5 dividend paying stocks now trade below book value
You don’t hear too much about these stocks. They don’t list anyone’s âhot ideasâ. Jim Cramer mentions other names on CNBC. You won’t find them in the Cathie Woods innovation funds. It’s highly unlikely that Elon Musk will tweet about them anytime soon.
They are disadvantaged value stocks identifiable by 2 basic measures: the price is lower than the book value and the price / earnings ratio is much lower than that of the market as a whole. Seen from another perspective, some of them may be buyout candidates given their relative low cost and other factors.
One of the biggest banks in Old New York City, it’s also one of the cheapest of the big stocks. With a price-to-earnings ratio of just 10 and now trading at an 11% discount on booking, it’s likely that value investors are looking into it.
Citigroup has more long-term debt than equity, which is not so unusual for this industry, but may give some investors pause. Profits are nowhere near this year, although analysts expect them to improve next year. In the meantime, the company pays a dividend of 2.61%, better than the yield on the 10-year Treasury bill.
Honda Motor Co.
The Japanese automaker is currently available for purchase at just 64% of its book value. With an ap / e of 8.88, it is definitely in the range of values. Equity is outstripped by long term debt but the current ratio is positive.
The gains are good this year and Honda’s 5-year record is good too. The company pays a dividend of 2.51%. Daiwa Securities recently upgraded the action from âbuyâ to âoutperformâ.
The South Korea-based telecommunications services company trades on the New York Stock Exchange at around half of its book value. That and a price / earnings ratio of 10.4 suggest investor disinterest.
Profits have been positive for the past 5 years, but analysts expect a worse year to come. Long-term debt is less than equity. KT pays a dividend with a yield of 4.26%.
The company works with grocery stores in the food distribution industry. Profits are nowhere near this year, but analysts expect significant improvement in the immediate future. The amount of long-term debt is greater than equity, but the company’s current ratio is positive.
The p / e is only 9.55 and the shares are trading with a 4% discount on booking. Average Daily Volume for NASDAQ
Telephone and data systems
The telecommunications provider is trading at 60% of its book value. The price / earnings ratio of 13.77 is well below the multiple of the S&P 500. Profits have been very good this year, but analysts’ expectations are for a less than excellent year ahead.
This is another candidate where long term debt exceeds equity but the current ratio is green. The company pays a dividend of 2.74%.
These are not buy recommendations. You would like to do more research on any of these before drawing any conclusions. The only point is that value stocks exist and we are in a period or cycle where they receive little notice. From a point of view resolutely against the tide, it is interesting.
Statistics courtesy of FinViz.com.