Income Investing: 9 Dividend Champions With Low Valuations

James Dennin, Kapitall: These stocks have raised dividends for 25 consecutive years, and have low price to equity and price to book ratios. 

The DRiP investing resources center has a number of resources for income investors for ways to re-invest your money. One particular favorite of ours is their index of dividend champions – stocks that have raised their dividends for 25 consecutive years. 

There are about 125 companies out there who've accomplished this impressive feat.

To narrow the list down further, we decided to look for plays on the list with low valuations. To find those we screened for companies with a price to equity (P/E) ratio below 15, and a price to book (P/B) ratio below 2. P/E ratios are calculated by looking at the cost of each dollar of equity, while the P/B ratio compares the company's price to the total value of its assets. 

Read more from Kapitall: Retail Highs and Lows: Undervalued Department Store Stocks with High ROE

The first thing we noticed about the screen was a preponderance of stocks in the financial industry, particularly community banks like the 1st Source Corporation (SRCE), based in Indiana and Michigan. 

This is because community banks have lower capital requirements than other financial institutions – the amount of cash they're required to keep on hand – which allows them to do more to drive up returns on equity (ROE). However stocks across the financial sector have very cheap pricing [ JP Morgan's (JPM) P/B is 1.02), and could also stand to benefit from tapering. 

Our screen left nine stocks on our list.

Click on the interactive chart below to view analyst ratings over time. 

Do you see any investing opportunities in these dividend stocks? Use the list below to begin your own analysis.

1. The Chubb Corporation ( CB): Provides property and casualty insurance to businesses and individuals. Market cap at $23.39B, most recent closing price at $92.45.

P/E: 12.88

P/B: 1.52
 

 

2. Cincinnati Financial Corp. ( CINF): Engages in the property casualty insurance business in the United States. Market cap at $8.36B, most recent closing price at $50.89.

P/E: 14.23

P/B: 1.43

 

 

3. Community Trust Bancorp Inc. ( CTBI): Operates as the holding company for Community Trust Bank, Inc. Market cap at $685.62M, most recent closing price at $43.94.

P/E: 14.60

P/B: 1.68

 

 

4. Chevron Corporation ( CVX): Engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. Market cap at $236.82B, most recent closing price at $123.29.

P/E: 10.09

P/B: 1.63

 

 

5. Nacco Industries Inc. ( NC): Engages in lift trucks, small appliances, specialty retail, and mining businesses primarily in the Americas, Europe, and the Asia-Pacific. Market cap at $493.59M, most recent closing price at $62.00.

P/E: 11.27

P/B: 1.8

 

 

6. Old Republic International Corp. ( ORI): Engages in insurance underwriting business. Market cap at $4.36B, most recent closing price at $17.02.

P/E: 14.93

P/B: 1.18

 

 

7. 1st Source Corporation ( SRCE): Operates as the holding company for 1st Source Bank that offers commercial and consumer banking services to individuals and businesses in Indiana and Michigan. Market cap at $776.12M, most recent closing price at $31.87.

P/E: 14.69

P/B: 1.34

 

8. Universal Corp. ( UVV): Operates as a leaf tobacco merchant and processor worldwide. Market cap at $1.24B, most recent closing price at $53.94.

P/E: 10.56

P/B: 1.12

 

 

9. V.F. Corporation ( VFC): Designs and manufactures, or sources from independent contractors various apparel and footwear products primarily in the United States and Europe. Market cap at $27.21B, most recent closing price at $61.67.

P/E: 5.82

P/B: 1.20

 

 

( List compiled by James Dennin, a Kapitall Writer. Dividend yields sourced from Zacks Investment Research, all other data sourced from Finviz.)

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