I currently track 100 dividend stocks in my D4L-Dashboard and have determined some of the lower rated stocks could be buys if the companies simply chose to increase their dividends. For various reasons their management has elected keep a low payout ratio and deploy the excess cash elsewhere.
To identify these stingy companies, I used the following criteria on the companies I track:
Here are seven stocks out of the 100 that I track meeting the above criteria:
Aflac Incorporated (AFL) - 4-Stars - Analysis
Aflac Incorporated engages in the marketing and sale of supplemental health and life insurance plans in the United States and Japan.
C.R. Bard Inc. (BCR) - 4-Stars
Bard (C.R.) Inc is a diversified producer of therapeutic and diagnostic medical devices has exposure to the vascular, urology, oncology, and specialty surgical markets.
Franklin Resources Inc. (BEN) - 2 Stars
Franklin Resources Inc. is one of the world's largest asset managers, serving retail, institutional and high-net-worth clients.
Donaldson Company (DCI) - 3 Stars - Analysis
Donaldson Company operates as a worldwide manufacturer of filtration systems and replacement parts.
General Dynamics (GD) - 2 Stars - Analysis
General Dynamics is the world's sixth largest military contractor and also one of the world's biggest makers of corporate jets.
Lancaster Colony (LANC) - 2 Stars
Lancaster Colony is a diversified Ohio-based company manufactures and markets consumer products; glassware and candles; and automotive accessories.
Walgreen Co. (WAG) - 3 Stars - Analysis
Walgreen Co is the largest U.S. retail drug chain in terms of revenues. It sells prescription and non-prescription drugs, beauty care, personal care, household items, candy, photofinishing, greeting cards, seasonal items and convenience foods.
You could view this from a positive perspective and say the above dividends should be very safe and the companies are in an excellent position to continue to raising them each year. In dividend investing, cash is king, but at some point management has to be willing to share it with the company's owners.
Full Disclosure: Long AFL. See a list of all my income holdings here.
Related Articles:
Seven Dividend Stocks Hoarding The Cash
Posted by D4L | Sunday, August 30, 2009 | commentary | 0 comments »________________________________________________________________
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