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Top 10 Value Stocks With Increasing Dividends

James Altucher

When a company raises its dividend, it sends a powerful message to both current shareholders and potential investors, showing that no matter what shape the country's financial system is in management believes that their company will continue to improve.

Along those lines, Stockpickr has come up with a Best PEG Stocks With Raised Dividends, a list of the top 10 dividend raisers for the last week singled out for their price/earnings to growth, or PEG, ratios.

The PEG is calculated by dividing the stock's price-to-earnings ratio , also called the P/E ratio, by the company's growth rate. A PEG above 2 suggests you'd be paying too much for the stock, since it would be trading at more than two times growth. A PEG between 1 and 2 is considered favorable, and below one is considered a bargain.

At the top of the list is Lufkin Industries(LUFK Quote). This manufacturer of oil-field pumping units, power transmission products and freight-hauling highway trailers has a PEG of 0.64, and it just increased its dividend by 9.5% to 23 cents a share. The stock tanked more than 5% last Friday and another 4% on Monday, creating a favorable buying opportunity. The company recently reported a 2% drop in revenue and flat earnings. The stock is rated A- by TheStreet.com Ratings.

Lufkin is part of the Stockpickr portfolio of Cramer's Oil Service Plays, which also includes drilling contractor Nabors Industries(NBR Quote), which has a low P/E ratio of 7.8 and a very low PEG of 0.51. It recently reported a 4% year-over-year increase in quarterly revenue. The above-mentioned Cramer portfolio also includes Halliburton(HAL Quote), one of his longtime favorites. Halliburton has a P/E of 10 and a PEG of 0.85. It recently reported a 159% year-over-year increase in quarterly earnings on a 20% revenue increase.

Another dividend raiser with a favorable PEG is Molex(MOLX Quote), which just increased its dividend to $0.1125 per share, a 50% increase. This maker of electronic components, such as micro-miniature connectors, SIMM card sockets, keypads and tire-pressure monitoring systems, sports a PEG of 1.1 and a P/E of 19.

Unfortunately, Molex also ended up on the Scandal Stocks portfolio at Stockpickr due to the fact that its board found 12 years' worth of options irregularities and some executives had to return $685,000 of realized gains to the company. So proceed with caution here.

Another stock that appeared on the Scandal portfolio was Asyst Technologies(ASYT Quote), because of its $19 million charge from options backdating. Asyst has posted negative earnings, but it offers a forward P/E of just 7 and a PEG of 0.98.

Illinois Tool Works(ITW Quote) is another stock that raised its dividend substantially, by 33% to 28 cents a share. This manufacturer of plastic and metal components, fasteners and specialty products, has a P/E of 17 and a PEG of 1.3. The company just introduced Twist-N-Lock, a new type of drywall anchor that holds 75 pounds, up to twice as much as plastic plugs. The company just reported a quarterly earnings increase of 8.5% year over year.

Illinois Tool is a stock owned by Arnold Van Den Berg, chairman of Van Den Berg Management, an investment management company that has had a compound annual return of 15.6%. One of Van Den Berg's larger positions is Microsoft(MSFT Quote), which has a P/E of 20 and a PEG of 1.4. He also owns shares of 3M(MMM Quote), a conglomerate that offers a P/E of 14 and a PEG of 1.5.

You can find the entire list of the Best PEG Stocks With Raised Dividends at Stockpickr.

Some of the other high-yield portfolios that you might find of interest are:

• High-Yield Growth Stocks
• More High-Yield Stocks You've Never Heard Of
• High-Yield Warren Buffett Stocks

Please note that due to factors including low market capitalization and/or insufficient public float, we consider Asyst Technologies to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.