Dividend Yield | Oct 14, 2013 05:54AM ET
The basic material sector is not currently popular in the capital market. Over the past year, shares from the sector are the worst performing asset classes on the market.
But that does not mean that you cannot make money with basic material stocks. If you are a long-term investor, you should definitely find some good stocks with a cheap valuation. But be careful, raw materials are also more cyclical than consumer or healthcare companies.
Today I would like to continue my monthly screen of dividend stocks with low debt ratios and little dividend payments. I look at stocks from the basic material sector with a dividend payout ratio of less than 20 percent of earnings as well as a debt to equity ratio under 0.2.
Eleven stocks fulfilled these criteria of which eight are currently recommended to buy. Agrichemicals and specialty chemical companies are the dominating player on the list.
Monsanto (MON) has a market capitalization of $56.82 billion. The company employs 21,500 people, generates revenue of $14.861 billion and has a net income of $2.514 billion. Monsanto’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $10.778 billion. The EBITDA margin is 72.53 percent (the operating margin is 72.53 percent and the net profit margin 16.92 percent).
Twelve trailing months earnings per share reached a value of $4.56. Last fiscal year, Monsanto paid $1.27 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 23.37, the P/S ratio is 3.82 and the P/B ratio is finally not calculable. The dividend yield amounts to 1.61 percent and the beta ratio has a value of 1.00.
Here is the full table with some fundamentals (TTM):
Disclosure: 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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