The hunt for bargains can be a never-ending quest. Analysts are
bullish on the following dividend payers, judging by the consensus
recommendations to buy shares and the mean price targets that imply
upside potential. These possibly undervalued stocks have low P/E
and PEG ratios, EPS and sales growth over the past five years and
anticipated EPS growth over the next five. These stocks also all
have pulled back at least 2 percent in the past month, offering
potential entry points.
Cenovus Energy (NYSE:
) is well off its 52-week high but has popped more than 7 percent
in the past week. The Canadian integrated oil company posted strong
second-quarter results due to "increases in oil production
favourable refining results." The $24.7 billion market cap company
has a dividend yield of about 2.7 percent and an operating margin
that is better than the industry average. Short interest is less
than 1 percent of the float, and the mean price target is a couple
of bucks higher than the 52-week high.
Like other defense contractors, General Dynamics (NYSE:
) pulled back in late spring and has traded mostly between $62 and
$66 per share since then. But the analysts' mean price target is
$74.14 which is near the 52-week high. This S&P 500 component
has a market cap greater than $22 billion and a dividend yield of
more than 3 percent. The operating margin is higher than those of
peers such as Boeing (NYSE:
) and Textron (NYSE:
). Short interest is a little more than 1 percent of the float.
Giant Interactive Group (NYSE:
) is up more than 4 percent this week after reporting
better-than-expected second-quarter EPS. The Shanghai-based online
game developer has a market cap near $1.1 billion and a dividend
yield of about 6.5 percent. Its return on equity is more than 20
percent. The mean target price is about 27 percent higher than the
current share price, and higher than the 52-week high as well. Over
the past six months, the stock has outperformed competitor Perfect
World (NASDAQ: ) and the broader markets.
Potash Corp. of Saskatchewan (NYSE: ) fell about 6 percent after
it released disappointing second-quarter earnings and lowered its
full-year EPS outlook. The return on equity of this fertilizer
producer is a healthy 30.3 percent and its long-term EPS growth
forecast is more than 12 percent. The company has a market cap near
$37 billion. 20 out of 27 analysts polled by Thomson First Call
recommend buying shares. Their mean price target is about 20
percent higher than the current share price.
Shares of Stepan Company (NYSE: ) had started to drop even
before it reported disappointing second-quarter earnings in July,
but the share price is up more than 3 percent in the past week.
This chemical manufacturer has a market cap of about $960 million
and a long-term EPS growth forecast of about 15 percent. The mean
price is more than 16 percent higher than the current share price.
Even with the recent pullback, over the past six months the stock
has outperformed the broader markets.
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