Each of these companies have seen several expansions and contractions in the economy over the years that affected their sales and profits yet each of them continued to increase their dividends each and every year. For me that is a huge plus when deciding on whether or not to accumulate shares of the companies. This is done despite the fact that during some years revenues and earnings can be quite volatile. The result is that dividends are often increased by distributing an increasing proportion of the company's earnings. This can be seen in the changing payout ratios in various annual reports.
When the fundamentals of a company change from year to year, or quarter to quarter, the price of the stock is affected too. Smart investors realize this and take advantage of these changes and buy more shares during pullbacks in stock prices. The four stocks below have all pulled back since the beginning of the year for their own reasons. Chevron Corp and ExxonMobil Corp have fallen simply because of the falling price of oil. Proctor and Gamble is going through a reorganization and jettisoning dozens of their product lines. Walmart is under intense competition from other retailers as well as a persistently bad economy affecting their customers more than usual.
(Summary) (Company) (Daily Chart)
25 June 2015 Price $98.34 1yr Target $113.00 Analysts 19 1yr Cap Gain 14.90% Dividend $4.28 Yield 4.35% 1yr Tot Return 19.25% 1yr EarnGR -8.57% 3yr EarnGR -8.88% 5yr EarnGR 14.11% 1yr DivGR 7.00% 3yr DivGR 10.29% 5yr DivGR 9.73% | Market Cap $184.93 Bil Beta 1.15 EPS (ttm) $9.14 Payout Ratio 46.82% EPS next yr $6.27 P/E 10.76 PEG --- Forward P/E 15.68 Debt/Equity 0.22 ROA 6.50% ROE 11.10% ROI 6.40% Sales $181.50 Bil Income $17.30 Bil Profit Margin 9.53% |
(Summary) (Company) (Daily Chart)
25 June 2015 Price $83.93 1yr Target $93.67 Analysts 18 1yr Cap Gain 11.60% Dividend $2.92 Yield 3.47% 1yr Tot Return 15.07% 1yr EarnGR 3.12% 3yr EarnGR -3.33% 5yr EarnGR 13.81% 1yr DivGR 9.52% 3yr DivGR 13.50% 5yr DivGR 10.43% | Market Cap $350.92 Bil Beta 0.85 EPS (ttm) $6.66 Payout Ratio 43.84% EPS next yr $5.35 P/E 12.60 PEG --- Forward P/E 15.69 Debt/Equity 0.19 ROA 8.10% ROE 16.00% ROI 7.90% Sales $357.10 Bil Income $28.36 Bil Profit Margin 7.94% |
(Summary) (Company) (Daily Chart)
25 June 2015 Price $79.39 1yr Target $88.06 Analysts 17 1yr Cap Gain 10.92% Dividend $2.65 Yield 3.33% 1yr Tot Return 14.25% 1yr EarnGR 3.88% 3yr EarnGR 0.66% 5yr EarnGR -1.21% 1yr DivGR 7.32% 3yr DivGR 7.32% 5yr DivGR 8.18% | Market Cap $215.39 Bil Beta 0.47 EPS (ttm) $3.37 Payout Ratio 78.63% EPS next yr $4.18 P/E 23.56 PEG 3.50 Forward P/E 18.99 Debt/Equity 0.53 ROA 6.40% ROE 13.70% ROI 11.70% Sales $78.11 Bil Income $9.60 Bil Profit Margin 12.29% |
(Summary) (Company) (Daily Chart)
25 June 2015 Price $71.86 1yr Target $80.50 Analysts 22 1yr Cap Gain 12.02% Dividend $1.96 Yield 2.72% 1yr Tot Return 14.74% 1yr EarnGR 3.48% 3yr EarnGR 3.72% 5yr EarnGR 6.36% 1yr DivGR 2.08% 3yr DivGR 7.14% 5yr DivGR 10.12% | Market Cap $231.43 Bil Beta 0.42 EPS (ttm) $4.89 Payout Ratio 40.08% EPS next yr $5.01 P/E 14.70 PEG 3.39 Forward P/E 14.35 Debt/Equity 0.66 ROA 9.70% ROE 25.00% ROI 14.60% Sales $485.52 Bil Income $15.84 Bil Profit Margin 3.26% |
My Perspective
It may be true that the world really has changed this time around and that these companies will never be the same, but I doubt it. These four companies have been great companies in the past, they've dealt with significant changes in the economy and they've not only survived, but flourished. And I believe they'll once again become great companies in the future. It is simply their present situation that is causing them temporary troubles. I believe these companies will solve these short term problems in the near future.
As a Dividend Growth Investor these are the kind of situations I constantly look for when doing my research. They present unique situations that I can often take advantage of. These four companies are currently paying outstanding dividends. The dividend yield is higher than normal simply because the stocks have pulled back in price. And even though I already own shares in each of these companies, I intend to double up my efforts and accumulate even more shares. Smart investors buy great companies like these to hold for years and years, and allow the dividends to be reinvested.
When great companies goes on sale and dividend yields head higher, I like to accumulate those shares. I believe these four companies are now on sale.