Five Mid-Cap Undervalued Dividend Stocks With High Long Term EPS Growth Rates – (IVZ, PFG, HIG, NYX, AXS)
Investors believe that dividend stocks can be a great addition to their investment portfolio. These stocks can provide hedging against weakness or become a source of income. No matter what happens, they definitely have their plus sides. To be more obvious, just because a stock declares a dividend doesn’t mean it is a good deal.
Simple answer to this question is how each company is priced with respect to its net earnings estimates and the size of that forecasted profit growth. Keeping that idea in mind, I have picked five mid-cap US stocks at financial sector with market value above $4 billion, forward price to earnings ratios of as high as 10 and long term annual EPS growth estimate of minimum 10% each year on average over the coming five years. Take a close look at them and spot the best investment at present.
INVESCO Ltd. (NYSE:IVZ) which is an independent global investment management company is worth $9.87 billion. Its stock’s last closing price was $22.03 per share or 9.97 times its forward earnings, and pays a 3.13% dividend yield annually. In the last five years, the company’s full-year earnings per share growth remained over 5% a year on average and the Wall Street analysts are much more optimistic looking forward to the coming five years.
Average analyst estimates are that the company’s profit will move up by an average rate of 13.42%. They are currently very bullish about INVESCO as their average recommendation is to buy this stock.
Principal Financial Group Inc (NYSE:PFG) is a provider of retirement savings, investment and insurance products and services with about 18 million customers and $9.87 billion market cap. At its latest closing price of $25.40, it has a forward price to earnings ratio of just 7.20 and an annual dividend yield of 2.83% on a payout ratio of 39.00%.
Tracking last five years, Principal Financial Group’s profit dropped more than -10.01% a year on average but analysts are much more confident about a turnaround in the next five years. Mean expectations are that the company’s net income will grow by an average rate of 12.53%. At present, nine analysts recommend to hold this stock while 7 give buy rating.
The Hartford Financial Services Group Inc (NYSE:HIG) is a $7.50 billion company providing insurance and financial services. The stock ended last trade at $26.46 a share and the price is up more than 5.5% so far this year. The company maintains forward price to earnings ratio of 4.62.
Its net income moved down more than 33% a year on average in the period of last five years. But analysts’ view on Hartford Financial Services is strong at 20.25% projected annual earnings growth on average for the next five years which is much more encouraging, as is the company’s 2.35% quarterly dividend yield on a payout ratio of 63.12% over the last 12 months. Analysts’ opinion about this stock is positive as 8 recommend buying while 7 suggest holding.
NYSE Euro next (NYSE:NYX) is the biggest exchange operator with worth $6.18 billion. Right now, its stock is trading at $24.33 a share or 8.82 times its forward earnings. The global operator of financial markets pays a 4.93% dividend yield yearly on a payout ratio of 57.71%. The company’s profit did move up 11.48% a year on average over the past five years but analysts expect its net profit to move at lower pace over the next five years with a raise of 10.69% a year on average. Currently, mean recommendation on this stock is to hold.
Axis Capital Holdings Limited (NYSE:AXS) is an insurance company with a market value of $4.14 billion. At latest $25.19 a share, it has an 8.47 forward price to earnings ratio and maintains a 3% dividend yield annually on a payout ratio of 23.66% in trailing twelve months. Over the last five years, the Axis Capital’s earnings dropped by -58.00% a year on average but analysts are much more hopeful of its moving forward in the next five years. Analysts, on average, predict earnings will grow by an average of 10.50% annually.
