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 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:
On March 28, AT&T declared a dividend of $0.46 per share, representing 5.16% dividend yield for the company. This dividend is payable on May 1 to shareholders of the record at the close of business on April 10, 2014.
The company’s historical dividend growth is as follows:
- 10-year: 3.10%
- 5-year: -0.70%
- 3-year: 2.10%
AT&T is a communications holding company. Its subsidiaries and affiliates are the providers of AT&T services in the U.S. and internationally. The company holds a portfolio of the nation’s fastest and most reliable 4G LTE network, wireless internet, Wi-Fi and voice and cloud-based services.
AT&T’s historical revenue and net income:
The company most recently announced their fourth quarter results which highlighted:
- $1.31 diluted EPS, up from $(0.68) diluted EPS last year.
- Fourth quarter revenues up 1.8% to $33.2 billion.
- Nearly $23 billion returned to shareholders through buybacks and dividends in 2013.
- More than 2 million new broadband connections added in the fourth quarter.
The analysis on AT&T reports that the company’s price is near a 5-year high, it has issued $12.6 billion in debt over the past three years and its operating income has been in loss over the past three years. On the other hand the analysis also notes that the Piotroski F-Score is high, its dividend yield is near a 2-year high and its P/E, P/S and P/B ratios are all trading at around historical lows.
The Peter Lynch Chart suggests that the company is currently undervalued:
AT&T has a market cap of $182.6 billion. Its shares are currently trading at around $35.07 with a P/E ratio of 10.40 and a P/S ratio of 1.50. The company had an annual average earnings growth of 4.10% over the past ten years.
Freeport-McMoRan Copper & Gold (FCX)
On March 26, Freeport-McMoRan Copper & Gold declared a dividend of $0.313 per share, representing 3.80% dividend yield for the company. This dividend is payable on May 1 to shareholders of the record at the close of business on April 15, 2014.
The company’s historical dividend growth is as follows:
- 10-year: 0.00%
- 5-year: 0.00%
- 3-year: 40.60%
Freeport-McMoRan is a U.S.-based natural resource company with an industry leading global portfolio of mineral assets, significant oil and gas resources and a growing production profile.
Freeport-McMoRan’s historical revenue and net income:
The analysis on Freeport-McMoRan reports that the company’s asset growth is faster than its revenue growth and its P/S ratio is close to a 2-year low.
The Peter Lynch Chart shows that the company is currently undervalued:
Freeport-McMoRan Copper & Gold has a market cap of $34.34 billion. Its shares are currently trading at around $33.07 with a P/E ratio of 12.60, a P/S ratio of 1.60 and a P/B ratio of 1.50. The dividend yield for the company is currently sitting at 3.80%.
To view a complete list of high yielding dividend stocks found among the gurus’ portfolios, click here.
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