Dividend Yield | Nov 15, 2012 06:18AM ET
I like dividend growth stocks in the second and third range because they are often not on the radar of many mainstream investors and are therefore often much cheaper than dividend growth stocks on the DJIA Index (e.g. Johnson & Johnson (JNJ)). The third class of dividend growth stocks are the Dividend Challengers. These are stocks that raised dividends over a period of more than five consecutive years but less than 10 years. One day they could become a big dividend hero like Coca Cola (KO) or Procter & Gamble (PG). But which Dividend Challengers are worth buying now?
I made a screen of the 105 Dividend Challengers and implemented two restrictions: The Company should have a current buy or better recommendation and the stock should have positive earnings per share growth for the next five years of more than ten percent yearly. Twenty-three stocks fulfilled these criteria. As you can see, the investment category is full of investment opportunities.
Walgreen Company (WAG) has a market capitalization of $30.46 billion. The company employs 171,000 people, generates revenue of $71.633 billion and has a net income of $2.127 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $4.630 billion. The EBITDA margin is 6.46 percent (the operating margin is 4.84 percent and the net profit margin 2.97 percent).
Financial Analysis: The total debt represents 16.11 percent of the company’s assets and the total debt in relation to the equity amounts to 29.57 percent. Due to the financial situation, a return on equity of 12.86 percent was realized. Twelve trailing months earnings per share reached a value of $2.42. Last fiscal year, the company paid $0.95 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 13.32, the P/S ratio is 0.43 and the P/B ratio is finally 1.68. The dividend yield amounts to 3.38 percent and the beta ratio has a value of 1.01.
Here is the full table with some fundamentals (TTM):
Related stock ticker symbols:
LEG, WAG, MSA, SJW, SWK, AFL, MMM, ITW, TGT, VFC, TROW, MHP, PNR, TNC, LOW,
CTAS, GRC, CSL, VAL, SCL, FDO, NDSN, BEN
I am long WAG. 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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