It has been said time and again that a stock's price tag is
not a true indicator of its intrinsic value. However, plenty of
investors like to think they are getting a good deal and often
times that means not reaching up to the Apple (NASDAQ:
AAPL
) or Google (NASDAQ:
GOOG
) stratosphere.
Another frequently mentioned point is that not all
low-priced stocks are good values
. That advice is worth remembering, but the good news there are
some solid names out there whose price tags are within reach for
most investors.
The following names are the result of a screen of sub-$50
stocks, but these are not just any below $50 names. They have
yields of around of five percent or more, no debt and high
returns on assets. Those parameters were used so that value could
be found while ensuring adequate dividend coverage and robust
profitability. Here are some of the names the screen turned
up.
PetMed Express (NASDAQ:
PETS
)
At just over $12 a share, PetMed Express is a name almost any
investor can afford. The yield just dipped below five percent
because the shares jumped on news of a
$1 per share special dividend
. That is right, PetMed Express has joined the special dividend
craze.
Investors that want in on the special payout need to hold the
stock by December 14. Even without the special dividend, PetMed
is a prodigious dividend raiser. Its first payout of 10 cents per
share was delivered in 2009, but the dividend has been increased
by 50 percent since then. The company's return on assets is
nearly 18 percent and it has no debt. Those two factors indicate
that this dividend has room to continue growing, but a payout
ratio of almost 74 percent might be a tad high for
ultra-conservative investors.
Psychemedics (NASDAQ:
PMD
)
For those that think it is impossible to find a decent yield and
a debt-free balance sheet from a micro-cap company, meet
Psychemedics. One thing Psychemedics that might appeal to
conservative investors, in addition to the 5.5 percent yield, is
the company is engaged in an easy-to-understand business that is
unlikely to ever go away.
Simply put, Psychemedics runs drug tests for employers and
doctors. The company has paid dividends without interruption
since 1997 and has a stellar ROA of 23.1 percent. One caveat: The
payout ratio is over 95 percent.
Collectors Universe (NASDAQ:
CLCT
)
Collectors Universe, the provider of collectible authentication
services, is one of the more widely known micro-cap dividend
payers. A yield of 13 percent could be a source of allure to
some, but it should be noted that of the three stocks highlighted
hear, Collectors Universe has by far the ugliest chart as the
shares have tumbled 24.4 percent this year.
Part of the problem is
plunging revenue from modern coin submissions, as
Magic Diligence notes
. Then there is the payout ratio of nearly 100 percent, which
might say to investors there is limited dividend growth
ahead.
A fair argument, but it also must be noted that the payout has
more than quadrupled since 2006. Since the company has no debt,
it has no interest payments to divert capital to and that is a
good thing for shareholders.
(c) 2012 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.