Tuesday, June 10, 2014

5 Long-Term Dividend Grower With Good Fundamentals

I'm sitting here and looking at the several stock screeners, just wondering how stocks hit new life-time-highs, reaching valuations far above 20 on the estimated earnings. Wooow...good news for investors who bought these stocks earlier....bad news for those who plan to buy shares in the future.


How fast must your company grow in the future to defend this valuation level? I believe it should grow by more than 10 percent yearly.

The aim of each investor should be to evaluate risks and to select a price premium in the final investment decision. I’m my favorite asset class, long-term dividend growth stocks, there are not many choices with good fundamentals at the moment, only a dozen companies with a proven track record.

Today I like to present five companies with double-digit expected earnings growth, a debt-to-equity ratio of less than 0.5 and a forward P/E of less than 20. Each stock has raised dividends by more than 25 consecutive years.

5 long-term dividend growers with good fundamentals...

3M (NYSE:MMM) has a market capitalization of $92.84 billion. The company employs 88,667 people, generates revenue of $30.871 billion and has a net income of $4.721 billion. 3M’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $8.056 billion. The EBITDA margin is 26.10 percent (the operating margin is 21.59 percent and the net profit margin 15.29 percent).

Financial Analysis: The total debt represents 18.08 percent of 3M’s assets and the total debt in relation to the equity amounts to 34.66 percent. Due to the financial situation, a return on equity of 26.56 percent was realized by 3M. Twelve trailing months earnings per share reached a value of $6.90. Last fiscal year, 3M paid $2.54 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 20.57, the P/S ratio is 3.02 and the P/B ratio is finally 5.40. The dividend yield amounts to 2.40 percent and the beta ratio has a value of 1.15.


Long-Term Stock Price Chart Of 3M (MMM)
Long-Term Dividend Payment History of 3M (MMM)
Long-Term Dividend Yield History of 3M (MMM)

T. Rowe Price Group (NASDAQ:TROW) has a market capitalization of $21.38 billion. The company employs 5,692 people, generates revenue of $3.484 billion and has a net income of $1.047 billion. T. Rowe Price Group’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1.728 billion. The EBITDA margin is 49.61 percent (the operating margin is 47.00 percent and the net profit margin 30.07 percent).

Financial Analysis: The total debt represents 0.00 percent of T. Rowe Price Group’s assets and the total debt in relation to the equity amounts to 0.00 percent. Due to the financial situation, a return on equity of 23.97 percent was realized by T. Rowe Price Group. Twelve trailing months earnings per share reached a value of $4.11. Last fiscal year, T. Rowe Price Group paid $1.52 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 19.78, the P/S ratio is 6.16 and the P/B ratio is finally 4.44. The dividend yield amounts to 2.16 percent and the beta ratio has a value of 1.33.


Long-Term Stock Price Chart Of T. Rowe Price Group (TROW)
Long-Term Dividend Payment History of T. Rowe Price Group (TROW)
Long-Term Dividend Yield History of T. Rowe Price Group (TROW)

Walgreen (NYSE:WAG) has a market capitalization of $67.67 billion. The company employs 173,000 people, generates revenue of $72.217 billion and has a net income of $2.450 billion. Walgreen’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $5.020 billion. The EBITDA margin is 6.95 percent (the operating margin is 5.46 percent and the net profit margin 3.39 percent).

Financial Analysis: The total debt represents 14.22 percent of Walgreen’s assets and the total debt in relation to the equity amounts to 25.94 percent. Due to the financial situation, a return on equity of 13.00 percent was realized by Walgreen. Twelve trailing months earnings per share reached a value of $2.84. Last fiscal year, Walgreen paid $1.14 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 24.97, the P/S ratio is 0.94 and the P/B ratio is finally 3.46. The dividend yield amounts to 1.77 percent and the beta ratio has a value of 1.33.


Long-Term Stock Price Chart Of Walgreen (WAG)
Long-Term Dividend Payment History of Walgreen (WAG)
Long-Term Dividend Yield History of Walgreen (WAG)

Hormel Foods (NYSE:HRL) has a market capitalization of $12.88 billion. The company employs 19,700 people, generates revenue of $8.751 billion and has a net income of $530.08 million. Hormel Foods’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $910.33 million. The EBITDA margin is 10.40 percent (the operating margin is 9.21 percent and the net profit margin 6.06 percent).

Financial Analysis: The total debt represents 5.09 percent of Hormel Foods’s assets and the total debt in relation to the equity amounts to 7.55 percent. Due to the financial situation, a return on equity of 17.17 percent was realized by Hormel Foods. Twelve trailing months earnings per share reached a value of $2.09. Last fiscal year, Hormel Foods paid $0.68 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 23.38, the P/S ratio is 1.47 and the P/B ratio is finally 3.88. The dividend yield amounts to 1.64 percent and the beta ratio has a value of 0.47.


Long-Term Stock Price Chart Of Hormel Foods (HRL)
Long-Term Dividend Payment History of Hormel Foods (HRL)
Long-Term Dividend Yield History of Hormel Foods (HRL)

VF Corporation (NYSE:VFC) has a market capitalization of $27.03 billion. The company employs 59,000 people, generates revenue of $11.419 billion and has a net income of $1.210 billion. VF Corporation’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1.871 billion. The EBITDA margin is 16.39 percent (the operating margin is 14.42 percent and the net profit margin 10.60 percent).

Financial Analysis: The total debt represents 14.06 percent of VF Corporation’s assets and the total debt in relation to the equity amounts to 23.87 percent. Due to the financial situation, a return on equity of 21.60 percent was realized by VF Corporation. Twelve trailing months earnings per share reached a value of $2.75. Last fiscal year, VF Corporation paid $0.92 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 22.88, the P/S ratio is 2.36 and the P/B ratio is finally 4.54. The dividend yield amounts to 1.68 percent and the beta ratio has a value of 0.98.


Long-Term Stock Price Chart Of VF Corporation (VFC)
Long-Term Dividend Payment History of VF Corporation (VFC)
Long-Term Dividend Yield History of VF Corporation (VFC)
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*I am long WAG, MMM, . I receive no compensation to write about these specific stocks, sector or theme. I don't plan to increase or decrease positions or obligations within the next 72 hours.
For the other stocks: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I receive no compensation to write about any specific stock, sector or theme.

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