportunities from the basic material sector. 595 stocks are available with a relationship to the raw material sector - nearly 300 of them pay dividends. The average sector P/E ratio amounts to 11.08 at a yield of 2.98 percent.
I screened large capitalized stocks with very high expected earnings per share growth for the next five years (over 10 percent) and a low forward P/E ratio of less than 15. Seventeen stocks fulfilled my criteria of which twelve are currently recommended to buy. Two High-Yields are below the results.
Here is the full table with some fundamentals:
Take a closer look at the full list. The average P/E ratio amounts to 14.11 and forward P/E ratio is 10.89. The dividend yield has a value of 2.46 percent. Price to book ratio is 2.16 and price to sales ratio 1.90. The operating margin amounts to 18.06 percent and the beta ratio is 1.54. Stocks from the list have an average debt to equity ratio of 0.54.
Related stock ticker symbols:
SDRL, EC, MT, PTR, SCCO, ESV, MUR, GGB, VLO, SLB, PSX, CNQ, TS, PKX, HAL, NOV, DO