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Thursday, November 18, 2010

7 value stocks that just increased dividends

Now that the Fed has rolled out QE2, many investors are surprised that bonds have been struggling, especially the longer maturities. Those ETFs that hold 20 and 30 year Treasuries and corporate bonds, for example, have been especially weak. While this has resulted in higher yields it is having the unfortunate effect of decreasing the capital gains that investors have enjoyed after a multi-month run-up in prices. This is making life complicated for dividend and income investors.

Among the features of the Alert HQ Premium site there are several stock screens that focus on dividends. In particular, I will be identifying those stocks that just raised their dividend during the previous week and yet are still more or less in the value stock category.

The following list is from this weekend's screen:

Symbol Name Last Price EV to EBITDA PE Ratio Price to Sales New Dividend Yield New Annual Dividend Old Annual Dividend
AFSI AmTrust Financial Services, Inc. 16.27 7.1 8.13 1.17 1.97% 0.32 0.28
DDIC DDi Corp. 10.56 6.89 13.09 0.89 3.79% 0.40 0.24
LFUS Littelfuse, Inc. 44.01 8.28 17.96 1.81 1.36% 0.60 0
LINC Lincoln Educational Services Corporation 14.91 2.59 5.97 0.61 6.71% 1.00 0
MHLD Maiden Hldgs Ltd 7.68 5.78 8.69 0.5 3.65% 0.28 0.26
PFG Principal Financial Group Inc 28.34 8.81 15.32 1.02 1.94% 0.55 0.50
PH Parker-Hannifin Corporation 79.39 9.53 18.26 1.24 1.46% 1.16 1.08

Many of these stocks have been discovered by investors and are in solid up-trends.  AmTrust Financial Services, DDi Corp, Littelfuse, Principal Financial Group and Parker-Hannifin all fall into this category.

One is beginning to recover from a sell-off:  Lincoln Educational Services which I recently wrote about in the post titled "For-profit education stocks -- throwing Lincoln Educational Services out with the bathwater?".

Then we have Maiden Hldgs. This stock seems to have been consolidating for a couple of months now. It was threatening to break out when the recent pull-back began. After today's gains, it is now positioned for a breakout again.

This list of stocks fits the bill for anyone who considers themselves to be value investors but who want the safety of dividends and a bit of momentum, too. For the most part, then, these stocks have three important things going for them:
  • Rising dividends which are generally an indication that management considers the company's financial position to be strong 
  • Reasonable valuations indicating the stocks are not particularly over-priced
  • Rising trend-lines that are an indication that the market has some confidence in these stocks
As such, these seven stocks are good candidates for income investors and value investors alike.

NOTE: To see the original page from which this list came, click on this link to see Value Stocks with increasing Dividends. The value criteria are also included on the page along with market cap and price data and you can download the list into Excel.

Disclosure: no positions in any of the stocks listed

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