This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

2 Undervalued Dividend Champions Going Ex-Dividend This Week

Stocks in this article: NC SCL

Mary Lynn Cesar, Kapitall: As February comes to an end, many companies are nearing their ex-dividend dates. Is now the time to invest in these undervalued dividend champions?

When it comes to our stock screens, dividend champions are among the most popular. "Dividend champion" is a term created by the DRiP Investing Resource Center, and it refers to US companies that have offered and increased dividends over, at minimum, the past 25 consecutive years.

[Read more from Kapitall: 5 Stocks Under 10 Dollars With High Levels of Free Cash Flow]

It's important to note that just because a company has consistently raised its dividend, doesn't mean the yield will be remarkably high. Diebold Inc (DBD), a business equipment manufacturer, has been a dividend champion for the longest period — an impressive 60 years. During that time, the company has raised its yield to 3.42%. Meanwhile, Universal Health Realty Trust's (UHT) dividend has increased to 5.9% in 27 years, a considerably shorter time. And then there's C.R. Bard Inc. (BCR), which has been a champion for 42 years and has only managed to increase its dividend to 0.65%.

Nevertheless, since a company can cut or stop dividend payments whenever it wants, many investors view a long and consistent payment history as an encouraging sign of reliable income. That's why income investors are big fans of these stocks.

Investing Ideas

We decided to run a screen that would help us find the dividend champions that are going ex-dividend this week. An ex-dividend date is the date by which an investor must own stock in a company in order to receive a dividend payment.

To begin, we created a list of stocks with ex-dividend dates between February 25 and February 28 as listed on TheStreet's dividend calendar. We then cross referenced that list with the current group of 104 dividend champions.

After the ex-dividend date, stock prices tend to drop by the expected amount of the forthcoming dividend. This is why we we decided to narrow our screen's scope by looking for undervalued dividend champions as indicated by a l ow Price to Sales (P/S) ratio.

A P/S ratio is a valuation metric that compares a stock’s price to what the company generates in revenue. When a company has a low P/S ratio, it means that its price is cheap in relation to its revenue. If a stock’s P/S is below 1, it can be considered undervalued. It's important to note that this ratio doesn’t factor in expenses or debt, and variation between industries is to be expected.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs