This article will discuss recent bullish calls by Jim Cramer on his Mad Money television show. Specifically, it will look at stocks out of these bullish calls that pay dividends. Furthermore, it will take a look at how much of a dividend these stocks pay and also at their history of dividend increases. In addition, it will also look at the stocks' abilities to raise the dividends in the future. Stocks for this article were selected first based on their selection by Cramer, and next by only focusing on stocks that have increased dividends consistently recently and that have potential to continue doing so.
I am constantly on the lookout for dividend paying stocks. As an investor, my preference is for dividend paying stocks and also for sources of income in the stock and bond market. In a recent article, I presented five great companies that pay good dividends for an investor to consider going into 2013. I believe that dividends are a great way to lock in returns in the stock market while holding stocks for price appreciation. You get paid to wait for your stocks to go up when you are collecting dividends along the way.
Here are two recent stock picks by Jim Cramer on Mad Money and I will look into how much in dividends these stocks pay.
Casey's General Stores (NASDAQ:CASY) was given a bullish call by Jim Cramer on Monday, December 17, 2012. Based on its company profile, it operates convenience stores in eleven midwestern states. Year-to-date, as of 12/19/2012, the stock is down 2.02%. Based on its key statistics, it has a trailing p/e ratio of 18.10 and a forward p/e ratio of 15.31 as of 12/24/2012. Its market capitalization as of 12/24/201 is $2.01 Billion.
Here is a look at dividend information for Casey's General Stores. It currently pays a dividend of .66 per share for a yield of 1.30%. This dividend is paid quarterly at .165 per quarter. For the fiscal year ending in April of 2013, eps analyst estimates call for earnings of $2.99. This provides for a dividend payout ratio of 22.07%. Here is a table of the recently quarterly dividends as they have been raised. Remember, these amounts are paid out every quarter and only the quarters when it raised the dividend are included. Information is per Yahoo! Finance.
As we can see by this chart, the dividend increased 94.12% by July of 2012 from its starting point as of July 2009. This is an average annual increase of 31.37% based on these three years. Per analyst estimates, its annual growth rate for eps over the next 5 years is predicted to be 11.50% per year. If it can maintain and grow these earnings, this may be a good company to watch for dividend and earnings growth.
ConAgra Foods (NYSE:CAG) was given a bullish call by Jim Cramer on 12/20/12 per The Street's website. Based on its company profile, it produces foods and products with brand names that I have heard of such as Slim Jim, Swiss Miss, Healthy Choice, and many more. Year-to-date, as of 12/24/2012, the stock is up 14.24%. Based on its key statistics, it has a trailing p/e of 18.79 and a forward p/e of 13.18. Its market capitalization as of 12/24/2012 is $12.09 Billion.
Here is a look at dividend information for ConAgra Foods. It currently pays a dividend of $1.00 per share for a healthy yield of 3.40%. This dividend is paid quarterly at .25 per quarter. Eps for the current fiscal year ending in May of 2013 are esimated to be $2.08. This provides for a current dividend payout ratio of 48.08%. Here is a table of the recently quarterly dividends as they have been raised. Remember, these amounts are paid out every quarter and only the quarters when it raised the dividend are included. Information is per Yahoo! Finance.
Based on this chart, the dividend increased 31.58% over 5 years for an average annual increase of 6.316%. This also included October 2008 when it did not raise its dividend. Per analyst estimates, it has a five year growth rate for eps estimated to be 6.77% per year. If it can achieve this and grow earnings, it would look like the dividend is poised to continue to increase.
Based on this information, I believe that Casey's General Stores and ConAgra Foods are two stocks worth further analysis. They have a history of raising dividends recently and are both predicted by analysts to have growing earnings over the next five years. Both also have relatively low dividend payout ratios under 50%, with Casey's General Stores' being under 25%. Thank you for reading this article.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.