During the past week, GuruFocus recognized two additional companies as dividend growers. In order to be qualified for this list, the company had to:
- Have a dividend 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:
Pearson PLC (PSO)
On March 5, Pearson PLC declared a dividend of $0.533 per share, representing 4.20% dividend yield for the company. This dividend is payable on May 7 to shareholders of the record at the close of business on April 4, 2014.
The company’s historical dividend growth is as follows:
- 10-year: 7.00%
- 5-year: 7.50%
- 3-year: 7.90%
Pearson PLC is engaged in the international media businesses covering education, business information and consumer publishing. Its business segments are North American Education, International Education, Professional and FT Group.
Pearson’s historical revenue and net income:
The analysis on Pearson reports that the company has issued GBP218 million of debt over the past year and that they have a poor buyback record. On the other hand it notes that the company’s operating margin is expanding, its dividend yield is near a 3-year high and its P/B and P/S ratios are trading at 3-year lows.
The company announced yesterday that it had been selected by Microsoft (MSFT) as the official distributor of Microsoft Press products. Pearson will be in charge of this material on April 1.
There are currently two gurus that hold a position in PSO. Check out their holding histories here.
The Peter Lynch Chart suggests that the company is currently overvalued:
Pearson has a market cap of $13.72 billion. Its shares are currently trading at around $16.76 with a P/E ratio of 24.60, a P/S ratio of 1.60 and a P/B ratio of 1.40. The dividend yield of Pearson is 4.20% and the company has seen an annual average earnings growth of 6.00% over the past ten years.
Icahn Enterprises (IEP)
On March 4, Icahn Enterprises declared a dividend of $1.50 per share, representing 4.50% dividend yield for the company. This dividend is payable on April 22 to shareholders of the record at the close of business on March 13, 2014.
The company’s historical dividend growth is as follows:
- 10-year: 0.00%
- 5-year: 24.00%
- 3-year: 66.40%
Icahn Enterprises is a diversified holding company owning subsidiaries engaged in the following continuing operating businesses: Investment, Automotive, Gaming, Railcar, Food Packaging, Metals, Real Estate and Home Fashion. The company owns a 99% limited partner interest in Icahn Enterprises Holdings L.P., or Icahn Enterprises Holdings.
Icahn Enterprises’ historical revenue and earnings growth:
The analysis on Icahn Enterprises reports that the company has issued $600 million of debt over the past three years, its asset growth is faster than its revenue growth and that its dividend yield is at a 10-year.
Carl Icahn (Trades, Portfolio) and Murray Stahl (Trades, Portfolio) are the only gurus with positions in Icahn Enterprises.
The Peter Lynch Chart suggests that the company is currently undervalued:
Icahn Enterprises has a market cap of $12.89 billion. Its shares are currently trading at around $110.24 with a P/E ratio of 12.30, a P/S ratio of 0.60 and a P/B ratio of 2.10. The company had an annual average earnings growth of 6.40% 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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