Six Undervalued Dividend Stocks Under $10 With Low P/S

Looking to get more bang for your buck with stocks in the low price range? Their volatility can mean big percentage gains (or losses) for investors. With this in mind the stocks on this list are trading between $1-$10 with market caps near $100 million and above.  We also looked for dividend yields north of 1%.  

We screened our low price universe for undervaluations. Specifically, we looked for low price to sales ratios and price movements that lag EPS trends.

Analyze These Ideas: Getting Started

Here are the details: 

Low Price/Sales Ratio:  We like low-priced stocks, but there are so many different ways to gauge a stock’s value. One that can come in handy is the price-to-sales (P/S) ratio. A low P/S ratio means the price of the stock is cheap compared to revenues. If the number is below 1, then they can be considered undervalued.  Be mindful that this ratio does not account for expenses or debt, and that there is a normal variation between industries.

We screened for stocks with P/S ratios below 2. Meaning the market cap of the company is no more than 2x the annual sales. We chose this limit after speaking with Neil Hennessy, Portfolio Manager and Chief Investment Officer of The Hennessy Mutual Funds, who said this is one of his favorite investing strategies.

EPS Trends:  Assuming that P/E is equal to a constant k, increases in EPS should be matched by proportionate increases in price. When they don't match up, a mispricing may have occurred. That is, these stocks have been seeing stronger increases in analyst estimated EPS than increases in price over the last month.

The List

Do you think these low priced stocks are undervalued? Use this list as a starting point for your own analysis. 

Interactive Chart: Press Play to compare changes in yield over the last two years for the stocks mentioned below‬:

1. LeMaitre Vascular, Inc. ( LMAT): Develops, manufactures, and markets vascular devices for the treatment of peripheral vascular disease worldwide. Market cap at $94.7M, most recent closing price at $6.21.

Price/Sales at 1.63. Dividend yield at 1.93%.

The EPS estimate for the company's current year increased from 0.19 to 0.2 over the last 30 days, an increase of 5.26%. This increase came during a time when the stock price changed by 2.64% (from 6.05 to 6.21 over the last 30 days).
 

2. Mitsubishi UFJ Financial Group, Inc. ( MTU): Provides various financial services to individual and corporate customers in Japan and internationally. Market cap at $86.23B, most recent closing price at $6.09.

Price/Sales at 1.61. Dividend yield at 2.46%.

The EPS estimate for the company's current year increased from 0.51 to 0.57 over the last 30 days, an increase of 11.76%. This increase came during a time when the stock price changed by -9.1% (from 6.7 to 6.09 over the last 30 days).
 

3. Hallador Energy Company ( HNRG): Engages in the production and sale of steam coal in the United States. Market cap at $212.57M, most recent closing price at $7.43.

Price/Sales at 1.47. Dividend yield at 2.15%.

The EPS estimate for the company's current year increased from 0.56 to 0.66 over the last 30 days, an increase of 17.86%. This increase came during a time when the stock price changed by 4.21% (from 7.13 to 7.43 over the last 30 days).
 

4. GAIN Capital Holdings, Inc. ( GCAP): Operates as an online provider of retail and institutional foreign exchange trading and related services. (DISCLOSURE: GAIN Capital has a non-controlling interest in the parent company of Kapitall) Market cap at $191.42M, most recent closing price at $5.38.

Price/Sales at 1.14. Dividend yield at 3.72%.

The EPS estimate for the company's current year increased from 0.34 to 0.41 over the last 30 days, an increase of 20.59%. This increase came during a time when the stock price changed by -1.1% (from 5.44 to 5.38 over the last 30 days).
 

5. Blueknight Energy Partners, L.P. ( BKEP): Provides integrated terminalling, storage, processing, gathering, and transportation services for companies engaged in the production, distribution and marketing of crude oil and asphalt products in the United States. Market cap at $195.05M, most recent closing price at $8.60.

Price/Sales at 1.07. Dividend yield at 5.47%.

The EPS estimate for the company's current year increased from 0.28 to 0.33 over the last 30 days, an increase of 17.86%. This increase came during a time when the stock price changed by -3.8% (from 8.94 to 8.6 over the last 30 days).

 

6. The Wendy's Company ( WEN): Operates as a quick-service hamburger company in the United States. Market cap at $2.39B, most recent closing price at $6.08.

Price/Sales at 0.95. Dividend yield at 2.63%.

The EPS estimate for the company's current year increased from 0.19 to 0.21 over the last 30 days, an increase of 10.53%. This increase came during a time when the stock price changed by 7.61% (from 5.65 to 6.08 over the last 30 days).
 

 

( List compiled by Kapitall's Rebecca Lipman)

 

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