11 Undervalued, High-Yield, Dividend-Paying Financials

Below is a list of 11 financial stocks that are paying attractive dividends (between 4-7%). These stocks are also attractively priced, according to the Graham Number.Benjamin Graham, the man who developed this equation, was a former mentor of Warren Buffett and is the so-called “Godfather” of value investing.The Graham Number, or the maximum price an investor should pay for a stock, is derived using only two data points: current earnings per share and current book value per share. Click for expanded images:The Graham Number = Fair Value of a Stock = Square Root of (22.5) x (TTM Earnings per Share) x (MRQ Book Value per Share).The math of the Graham number is relatively straightforward. It is predicated on the belief that the price-to-earnings (P/EPS) ratio should be no more than 15,... more

11 Dividend Stocks With LBO Characteristics

With a new buyout being announced (seemingly) every day, I thought it might be worth looking into stocks that might be LBO (leveraged buy out) candidates. I started off by taking the Russell 1000 and sorting it so I only included stocks with net cash on their balance sheet. This shows an underleveraged balance sheet that private equity could exploit in a buyout. Then, I looked for stocks with 15%+ returns on invested capital (private equity loves strong returns on capital), a low multiple to allow for a deal to be reached, and a dividend yield (showing the company's confidence in future cash flows, plus paying investors to wait while for the buyout). After performing this search, I ended up with the following 11 candidates. Ticker Short Name Dvd Yld EV/TTM... more

13 Insurance Stocks for Dividend Lovers

During the last global financial crisis, insurance companies have been affected in adverse ways like all other financial institutions. Most of the insurance companies had to reduce their dividends in 2009. Currently the trend reversed and revenues of insurance companies are increasing. For the first nine-months of 2010, the United States property/casualty insurance industry's net premiums were $327.4 billion, an increase of 6.1% compared with a year ago. The industry saw significant increases in net income which climbed 74% to $29.9 billion for the nine months ending in September 2010. We prepared a list of 13 insurance companies which pay fat dividend checks regularly. All companies in this list have a dividend yield of at least 2%. These 13 stocks returned 12.12% (including... more

Microsoft Corporation: Dividend Stock Analysis

This article originally appeared on The DIV-Net March 28, 2011. Linked here is a detailed quantitative analysis of Microsoft Corporation (MSFT). Below are some highlights from the above linked analysis: Company Description: Microsoft is the world’s largest software company, develops PC software, including the Windows operating system and the Office application suite.Fair Value: In calculating fair value, I consider the NPV MMA Differential Fair Value along with these four calculations of fair value, see page 2 of the linked PDF for a detailed description: 1. Avg. High Yield Price 2. 20-Year DCF Price 3. Avg. P/E Price 4. Graham Number MSFT is trading at a discount to 1.), 2.) and 3.) above. The stock is trading at a 6.6% discount to its calculated fair value of $27.44. MSFT earned... more

Dividend Investors Should Boost Technology Exposure, Be Cautious With Energy

What a difference a decade makes! Who would have thought about dividend investors having a choice between Exxon (XOM) and Intel (INTC) back in 2001? Ten years ago, INTC yielded a paltry 0.3%, while XOM's dividend offered a 2.2% return. Most Technology companies didn't pay dividends back then, but many do now, with even Cisco (CSCO), a notable holdout, recently declaring an initial payment.Today, several Large-Cap Technology companies offer dividend yields of at least 150% of the 1.8% yield on the S&P 500. Here are thoses names above 2.7%: Paychex (PAYX) - 3.9% Intel (INTC) - 3.7% Microchip (MCHP) - 3.6% Linear Technology (LLTC) - 2.9% Molex (MOLX) - 2.8% National Semiconductor (NSM) - 2.8% Automatic Data Processing (ADP) - 2.8% With the recent run-up in the prices of Energy stocks,... more

8 Companies With Consistent Dividend Growth Over 20%

If dividend investing is the slow and steady path to wealth, than dividend growth is the engine providing the power. In order for the process to work correctly, investors must choose companies that consistently raise their dividends faster than inflation. Historically, we can assume inflation will average, over the long term, somewhere between 3 - 4%. Finding companies that grow their dividends well above this benchmark is one of the most important aspects of dividend investing.The following companies have not just grown their dividends consistently, but have done so at an above average rate of over 20% compounded over the years. Anyone who purchased these companies at a fair price over the past decade has seen their yield on cost rise to well above the yield on Treasurys, while also... more

A Closer Look At Three High Yielding Oil Royalty Trusts

Although the stock market has risen broadly in the first quarter of 2011, numerous concerns remain regarding the health of the global economy. While job creation levels have picked up to more comfortable levels, unemployment remains high in the country, especially when counting the large number of people who would prefer to increase their hours from part-time to full-time and those who have altogether given up looking for a job. Meanwhile, with oil prices poised to remain elevated for the near-term, many sectors around the country, ranging from retail to food producers, look to feel the pinch in this quarter as they debate the merits and ability of passing on costs to consumers.... more

IPO Pick of the Week: CVR Partners Expects 14.8% Dividend Payout

CVR Partners, LP (UAN) is scheduling a $250 million IPO with a market capitalization of $949 million at the price range mid-point of $13, for Friday, April 8, 2011 (see valuation metrics here).CONCLUSION -- UAN’s partnership projects a payout of 14.8% for the 12 months ending March 31, 2012, which looks achievable. The public will own 26% post-IPO. UAN is a nitrogen fertilizer spin-off from CVR Energy (CVI).PARENT -- CVR Energy, Inc. (CVI), the parent, has a market capitalization of $2.07 billion. The stock as increased 190% in the last six months. CVI refines, markets and transports transportation fuel, in addition to its nitrogen fertilzer business.CVI believes it is the only operation in North America that utilizes a petroleum coke gasification process to produce nitrogen fertilizer.... more

Navigating the Yield / Growth Trade-Off

Sometimes, I think the world has lost a lot since the good old days, when an income investor could simply pick up a few high-grade corporate bonds and some utility stocks and call it a day. It’s so easy for such investors to articulate a goal: Income. How hard was that? Unfortunately, implementation in the modern era can be a nightmare. For one thing, interest rates remain ridiculously low. Commentators speak of this as an unconditional blessing, but such notions are hogwash to suppliers of capital; i.e. those who see interest as an income item rather than an expense. Even so, high single-digit and even double-digit yields can be found. But these tend to be surrounded by so many dire warnings as to almost make smoking seem blasé. Then, too, we have the financial preachers who extoll... more

Dividend Companies In The News

A snapshot of the important news and events from the world of dividend paying companies. This week was a slow one for dividend increases, but we did have a spin-off, some earnings releases, and 2 companies announced consumer price increases for their products. Dividend Raises Bank of the Ozarks (OZRK) announced its Board of Directors has approved a regular quarterly cash dividend of $0.18 per common share payable April 22, 2011 to shareholders of record as of April 15, 2011. The dividend of $0.18 per share represents an increase of $0.01 per share, or 5.88%, over the dividend paid in the previous quarter. The Company has increased its quarterly dividend in five of the last six quarters. International Paper (IP) announced that its Board of Directors has approved an increase in its... more