During the past week, GuruFocus recognized two companies as dividend growers. In order to be qualified for this list, the company had to:
· Have a dividend yield of greater than 3%.
· Have a strong history of stable and increasing dividends.
· Maintain Guru ownership.
· Have a market cap of greater than $10 billion.
The following two companies come from various industries and sectors of the market, but they all fit the necessary criteria needed to qualify them as dividend growers.
A comparison of the companies’ historical dividend growth:
Merck & Co Inc (MRK)
On Nov. 27, Merck & Co declared a dividend of $0.44 per share, representing a 3.50% dividend yield for the company. This dividend is payable on Jan. 8 to shareholders of the record at the close of business on Dec. 16, 2013.
The company’s historical dividend growth is as follows:
· 10-year: 1.30%
· 5-year: 2.40%
· 3-year: 3.60%
This is the first dividend increase since Nov. 2012, when the Board raised the dividend to $0.43 per share.
Chairman and CEO Kenneth Frazier said, “This increase in our dividend reflects our focus on creating value for shareholders and our confidence in Merck’s future as we increase productivity and invest in our most promising R&D opportunities.”
Merck & Co is a global health care company that delivers innovative health solutions through its prescription medicines, vaccines, biologic therapies, animal health, and consumer care products, which it markets directly and through its joint ventures.
Merck’s historical revenue and net income:
The analysis on Merck reports:
· The company has issued $8.7 billion of debt over the past three years.
· The revenue has been in decline over the past year.
· The price is sitting near a 5-year high.
· The company’s asset growth is currently faster than its revenue growth.
The Peter Lynch Chart suggests that the company is currently overvalued:
The company’s third quarter financial results highlighted:
· Non-GAAP EPS of $0.92, GAAP EPS of $0.38.
· Worldwide sales were $11 billion, down 4% due to an unfavorable impact of patent expires and a 2% negative impact from foreign exchange.
· Pharmaceutical sales declined 4% to $9.5 billion.
· Announced a global, multi-year initiative to sharpen the company’s R&D focus, targeting a net reduction annually of $2.5 billion by the end of 2015.
There are currently 35 gurus that hold a stake in Merck & Co.
Merck & Co has a market cap of $145.8 billion. Its shares are currently trading at around $49.90 with a P/E ratio of 33.40, a P/S ratio of 3.40 and a P/B ratio of 3.10. The company had an annual average earnings growth of 1.80% over the past ten years.
Seadrill Ltd (SDRL)
On Nov. 25, Seadrill declared a dividend of $0.95 per share, representing a 6.20% dividend yield for the company. This dividend is payable on Dec. 20 to shareholders of the record at the close of business on Dec. 5, 2013.
The company’s historical dividend growth is as follows:
· 10-year: 0.00%
· 5-year: 1.70%
· 3-year: 1.40%
Seadrill is an offshore drilling contractor. It provides drilling and well services to the offshore industry. It has a fleet of drilling units that is outfitted to operate in shallow water, mid-water and deepwater areas, in benign and harsh environments.
Seadrill’s historical revenue and net income:
The company recently announced a change of executive officers. The company’s Chief Accounting Officer and Senior VP Robert Hingley-Wilson is moving into a position at Fredriksen Group, and he is to be replaced by David Sneddon who most recently worked as the VP of Finance in Europe for Novelis Inc.
The company also recently announced its third quarter results which highlighted:
· EBITDA of $663 million.
· Net income of $315 million, or $0.61 per share.
· Economic utilization for floaters was 94%, in-line with last year.
· Revenues of $1.28 billion, up from $1.268 last year.
The analysis on Seadrill reports that the company’s price is near a 10-year high, its P/B ratio is near a 1-year low and over the past three years the company has issued $5 billion of debt.
The Peter Lynch Chart suggests that the company is currently undervalued:
Seadrill has a market cap of $20.28 billion. Its shares are currently trading at around $43.23 with a P/E ratio of 9.20, a P/S ratio of 4.20 and a P/B ratio of 2.70. The company had an annual average earnings growth of 48.00% over the past five years.
To view a complete list of high yielding dividend stocks found among the gurus’ portfolios, click here.
