Wednesday , 19 September 2018

10 Best Dividend Paying Stocks For The Enterprising Investor

There are a number of great companies in the market today. By using the ModernGraham Valuation Model, I’ve selected ten of the best dividend paying stock…yields among the undervalued companies reviewed by ModernGraham which are suitable for Enterprising Investor according to the ModernGraham approach.

The original article has been edited here by munKNEE.com for length (…) and clarity ([ ])

…The companies selected for this list may not pay what some consider to be a huge dividend, but they have demonstrated strong financial positions through passing the requirements of the Enterprising Investor and show potential for capital growth based on their current price in relation to intrinsic value.  As such, these defensive dividend stocks may be a great investment if they prove to be suitable for your portfolio after your own additional research.

The Defensive Investor is concerned with the small size, low current ratio, insufficient earnings stability or growth over the last ten years, and the poor dividend history. The Enterprising Investor is only concerned with the level of debt relative to the net current assets.

1. GameStop Corp. (GME)

GameStop Corp. is suitable for the Enterprising Investor but not the more conservative Defensive Investor…

As for a valuation, the company:

  • appears to be Undervalued after growing its EPSmg (normalized earnings) from $2.03 in 2015 to an estimated $2.45 for 2019
    • [which] outpaces the market’s implied estimate of 1.3% annual earnings loss over the next 7-10 years…

At the time of valuation the company:

  • was trading below its Graham Number of $37.34,
  • pays a dividend of $1.52 per share, for a yield of 10.5%, putting it among the best dividend paying stocks today.
  • Its PEmg (price over earnings per share – ModernGraham) was 5.91, which was below the industry average of 37.1, which makes it one of the most undervalued stocks in its industry and
  • was trading above its Net Current Asset Value (NCAV) of $-2.68…

2. Summit Hotel Properties Inc. (INN)

Summit Hotel Properties Inc. is suitable for the Enterprising Investor but not the more conservative Defensive Investor…

As for a valuation, the company:

  • appears to be Undervalued after growing its EPSmg…from $-0.07 in 2014 to an estimated $0.74 for 2018…
    • [which] outpaces the market’s implied estimate of 5.15% annual earnings growth over the next 7-10 years….

At the time of valuation…the company:

  • was trading above its Graham Number of $11.37,
  • pays a dividend of $0.67 per share, for a yield of 4.9%, putting it among the best dividend paying stocks today.
  • Its PEmg…of 18.79, which was below the industry average of 49.54…makes it one of the most undervalued stocks in its industry…[and]
  • was trading above its Net Current Asset Value…of $-8.64…

3. Lucara Diamond Corp. (TSE:LUC)(LUCRF)

Lucara Diamond Corp. is suitable for the Enterprising Investor but not the more conservative Defensive Investor…

As for a valuation, the company:

  • appears to be Undervalued after growing its EPSmg…from $0.08 in 2014 to an estimated $0.22 for 2018…
    • [which] outpaces the market’s implied estimate of 0.98% annual earnings growth over the next 7-10 years…

At the time of valuation…the company:

  • was trading above its Graham Number of $1.96,
  • pays a dividend of $0.1 per share, for a yield of 4.3%, putting it among the best dividend paying stocks today.
  • Its PEmg…of 10.45 was below the industry average of 42.77, which…makes it one of the most undervalued stocks in its industry…[and]
  • was trading above its Net Current Asset Value…of $-0.03…

4. Intertape Polymer Group (TSE:ITP)(ITPOF)

Intertape Polymer Group is suitable for the Enterprising Investor but not the more conservative Defensive Investor…

As for a valuation, the company:

  • appears to be Undervalued after growing its EPSmg…from $0.56 in 2014 to an estimated $1.27 for 2018…
    • [which] outpaces the market’s implied estimate of 2.53% annual earnings growth over the next 7-10 years…

At the time of valuation…the company was:

  • trading above its Graham Number of $12.89,
  • pays a dividend of $0.72 per share, for a yield of 4.2%, putting it among the best dividend paying stocks today.
  • Its PEmg…of 13.56 was below the industry average of 21.34 which…makes it one of the most undervalued stocks in its industry [and] was
  • trading above its Net Current Asset Value…of $-4.04…

5. Sun Life Financial Inc. (TSE:SLF)(SLF)

Sun Life Financial Inc. is suitable for the Enterprising Investor but not the more conservative Defensive Investor.

