12 Dividend Challengers With Huge Potential To Become A Dividend Hero

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Sep 15, 2012
Best Dividend Challengers Researched By “long-term-investments.blogspot.com”. Dividend Challengers are stocks with a history of rising dividends of more than 5 years in a row but less than 10 years. 190 companies have fulfilled these dividend growth criteria but only a few have the potential to become a big dividend growth stock like Coca Cola or Procter&Gamble.

In order to find the best dividend paying growth stocks from the investment class Dividend Challengers, I screened all companies with a positive dividend yield, great earnings per share growth of more than 10 percent as well an operating margin over 15 percent. To get the best results in terms of low debt and high cash, the debt to equity ratio should be under 0.5. Twelve Dividend Challengers remained of which nine are currently recommended to buy.

Here are my favorite stocks:

Intel Corporation (INTC) has a market capitalization of $116.92 billion. The company employs 100,800 people, generates revenue of $53,999.00 million and has a net income of $12,942.00 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $23,409.00 million. The EBITDA margin is 43.35 percent (operating margin 32.12 percent and net profit margin 23.97 percent).

Financial Analysis: The total debt represents 10.31 percent of the company’s assets and the total debt in relation to the equity amounts to 15.97 percent. Due to the financial situation, a return on equity of 27.15 percent was realized. Twelve trailing months earnings per share reached a value of $2.36. Last fiscal year, the company paid $0.78 in form of dividends to shareholders. The earnings are expected to grow by 10.72 percent for the upcoming five years.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 9.90, P/S ratio 2.16 and P/B ratio 2.54. Dividend Yield: 3.85 percent. The beta ratio is 1.07.

Union Pacific (UNP) has a market capitalization of $60.83 billion. The company employs 45,797 people, generates revenue of $19,557.00 million and has a net income of $3,292.00 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $7,336.00 million. The EBITDA margin is 37.51 percent (operating margin 29.24 percent and net profit margin 16.83 percent).

Financial Analysis: The total debt represents 19.75 percent of the company’s assets and the total debt in relation to the equity amounts to 47.94 percent. Due to the financial situation, a return on equity of 18.12 percent was realized. Twelve trailing months earnings per share reached a value of $7.73. Last fiscal year, the company paid $1.93 in form of dividends to shareholders. The earnings are expected to grow by 13.88 percent for the upcoming five years.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 16.61, P/S ratio 3.06 and P/B ratio 3.27. Dividend Yield: 1.90 percent. The beta ratio is 1.17.

Covidien (COV) has a market capitalization of $28.34 billion. The company employs 41,300 people, generates revenue of $11,574.00 million and has a net income of $1,883.00 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $2,974.00 million. The EBITDA margin is 25.70 percent (operating margin 20.52 percent and net profit margin 16.27 percent).

Financial Analysis: The total debt represents 20.65 percent of the company’s assets and the total debt in relation to the equity amounts to 42.86 percent. Due to the financial situation, a return on equity of 20.04 percent was realized. Twelve trailing months earnings per share reached a value of $3.89. Last fiscal year, the company paid $0.83 in form of dividends to shareholders. The earnings are expected to grow by 10.34 percent for the upcoming five years.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 15.17, P/S ratio 2.40 and P/B ratio 2.84. Dividend Yield: 1.56 percent. The beta ratio is 0.84.

Visa (V) has a market capitalization of $108.90 billion. The company employs 7,500 people, generates revenue of $9,188.00 million and has a net income of $3,646.00 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $5,744.00 million. The EBITDA margin is 62.52 percent (operating margin 59.38 percent and net profit margin 39.68 percent).

Financial Analysis: The total debt represents 0.00 percent of the company’s assets and the total debt in relation to the equity amounts to 0.00 percent. Due to the financial situation, a return on equity of 14.19 percent was realized. Twelve trailing months earnings per share reached a value of $1.01. Last fiscal year, the company paid $0.60 in form of dividends to shareholders. The earnings are expected to grow by 19.68 percent for the upcoming five years.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 132.57, P/S ratio 11.92 and P/B ratio 4.15. Dividend Yield: 0.65 percent. The beta ratio is 0.77.

Take a closer look at the full table of the best dividend paying Dividend Challengers with low debt and high growth. The average price to earnings ratio (P/E ratio) amounts to 18.94 and forward P/E ratio is 16.99. The dividend yield has a value of 1.61 percent. Price to book ratio is 3.85 and price to sales ratio 3.44. The operating margin amounts to 22.52 percent and the beta ratio is 1.09. The average stock has a debt to equity ratio of 0.28.

Related stock ticker symbols:

INTC, NRCI, HUB-B, UNP, TLM, THI, COV, MSM, NEU, ALTR, V, HEI

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· 20 Dividend Challengers With Very Low Debt

· 12 Dividend Challengers With Highest Recent Growth

· Best Recommended High Yield Dividend Challengers