Analyzing 5 Big Dividend Stocks for Buy Ideas
Robert is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
European stock markets rallied on Thursday following positive government bond sales by France and Spain despite downgrades for the major eurozone economies. Sentiment was also boosted by positive US economic data and International Monetary Fund plans to stock its reserves for crisis shifting. Chances of growing optimism among officials over cutting a crucial debt deal with private creditors are predictable. In the following article, I identify five dividend paying stocks that, on a relative value and growth basis, are selling at a discount to their peers. The companies pay a constant stream of dividends that have substantial coverage with cash and cash flows and have the ability to retain strategic and competitive advantages over their peers in their industries. Use this analysis as a preliminary thought for your own due diligence.
France Telecom S.A. (NYSE: FTE): Shares are trading around $15 at the time of writing, against their 52 – week trading range of $14.62 to $23.70. At the current market price, the company is capitalized at $39.53 billion. Earnings per share for the last year were $1.5, and it paid a dividend of $1.37, yielding 9.2%. France Telecom S.A. is the main telecommunications company in France, the third largest in Europe and one of the largest in the world. Orange is the key brand of France Telecom. With the announcement of its industrial project “Conquests 2015”, Orange is repeatedly signaling its shareholders, as well as the employees a concrete financial situation, through the deployment of a network infrastructure upon which the group will build its future growth. However its competitor, Siemens AG American Depository offers much more protection on dividends and has a higher dividend payout policy. Last year Siemens paid a dividend of $2.95, yielding 3%. The future acquisition, mergers and to be launched projects seem to be bright for France Telecom S.A. I suggest investors do their own diligence if they are willing to buy the stock for its dividend yield of 9.2% against Siemens 3%.
Enterprise Products Partners L. (NYSE: EPD): Enterprise Products Partners LP is the largest publicly-traded energy partnership and leading North American provider of midstream energy services. The stock traded at $49 at the time of writing, and has a 5.1% dividend yield. The stock has a market cap of $42.40 billion, price to earnings ratio of 25.04 and operating margin of 6.29%. Earnings per share for the last year were $1.94. Several new construction projects are being developed that are expected to extend Enterprise’s natural gas and natural gas liquid (NGL) infrastructure as well as crude oil in the Eagle Ford Shale play, located in South Texas. Investors should opt for its dividend yield of 5.1% versus no dividend yield in case of its competitor TULLOW OIL (TLW.L), a realistic price to earnings ratio of 25.04 versus 4293.38 and higher earnings per share of 1.94 versus 0.32.
Vodafone Group Plc (NASDAQ: VOD): Shares are trading around $27 at the time of writing, against their 52 – week trading range of $24.31 to $29.75. At the current market price, the company is capitalized at $141.94 billion. Earnings per share for the last year were $2.12, and it paid a dividend of $0.97, yielding 3.60%. Verizon Communications, a hard-hitting competitor of Vodafone Group, on the contrary, has managed to secure a higher operating margin of 22.35% versus 14.49%. France Telecom, on the other hand, views the dividend decision as quite important, because it determines what funds flow to investors and what funds are retained by the firm for reinvestment. Siemens AG American Depository conversely offers much more protection on dividends and has a higher paying dividend policy. Last year Siemens paid a dividend of $2.95, yielding 3%. I suggest investors do their own diligence if they are willing to buy the stock for its dividend of $0.97 against France Telecom’s $1.37.
Procter & Gamble Company (NYSE: PG): In trading on Friday, shares of Procter & Gamble Company jumped above their previous close of $66.08 changing hands as high as $66.23 per share, against their 52 – week trading range of $57.56 to $67.72. At the current market price, the company is capitalized at $182.22 billion. Earnings per share for the last year were $3.94, and it paid a dividend of $2.1, yielding 3.2%. P&G offers multinational product ranges including personal care, household cleaning, laundry detergents, prescription drugs and disposable products. It has the ability to reimburse a superior dividend, a healthier dividend protection policy, and higher earnings per share versus its competitor, Enterprise Products Partners L. (EPD). Enterprise Products paid a dividend of $1.94 last year, quite inferior than P&G’s dividend payout. P&G has been paying a dividend for 121 consecutive years since its incorporation in 1890 and has increased its dividend for 55 consecutive years at an annual compound average rate of approximately 9.5%. I suggest investors do their own diligence if they are willing to buy P&G for growth and income.
Pfizer, Inc. (PFE): Shares are trading around $22 at the time of writing, against their 52 – week trading range of $16.63 to $22.17. At the current market price, the company is capitalized at $168.34 billion. Earnings per share for the last year were $1.44, and it paid a dividend of $0.88, yielding 4%. The world's largest research-based pharmaceutical company Pfizer has announced the launch of www.nutritionpossible.com, a new website that provides simple tools and personalized information to make confident nutritional and lifestyle choices. Millions of resolutions come with every New Year, many of which are to get healthy. Pfizer is incessantly functioning towards a healthier environment, and with the announcement of its innovative project, Pfizer has a lot of potential to pay out future dividends, and a better dividend protection policy. On the contrary, its competitor, Glaxco (NYSE: GSK)a dividend of $2.17, yielding 4.8%, and has lower earnings per share of $1.01 versus $1.44. I suggest investors do their own diligence if they are willing to buy the stock for its dividend of $0.88 followed by higher earnings per share of $ 1.44 versus $1.01.
Motley Fool newsletter services recommend Enterprise Products Partners L.P., France Telecom (ADR), GlaxoSmithKline, The Procter & Gamble Company and Vodafone Group Plc (ADR). The Motley Fool owns shares of GlaxoSmithKline. Vatalyst has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.