4 Dividend Picks From The Dow Jones With Strong Long-Term Earnings Growth

By
A A A

Submitted by Dividend Yield as part of our contributors program .

Dow Jones Index Stocks With Highest Expected 5-Year Earnings Per Share Growth Researched By " long-term-investments.blogspot.com ". Some people might say that the Dow Jones in an index with slow growing value stocks with more or less stable dividends. The whole index is ex-growth and not rewarded by many growth investors. They search high growth within the technology sector on the NASDAQ or somewhere else, maybe in penny stocks. I will show you in this article, that the Dow Jones Index has more to offer than boring value stocks with flat dividends.

I made a screen of the 30 stocks from the Dow Jones and discovered those with a double-digit long-term growth rate, expected by analysts. Exactly for twelve companies is the upcoming earnings per share estimated to grow by more than ten percent yearly. Not bad for boring stocks with a huge portion of value. Of the results are ten with a current buy or better recommendation.

United Technologies ( UTX ) has a market capitalization of $71.55 billion. The company employs 199,900 people, generates revenue of $58.19 billion and has a net income of $5.37 billion. The firm's earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $9.39 billion. The EBITDA margin is 16.13 percent (the operating margin is 13.92 percent and the net profit margin 9.24 percent).

Financial Analysis: The total debt represents 16.70 percent of the company's assets and the total debt in relation to the equity amounts to 46.89 percent. Due to the financial situation, a return on equity of 23.02 percent was realized. Twelve trailing months earnings per share reached a value of $5.78. Last fiscal year, the company paid $1.86 in the form of dividends to shareholders. The earnings per share are expected to grow by 11.90 percent for the next five years.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 13.50, the P/S ratio is 1.23 and the P/B ratio is finally 3.24. The dividend yield amounts to 2.74 percent and the beta ratio has a value of 1.05.

Caterpillar ( CAT ) has a market capitalization of $56.04 billion. The company employs 132,825 people, generates revenue of $60.14 billion and has a net income of $5.01 billion. The firm's earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $9.59 billion. The EBITDA margin is 15.95 percent (the operating margin is 11.89 percent and the net profit margin 8.32 percent).

Financial Analysis: The total debt represents 42.47 percent of the company's assets and the total debt in relation to the equity amounts to 268.51 percent. Due to the financial situation, a return on equity of 41.57 percent was realized. Twelve trailing months earnings per share reached a value of $9.77. Last fiscal year, the company paid $1.82 in the form of dividends to shareholders. The earnings per share are expected to grow by 14.00 percent for the next five years.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 8.78, the P/S ratio is 0.93 and the P/B ratio is finally 4.31. The dividend yield amounts to 2.42 percent and the beta ratio has a value of 1.86.

The Home Depot ( HD ) has a market capitalization of $93.49 billion. The company employs 331,000 people, generates revenue of $70.40 billion and has a net income of $3.88 billion. The firm's earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $8.23 billion. The EBITDA margin is 11.70 percent (the operating margin is 9.46 percent and the net profit margin 5.52 percent).

Financial Analysis: The total debt represents 26.63 percent of the company's assets and the total debt in relation to the equity amounts to 60.27 percent. Due to the financial situation, a return on equity of 21.11 percent was realized. Twelve trailing months earnings per share reached a value of $2.80. Last fiscal year, the company paid $1.04 in the form of dividends to shareholders. The earnings per share are expected to grow by 14.54 percent for the next five years.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 22.17, the P/S ratio is 1.33 and the P/B ratio is finally 5.33. The dividend yield amounts to 1.87 percent and the beta ratio has a value of 0.82.

Walt Disney ( DIS ) has a market capitalization of $89.46 billion. The company employs 156,000 people, generates revenue of $40.89 billion and has a net income of $5.26 million. The firm's earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $9.64 billion. The EBITDA margin is 23.58 percent (the operating margin is 19.67 percent and the net profit margin 12.86 percent).

Financial Analysis: The total debt represents 19.78 percent of the company's assets and the total debt in relation to the equity amounts to 38.16 percent. Due to the financial situation, a return on equity of 12.84 percent was realized. Twelve trailing months earnings per share reached a value of $3.02. Last fiscal year, the company paid $0.60 in the form of dividends to shareholders. The earnings per share are expected to grow by 12.96 percent for the next five years.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 16.48, the P/S ratio is 2.19 and the P/B ratio is finally 2.35. The dividend yield amounts to 1.20 percent and the beta ratio has a value of 1.18.

Take a closer look at the full table of the fastest growing companies within the Dow Jones Index. The average P/E ratio amounts to 13.34 and forward P/E ratio is 12.48. The dividend yield has a value of 2.30 percent. Price to book ratio is 2.91 and price to sales ratio 1.31. The operating margin amounts to 14.46 percent. The average stock has a debt to equity ratio of 1.20.

Selected Articles:
· The Best Dogs Of The Dow Jones As Of October 2012
· 50 Top Stocks With The Highest Dividend Growth In October 2012
· 12 Cheapest Large Caps With Highest Expected Growth As Of October 2012
· The 20 Best Performing Dividend Aristocrats

*I am long UTX, GE. I receive no compensation to write about these specific stocks, sector or theme. I don't plan to increase or decrease positions or obligations within the next 72 hours.

For the other stocks: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I receive no compensation to write about any specific stock, sector or theme.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Stocks , US Markets

Referenced Stocks: CAT , DIS , HD , UTX

Trefis

Trefis

More from Trefis:

Related Videos

Stocks

Referenced

Most Active by Volume

82,105,634
  • $38.7369 ▼ 5.36%
80,732,291
  • $17.10 ▲ 0.88%
50,884,000
  • $90.0301 ▼ 4.11%
34,123,736
  • $100.79 ▼ 0.17%
33,257,640
  • $11.37 ▼ 5.25%
32,403,843
  • $5.195 ▼ 2.90%
31,879,338
  • $29.85 ▲ 1.08%
30,949,756
  • $98.74 ▼ 1.24%
As of 9/22/2014, 02:02 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com