With dividend stocks hot this year, some market experts are advising investors to be cautious and selective.
Identifying companies with room to raise dividends significantly, rather than focusing on finding the highest yields, might be your best way forward. That theme was explored by MarketWatch writer Jeff Reeves and Bob Phillips , managing principal of Spectrum Management Group.
Interestingly, there was some overlap between their stock recommendations. Phillips said the most important factor when considering a dividend stock is the likelihood of big dividend increases over time. For each of the 11 sectors, we have listed up to three companies with forward price-to-earnings ratios based on consensus earnings estimates that are lower than the aggregate. We have calculated free cash flow yields by dividing free cash flow per share for the past 12 months by the closing share price on Sept.
The Most Undervalued Sector in the Stock Market Today -- The Motley Fool
Any screening approach has its flaws. For example, a company trading at a low price-to-earnings ratio relative to peers could have some major problems.
Most Undervalued Stocks Of The S&P - March | Seeking Alpha
Also, a company excluded from the list, because it is not expected to increase earnings next year, may be in that position simply because it sold or spun off a business unit. But the screen can provide a starting point for your own research. The real-estate sector trades for 17 times weighted consensus FFO estimates. FFO stands for funds from operations. This non-GAAP figure adds depreciation and amortization back to earnings, while excluding gains or losses on the sale of investments. FFO is meant to gauge dividend-paying ability, and is used by most REITs.
The telecommunications-services sector trades for Philip van Doorn covers various investment and industry topics. He has previously worked as a senior analyst at TheStreet.
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Chesapeake Lodging Trust U. Summit Hotel Properties Inc. Great Plains Energy Inc. Free cash flow yield - past 12 months.