As for a valuation, the company:

  • appears to be Undervalued after growing its EPSmg…from $1.96 in 2014 to an estimated $3.98 for 2018 [which]…
    • outpaces the market’s implied estimate of 2.43% annual earnings growth over the next 7-10 years…

At the time of valuation…the company:

  • was trading below its Graham Number of $62.47,
  • pays a dividend of $1.75 per share, for a yield of 3.3%, putting it among the best dividend paying stocks today.
  • Its PEmg…of 13.35 was below the industry average of 36.08…[which] makes it one of the most undervalued stocks in its industry…

6. Hanesbrands Inc. (HBI)

Hanesbrands Inc. is suitable for the Enterprising Investor but not the more conservative Defensive Investor.

As for a valuation, the company:

  • appears to be Fairly Valued after growing its EPSmg (normalized earnings) from $0.75 in 2014 to an estimated $1.11 for 2018 [which]…
    • supports the market’s implied estimate of 4.92% annual earnings growth over the next 7-10 years…

At the time of valuation the company:

  • was trading above its Graham Number of $8.59,
  • pays a dividend of $0.6 per share, for a yield of 3%, putting it among the best dividend paying stocks today.
  • Its PEmg…of 18.35 was below the industry average of 40.48, which…makes it one of the most undervalued stocks in its industry…[and]
  • was trading above its Net Current Asset Value…of $-7.73…

7. H & R Block Inc. (HRB)

H & R Block Inc is suitable for the Enterprising Investor but not the more conservative Defensive Investor…

As for a valuation, the company:

  • appears to be Undervalued after growing its EPSmg from $1.44 in 2014 to an estimated $2.02 for 2018….[which]
    • outpaces the market’s implied estimate of 2.21% annual earnings growth over the next 7-10 years…

At the time of valuation…the company was:

  • trading above its Graham Number of $0….
  • pays a dividend of $0.88 per share, for a yield of 3.4%, putting it among the best dividend paying stocks today.
  • Its PEmg…of 12.92 was below the industry average of 25.5 which…makes it one of the most undervalued stocks in its industry…[and]
  • was trading above its Net Current Asset Value of $-9.45…

8. LyondellBasell Industries NV (LYB)

LyondellBasell Industries NV is suitable for the Enterprising Investor but not the more conservative Defensive Investor…

As for a valuation, the company:

  • appears to be Undervalued after growing its EPSmg…from $6.13 in 2014 to an estimated $9.75 for 2018 [which]
    • outpaces the market’s implied estimate of 1.3% annual earnings growth over the next 7-10 years….

At the time of valuation…the company:

  • was trading above its Graham Number of $66.06,
  • pays a dividend of $3.55 per share, for a yield of 3.3%, putting it among the best dividend paying stocks today.
  • Its PEmg…[of] 11.1 was below the industry average of 30.04, which…makes it one of the most undervalued stocks in its industry [and]…
  • was trading above its Net Current Asset Value of $-13.94…

9. Leggett & Platt, Inc. (LEG)

Leggett & Platt, Inc. is suitable for the Enterprising Investor but not the more conservative Defensive Investor…

As for a valuation, the company:

  • appears to be Undervalued after growing its EPSmg…from $1.14 in 2014 to an estimated $2.35 for 2018…[which]
    • outpaces the market’s implied estimate of 5.06% annual earnings growth over the next 7-10 years.

At the time of valuation…the company:

  • was trading above its Graham Number of $23.11…
  • pays a dividend of $1.42 per share, for a yield of 3.3%, putting it among the best dividend paying stocks today.
  • Its PEmg…of 18.62 was above the industry average of 17.71…[and]
  • was trading above its Net Current Asset Value of $-5

10. Prudential Financial Inc. (PRU)

Prudential Financial Inc. is suitable for the Enterprising Investor but not the more conservative Defensive Investor…

As for a valuation, the company:

  • appears to be Undervalued after growing its EPSmg from $2.17 in 2014 to an estimated $12.54 for 2018 [which]
  • outpaces the market’s implied estimate of 0.45% annual earnings loss over the next 7-10 years….

At the time of valuation…the company:

  • was trading below its Graham Number of $185.87…[and]
  • pays a dividend of $3 per share, for a yield of 3.1%, putting it among the best dividend paying stocks today.
  • Its PEmg…of 7.6 was below the industry average of 30.02, which…makes it one of the most undervalued stocks in its industry…

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