Dividends4Life: Dividend Stocks Undervalued by EPS Trends

Dividend Stocks Undervalued by EPS Trends

Posted by D4L | Wednesday, August 22, 2012 | | 0 comments »

Do you prefer stocks that appear to be attractively priced? We ran a screen with that idea in mind. We began by screening for dividend stocks: those paying dividend yields above 2% and sustainable payout ratios below 50%. We then screened for those rallying above their 20-day, 50-day, and 200-day moving averages. Finally, we screened for stocks that may be undervalued, by comparing price trends to changes in EPS estimates over the last month.

Based on the assumption that P/E is equal to a constant k, increases in EPS should be matched by increases in price. When they don’t match up, a mispricing may have occurred. We screened for stocks with faster growth in EPS estimates than price over the last month, which may indicate that these names are being undervalued. Community Trust Bancorp Inc. (CTBI), Flushing Financial Corp. (FFIC), WPP plc (WPPGY), Great Southern Bancorp Inc. (ISLE) and Shenandoah Telecommunications Co. (SHEN).

Source: Kapitall Wire

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