Some Bargain Stocks to Consider Buying

by: Dobromir Stoyanov posted on: July 15, 2008 | about stocks: BOH / CB / CBSH / CINF / CSL / EMR / FDO / GCI / HRL / ITW / JNJ / LNC / MHP / MI / MMM / MTB / NFG / PEP / PG / PNR / PPG / RLI / RPM / SHW / SNV / SVU / SWK / SYY / TFX / TNC / TRMK / UDR / UVV / VAL / VFC / WEYS    

Ever since the broad market indexes entered into bear market territory, I have been checking the dividend champions list for bargains. I came up with a list, using the follwoing screen criteria:

1) Company has consistently increased dividends for more than 25 consecutive years
2) The P/E ratio is less than 20
3) The Dividend Payout Ratio does not exceed 50%
4) The dividend yield is equal to or higher than the dividend yield on the S&P 500

Using the criteria above I came out with the following list:

As usual this list is just a starting point. Before you leap into buying these stocks always check out at least the ten year financials trends in order to determine how your potential investment has performed over time. I would like to finish this post with two quotes from the legendary investor Warren Buffett:( Source Wikiquote)

“What doesn’t work is when you start doing things that you don't understand or because they worked last week for somebody else. “

"There are all kinds of businesses that Charlie and I don't understand, but that doesn't cause us to stay up at night. It just means we go on to the next one, and that's what the individual investor should do."

This article has 4 comments! Add yours below...

Dobromir Stoyanov

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This article has 4 comments:

  •  
    sapereaude
    Jul 15 12:36 PM
    A rational approach to investing, as opposed to the general casino/roulette wheel theory of market playing that has become the American Capitalist paradigm.
  •  
    Alex Garcia
    Jul 15 01:04 PM
    My Website
    thanks for the screen. JNJ looks interesting even thought it has had a nice run up from its lows
  •  
    John Egan
    Jul 15 01:19 PM
    I seriously consider these names as "just a jumping off point".. And, I'm not sure if dividend increases are a valid reason to buy in this market anyway. Look at a chart of PPG (Which I have been following as it keeps sinking) for example. Here's a company that has recently dumped its auto glass business... But is still leveraged to auto and industry in many ways.

    I think that pulling up the old 'boom-bust cycle chart' and maybe looking at some of these names based on the stage that you think we might be in would be a better jumping off point.... Well.. excepting anything to do with finance or real-estate that is..

    thx jegan ;-)
  •  
    BlueOkie
    Jul 16 08:24 AM
    I own 4 of these stocks. I purchase thru their transfer agents and also reinvest all dividends thru a DRIP. Funny you should quote Buffett as these sound like Graham's selection criteria.
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