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· Have a dividend yield of greater than 3%.
· Have a strong history of stable and increasing dividends.
· Maintain Guru ownership.
· Have a market cap of greater than $10 billion.
The following two companies come from various industries and sectors of the market, but they all fit the necessary criteria needed to qualify them as dividend growers.
A comparison of the companies’ historical dividend growth:
Merck & Co Inc (MRK)
On Nov. 27, Merck & Co declared a dividend of $0.44 per share, representing a 3.50% dividend yield for the company. This dividend is payable on Jan. 8 to shareholders of the record at the close of business on Dec. 16, 2013.
The company’s historical dividend growth is as follows:
· 10-year: 1.30%
· 5-year: 2.40%
· 3-year: 3.60%
This is the first dividend increase since Nov. 2012, when the Board raised the dividend to $0.43 per share.
Chairman and CEO Kenneth Frazier said, “This increase in our dividend reflects our focus on creating value for shareholders and our confidence in Merck’s future as we increase productivity and invest in our most promising R&D opportunities.”
Merck & Co is a global health care company that delivers innovative health solutions through its prescription medicines, vaccines, biologic therapies, animal health, and consumer care products, which it markets directly and through its joint ventures.
Merck’s historical revenue and net income:
The analysis on Merck reports:
· The company has issued $8.7 billion of debt over the past three years.
· The revenue has been in decline over the past year.
· The price is sitting near a 5-year high.
· The company’s asset growth is currently faster than its revenue growth.
The Peter Lynch Chart suggests that the company is currently overvalued:
The company’s third quarter financial results highlighted:
· Non-GAAP EPS of $0.92, GAAP EPS of $0.38.
· Worldwide sales were $11 billion, down 4% due to an unfavorable impact of patent expires and a 2% negative impact from foreign exchange.
· Pharmaceutical sales declined 4% to $9.5 billion.
· Announced a global, multi-year initiative to sharpen the company’s R&D focus, targeting a net reduction annually of $2.5 billion by the end of 2015.
There are currently 35 gurus that hold a stake in Merck & Co.
Merck & Co has a market cap of $145.8 billion. Its shares are currently trading at around $49.90 with a P/E ratio of 33.40, a P/S ratio of 3.40 and a P/B ratio of 3.10. The company had an annual average earnings growth of 1.80% over the past ten years.
Seadrill Ltd (SDRL)
On Nov. 25, Seadrill declared a dividend of $0.95 per share, representing a 6.20% dividend yield for the company. This dividend is payable on Dec. 20 to shareholders of the record at the close of business on Dec. 5, 2013.
The company’s historical dividend growth is as follows:
· 10-year: 0.00%
· 5-year: 1.70%
· 3-year: 1.40%
Seadrill is an offshore drilling contractor. It provides drilling and well services to the offshore industry. It has a fleet of drilling units that is outfitted to operate in shallow water, mid-water and deepwater areas, in benign and harsh environments.
Seadrill’s historical revenue and net income:
The company recently announced a change of executive officers. The company’s Chief Accounting Officer and Senior VP Robert Hingley-Wilson is moving into a position at Fredriksen Group, and he is to be replaced by David Sneddon who most recently worked as the VP of Finance in Europe for Novelis Inc.
The company also recently announced its third quarter results which highlighted:
· EBITDA of $663 million.
· Net income of $315 million, or $0.61 per share.
· Economic utilization for floaters was 94%, in-line with last year.
· Revenues of $1.28 billion, up from $1.268 last year.
The analysis on Seadrill reports that the company’s price is near a 10-year high, its P/B ratio is near a 1-year low and over the past three years the company has issued $5 billion of debt.
The Peter Lynch Chart suggests that the company is currently undervalued:
Seadrill has a market cap of $20.28 billion. Its shares are currently trading at around $43.23 with a P/E ratio of 9.20, a P/S ratio of 4.20 and a P/B ratio of 2.70. The company had an annual average earnings growth of 48.00% over the past five years.
To view a complete list of high yielding dividend stocks found among the gurus’ portfolios, click here.
Try a free 7-day premium membership.
