Submitted by
Dividend Yield
as part of our
contributors program
.
Many people ask themselves how to make money with stocks and
generate a second income that is high enough to retiree a few years
earlier in order to enjoy the lifetime a bit more. Most investors
try to search a safe investment strategy that works really well. A
Strategy, simple enough to understand and easy to implement. Some
investment strategies fail, others work well but every tactic is
not forever. It comes the time when the market forces change.
One strategy I cover in my blog on a regular basis is the
Dogs of the Dow Jones
philosophy. The strategy is to buy 10 stocks of the Dow Jones with
the highest dividend yield and lowest price to earnings ratio at
the beginning of the year and to hold these stocks for a year.
After this period, the investor should sell stocks that are no more
Dogs of the Dow and buy therefore new Dogs of the Dow. Below is an
updated sheet of the 10 best Dogs of the Dow. Such stocks have the
lowest expected price to earnings ratio and highest dividend yield
within the Dow Jones Index.
Here are the three best Dogs with strongest EPS
growth:
1. Verizon (
VZ
)
has a market capitalization of $123.57 billion. The company employs
184,500 people, generates revenue of $110.875 billion and has a net
income of $10.198 billion. The firm's earnings before interest,
taxes, depreciation and amortization (EBITDA) amounts to $29.376
billion. The EBITDA margin is 26.49 percent (the operating margin
is 11.62 percent and the net profit margin 9.20 percent).
Financial Analysis: The total debt represents 23.93 percent of
the company's assets and the total debt in relation to the equity
amounts to 153.33 percent. Due to the financial situation, a return
on equity of 6.45 percent was realized. Twelve trailing months
earnings per share reached a value of $1.07. Last fiscal year, the
company paid $1.98 in the form of dividends to shareholders. The
earnings are expected to grow by 16.26 percent for the next
year.
Market Valuation: Here are the price ratios of the company: The
P/E ratio is 40.37, the P/S ratio is 1.13 and the P/B ratio is
finally 3.45. The dividend yield amounts to 4.71 percent and the
beta ratio has a value of 0.51.
2. E I Du Pont De Nemours (
DD
)
has a market capitalization of $40.42 billion. The company employs
70,000 people, generates revenue of $38.719 billion and has a net
income of $3.510 billion. The firm's earnings before interest,
taxes, depreciation and amortization (EBITDA) amounts to $6.289
billion. The EBITDA margin is 16.24 percent (the operating margin
is 11.06 percent and the net profit margin 9.07 percent).
Financial Analysis: The total debt represents 25.89 percent of
the company's assets and the total debt in relation to the equity
amounts to 146.08 percent. Due to the financial situation, a return
on equity of 39.82 percent was realized. Twelve trailing months
earnings per share reached a value of $2.98. Last fiscal year, the
company paid $1.64 in the form of dividends to shareholders. The
earnings are expected to grow by 12.73 percent for the next
year.
Market Valuation: Here are the price ratios of the company: The
P/E ratio is 14.54, the P/S ratio is 1.04 and the P/B ratio is
finally 4.78. The dividend yield amounts to 3.99 percent and the
beta ratio has a value of 1.47.
3. General Electric (
GE
)
has a market capitalization of $220.84 billion. The company employs
301,000 people, generates revenue of $147.300 billion and has a net
income of $14.366 billion. The firm's earnings before interest,
taxes, depreciation and amortization (EBITDA) amounts to $31.015
billion. The EBITDA margin is 21.06 percent (the operating margin
is 13.64 percent and the net profit margin 9.75 percent).
Financial Analysis: The total debt represents 63.22 percent of
the company's assets and the total debt in relation to the equity
amounts to 389.43 percent. Due to the financial situation, a return
on equity of 11.06 percent was realized. Twelve trailing months
earnings per share reached a value of $1.35. Last fiscal year, the
company paid $0.61 in the form of dividends to shareholders. The
earnings are expected to grow by 12.58 percent for the next
year.
Market Valuation: Here are the price ratios of the company: The
P/E ratio is 15.63, the P/S ratio is 1.50 and the P/B ratio is
finally 1.91. The dividend yield amounts to 3.23 percent and the
beta ratio has a value of 1.62.
Take a closer look at the full list of the 10 cheapest stocks of
the Dow Jones. They have an average dividend yield of 21.72 percent
as well as a forward P/E ratio of 12.02. The average P/B ratio
amounts to 2.37 and P/S ratio is 1.97.
Selected Articles:
· The Best Trading Ideas | 19 Dividend Stocks at All-Time-Highs
· Warren Buffett | Berkshire Hathaway Q3/2012 Fund Portfolio
· A Quick Overview Of The Highest Yielding Stocks From The S&P
500
·
The Fastest Growing Dividend Stocks In The Dow
Jones Index