Tag: dividends

Top Dividend Stocks Under $10 per Share

by Fred Fuld III

The advantage of owning dividend stocks is that your invested capital is being returned while you are waiting for the share price to appreciate. Dividends also can add some stability to the stock price.

Even though it really doesn’t make any difference what the price of s stock is, owning a low priced stock gives investors a psychological benefit. (“A $5 stock only has to go up by $1 and I’ve made 20%.”) Plus, lower priced stocks are accessible to more investors. After all, how many investors can afford 100 shares of Amazon?

What happens if you add the two together, a low price and dividends? There are actually around 360 stocks that fit those categories, assuming yields of at least 2%. However, if you narrow it down to the stocks with the top fundamentals, there are actually eight stocks that fit into that category.

The fundamentals that are considered include:

  • P/E ratio below 15
  • Forward P/E below 15
  • Price to Earnings Growth Ratio of less than one
  • Price Sales Ratio less than one
  • Yield over 2%

For example, the office supplies company, ACCO Brands (ACCO), sells for less than $9 per share, and trades at 7.5 times trailing earnings and 6.4 times forward earnings. It sports a favorable  0.75 price to earnings growth ratio and an excellent 0.44 price/sales ratio. The latest quarterly earnings growth was 21.2% year-over-year. The yield is 2.87% and dividends are paid quarterly.

Another example is the chemical company, Valhi (VHI), based in Dallas, Texas, which yields 3.43% and trades for less than $3 per share. The stock has an extremely low P/E ratio of 2.3, and Forward P/E of 2.8.

The following is a list of the various stocks that match the previously described fundamentals.

Company Symbol Market Cap P/E Price
ACCO Brands Corporation ACCO 866.73M 7.52 8.35
BGC Partners, Inc. BGCP 2.82B 9.46 6.11
Ford Motor Company F 35.07B 6.08 8.82
Manning & Napier, Inc. MN 33.90M 1.77 2.26
Comp. Siderurgica Nacional SID 3.34B 3.65 2.64
Telefonica, S.A. TEF 44.18B 11.83 8.79
Unique Fabricating, Inc. UFAB 52.72M 10.15 5.52
Valhi, Inc. VHI 794.11M 2.3 2.33

Please note that many of these stocks have very low market caps and should be considered very speculative.

Disclosure: Author owns Ford.

Like Dividend Stocks? Check Out the Aristocrats

by Fred Fuld III

Many investors prefer dividends. Yet, just because a stock pays a dividend does not make it a good stock. But if a company has been raising dividends, and raising them on a consistent basis, it probably means that the company has been doing something right.

A Dividend Aristocrat takes this concept to the extreme. It is a stock that has increased its dividend every year for at least the last 25 years.

One of the Aristocrat leaders is Proctor & Gamble (PG) which has increased its dividend over 61 years.

At 3.76%, the yield is fairly high, compared to a bank savings account, a certificate of deposit, or a money market fund.

Other well-known companies that fall into this elite category are the following:
Coca-Cola (KO) 55 years
Johnson & Johnson (JNJ) 55 years
Lowe’s (LOW) 55 years
Colgate Palmolive (CL) 54 years
Target (TGT) 50 years
PepsiCo (PEP) 45 years

If you had bought any of these stocks ten or twenty or 30 years ago, and reinvested the dividends, your yield based on your original investment would be enormous.

Disclosure: Author didn’t own any of the above at the time the article was written.