My 4 Favorite Picks from Last Week's Dividend Growth Stocks

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Oct 29, 2012
Here is a current sheet of companies that have announced a dividend increase within the recent week.


In total, 74 stocks and funds raised dividends, 31 of which had a dividend growth of more than 10 percent. The average dividend growth amounts to 49.89 percent. Exactly 25 stocks/funds have a yield over five percent (a high yield); 39 have yields above three percent. 38 are currently recommended to buy.


Visa (V) is a large cap stock with the highest dividend hike. The company announced to increase dividends by 50 percent, from 22 to 33 cents per share. The business service company is on a very good growth path. The company grew yearly by 25.53 percent over the recent five years in sales and 44.62 percent in earnings per share. At the current earnings per share, the payout ratio is expected at 18.4 percent. In addition, there is no long-term debt.


Another good large cap company with recent dividend growth is AFLAC (AFL, Financial). The company is also low leveraged and has a good long-term business growth. The recent dividend hike of 6.1 percent was not as high as it should be but still high enough to compensate inflation costs. The payout ratio at the new level amounts to 25.64 percent. Regard the low geographical diversification. The company is a big insurer in Japan. 77.46 percent of sales are generated in Asia/Pacific and 25.54 percent in Americas.


Here are my favorite stocks with fast dividend growth:


AFLAC Inc. (AFL) has a market capitalization of $23.24 billion. The company employs 8,562 people, generates a revenue of $22.2 billion and has a net income of about $2 billion. The firm's earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to about $7 billion. The EBITDA margin is 30.49 percent (the operating margin is 13.5 percent and the net profit margin is 8.86 percent).


Financial Analysis: The total debt represents 2.81 percent of the company's assets and the total debt in relation to the equity amounts to 24.32 percent. Due to the financial situation, a return on equity of 15.99 percent was realized. Twelve trailing months earnings per share reached a value of $6.04. Last fiscal year, the company paid $1.23 in the form of dividends to shareholders. The company announced to raise dividends by 6.1 percent.


Market Valuation: Here are the price ratios of the company: The P/E ratio is 8.21, the P/S ratio is 1.05 and the P/B ratio 1.71. The dividend yield is 2.82 percent. The beta ratio is 1.82.


The Hershey Company (HSY) has a market capitalization of $15.69 billion. The company employs 11,800 people, generates a revenue of $6.1 billion and has a net income of $629 million. The firm's earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1.3 billion. The EBITDA margin is 20.9 percent (the operating margin is 17.35 percent and the net profit margin 10.34 percent).


Financial Analysis: The total debt represents 42.79 percent of the company's assets and the total debt in relation to the equity amounts to 222.39 percent. Due to the financial situation, a return on equity of 71.83 percent was realized. Twelve trailing months earnings per share reached a value of $2.86. Last fiscal year, the company paid $1.38 in the form of dividends to shareholders. The company announced to raise dividends by 10.5 percent.


Market Valuation: Here are the price ratios of the company: The P/E ratio is 24.28, the P/S ratio is 2.39 and the P/B ratio is 18.39. The dividend yield is 2.42 percent. The beta ratio is 0.27.


V.F. Corp. (VFC) has a market capitalization of $17 billion. The company employs 58,000 people, generates a revenue of $9.5 billion and has a net income of $891 million. The firm's earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1.4 billion. The EBITDA margin is 14.95 percent (the operating margin is 13.16 percent and the net profit margin is 9.41 percent).


Financial Analysis: The total debt represents 22.72 percent of the company's assets and the total debt in relation to the equity amounts to 46.76 percent. Due to the financial situation, a return on equity of 21.18 percent was realized. Twelve trailing months earnings per share reached a value of $9.01. Last fiscal year, the company paid $2.61 in the form of dividends to shareholders. The company announced to raise dividends by 20.8 percent.


Market Valuation: Here are the price ratios of the company: The P/E ratio is 17.16, the P/S ratio is 1.80 and the P/B ratio is 3.78. The dividend yield is 2.25 percent. The beta ratio is 0.92.


Visa (V) has a market capitalization of $112.19 billion. The company employs 7,500 people, generates a revenue of $9.2 billion and has a net income of $3.6 billion. The firm's earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $5.7 billion. The EBITDA margin is 62.52 percent (the operating margin is 59.38 percent and the net profit margin 39.68 percent).


Financial Analysis: The total debt represents zero percent of the company's assets and the total debt in relation to the equity amounts to zero 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 the form of dividends to shareholders. The company announced it would raise its dividend by 50 percent.


Market Valuation: Here are the price ratios of the company: The P/E ratio is 136.58, the P/S ratio is 12.21 and the P/B ratio is 4.25. The dividend yield is 0.95 percent. The beta ratio is 0.77.


Take a closer look at the full table of stocks with recent dividend hikes. The average dividend growth amounts to 49.89 percent and the average dividend yield amounts to 4.27 percent. Stocks from the sheet are valuated with a P/E ratio of 23.69. The average P/S ratio is 5.51 and the P/B ratio is 4.09.