One of the classic financial ratios is the price-to-earnings ratio, or P/E, which is the price of the stock divided by the earnings per share. The lower the P/E, the better.
The average P/E for the
Dow Jones Industrial Average
is 16.7. If you look at the companies that raised their dividends last week, nine of them had P/E's that were lower than the Dow's P/E. Stockpickr.com has reviewed the stocks that increased their dividends, and compiled
sits atop the list with the lowest P/E: 9. Cincinnati Financial is an insurance company that offers commercial and personal property insurance, casualty insurance and life insurance.
It just increased its dividend by 6%, yielding 3.6%. This is the 47th consecutive increase of the dividend. The stock carries a 1.2 P/E-to-growth (PEG) ratio. This Ohio-based company, which currently operates in 33 states, has recently decided to expand to New Mexico.
Cincinnati Financial shows up in the portfolio of the 5-Star Morningstar-rated
, which is managed by Michael Santelli. The fund has had an average annual return of 24.25% over the last three years. Allegiant also owns
, the electric utility that serves central and southern California. Edison has a P/E of 15, a PEG of 1.9 and a yield of 2.2%.
Another stock with a low P/E and an increasing dividend is
, which manufactures electromechanical controls and hydraulic-fluid power systems. It just increased its dividend by more than 21%, to 31.5 cents a share. The stock has a P/E ratio of 13.5, a PEG of 1.1 and a yield of 1.1%. It also just announced a $500 million stock repurchase, which is in addition to its existing share-repurchase program. To round out the good news, Parker-Hannifin plans a 3-for-2 stock split.
Parker-Hannifin appears in the
portfolio at Stockpickr. Another stock that appears on the list is
, the tractor- and farm-equipment company, which has a P/E ratio of 17, a PEG of 1.7 and a yield of 1.5%.
Another stock on the Cramer machinery list is
, a manufacturer of climate-control, construction, industrial and security products. Ingersoll has a P/E ratio of 9, a PEG of 1.2 and a yield of 1.5%. It just sold its Bobcat machinery division at a much higher price than anticipated.
Getting back to the stocks with low P/E's and dividend increases,
shows up with a gigantic 63% increase in its dividend. This agriculture and transportation company has a P/E of 14, a PEG of 2.5 and a yield of 0.4%.
Andersons is part of the
portfolio at Stockpickr, which also includes
Archer Daniels Midland
with a P/E of 13 and a yield of 1.4%, and
, with a P/E of 10 and a yield of 1.3%.
You can see the complete list of
At the time of publication, Altucher and/or his fund had no positions in the stocks mentioned, although positions may change at any time.
James Altucher is president of Stockpickr LLC, a wholly owned subsidiary of TheStreet.com and part of its network of Web properties, and a managing partner at Formula Capital, an alternative asset management firm that runs a fund of hedge funds. He is also a weekly columnist for
The Financial Times
and the author of
Trade Like a Hedge Fund
Trade Like Warren Buffett
. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Altucher appreciates your feedback;
to send him an email.
TheStreet.com has a revenue-sharing relationship with Trader's Library under which it receives a portion of the revenue from purchases by customers directed there from TheStreet.com.