Dividend Yield | Dec 08, 2012 05:43AM ET
The utility sector offers generally high dividend yields with value. The negative is that the sector is very capital intensive and the growth potential is limited. Given those parameters, I wanted to know what stocks are the best dividend stock picks for the next year. I screened all 123 listed utility stocks by the best ones for next year. My criteria were:
- Forward P/E under 15
- Past Sales growth recent 10 years over 5 percent
- Positive Earnings per share growth for the next five years
- Operating Margin over 10 percent
Twelve companies fulfilled the above mentioned criteria. Eight of them have a buy or better rating. I personally don’t own any utility stocks because I am a dividend growth investor. I always look for growing companies with strong brands and likely abilities to expand aboard. Utilities don’t fulfill these criteria. So my main focus will be on the consumer sector.
National Grid (NGG) has a market capitalization of $41.25 billion. The company employs 25,645 people, generates revenue of $22.180 billion and has a net income of $3.268 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $7.602 billion. The EBITDA margin is 34.28 percent (the operating margin is 25.08 percent and the net profit margin 14.73 percent).
Financial Analysis: The total debt represents 48.64 percent of the company’s assets and the total debt in relation to the equity amounts to 249.22 percent. Due to the financial situation, a return on equity of 22.25 percent was realized. Twelve trailing months earnings per share reached a value of $5.08. Last fiscal year, the company paid $3.15 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 11.17, the P/S ratio is 1.86 and the P/B ratio is finally 2.83. The dividend yield amounts to 5.59 percent and the beta ratio has a value of 0.63.
Financial Analysis: The total debt represents 36.63 percent of the company’s assets and the total debt in relation to the equity amounts to 130.55 percent. Due to the financial situation, a return on equity of 7.95 percent was realized. Twelve trailing months earnings per share reached a value of $2.53. Last fiscal year, the company paid $2.20 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 16.38, the P/S ratio is 1.07 and the P/B ratio is finally 1.31. The dividend yield amounts to 5.31 percent and the beta ratio has a value of 0.42.
Financial Analysis: The total debt represents 33.59 percent of the company’s assets and the total debt in relation to the equity amounts to 92.22 percent. Due to the financial situation, a return on equity of 7.53 percent was realized. Twelve trailing months earnings per share reached a value of $3.15. Last fiscal year, the company paid $2.97 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 20.44, the P/S ratio is 3.12 and the P/B ratio is finally 1.26. The dividend yield amounts to 4.76 percent and the beta ratio has a value of 0.34.
Here is the full table with some fundamentals (TTM):
* 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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