Top Equity News hasn’t paid attention to our income focused readers for a while. Sorry J. For today’s article, TEN screened for companies that pay at least a 5% dividend, have grown their dividend by an average of 10% annually or more for the past 5 years, and have topped Wall Street’s earnings’ estimate by at least 10% for the last two quarters.
Sounds pretty good so far, right?
On the first pass, our computer spit out 11 stocks that meet the stringent criteria above. Out of 10,000 publicly traded companies, it’s a fairly exclusive list.
Next up, TEN ran the candidates through a gauntlet of strict valuations: low P/E, high return-on-equity, low price-to-sales, low price-to-book, reasonable earnings growth and a low PEG ratio.
Sounds even better now, high dividends and an excellent value, right?
Our favorite of the 11 is Companhia Siderurgica Nacional (SID), an integrated steel producer in Brazil and Latin America.
Check out these fundamental valuations based on our checklist. SID trades at 6.02 times forward earnings. While analysts believe the year ahead could be difficult, they still believe the company’s 5 year earnings growth rate will be close to 14%.
That’s a significant discount, and it can be seen in Companhia’s PEG ratio of only 0.58. Like golf, the lower the score the better. According to a study done by Motley Fool, companies with a PEG below 1 have a terrific record of outperforming the market.
Finally, the Brazilian company’s return-on-equity of 40.16% is enough to make Warren Buffet blush. Although he denies it, Warren is a big ROE guy. Investor’s Business Daily says that all the biggest past winners had a ROE of 17% or higher, which is no problem for SID.
Based on its stock chart, TEN suggests initiating positions around $10, and then adding more if shares were to sink to $9. SID closed Monday, February 13, at $10.54 a share, and pays a dividend of 65 cents per share or 6.3%. Try to find that at your local bank.
For patient investors with a long-term time horizon, TEN believes SID offers an attractive total return, capital gains plus dividends. If the dividend remains consistent and the stock can add just a dollar or so a year, you are looking at making about 16% a year.
Sounds pretty good, right?
Dividend Stocks: The Sound of Brazilian Steel is an article from: 
