A Few Dividend Bargains

Dividend-paying stocks have had a good run lately, but some of them may be getting a little frothy. A screen for value-priced dividend stocks is a good starting point for bargains and should help find the froth -- if there is any.

To see if there are any deals on the discount aisle, I ran a CAPS screener with the following settings:

  • P/E ratio positive and less than 15.4, the current value for the S&P 500 index.
  • Dividend yield greater than 2.3%, the current value for the S&P 500.
  • Long-term debt-to-equity ratio less than 1 to eliminate companies with high debt levels.
  • Revenue and earnings growth each greater than 3% over the past three years.
  • Market capitalization greater than $5 billion.
  • Rated by our CAPS community at four or five stars (out of five).

The screen kicked out 50 matches spread across seven of the nine sectors as listed below.


Number of screen matches

Basic Materials18
Health Care5
Industrial Goods5

Interestingly, there were no hits from consumer goods or utilities, which are typically known for defensive, dividend-paying stocks. Turning knobs on the screener revealed that the P/E ratio limit was bouncing many consumer goods companies that would have otherwise passed. P/E and debt-to-equity ratios kept the gate closed for utilities.

The U.S.-based company from the screen with the highest CAPS rating and dividend yield from each sector is listed below.

Company Name

LT Debt-to-Equity Ratio

Dividend Yield



CAPS Rating
(out of 5)

Chevron0.073.3%8Basic materials5
3M (NYSE: MMM) 0.282.6%14.8Conglomerates5
Aflac (NYSE: AFL) 0.013.0%8.6Financial5
Baxter International0.662.4%13.8Health care5
Eaton (NYSE: ETN) 0.423.9%9.7Industrial goods5
Walgreen (NYSE: WAG) 0.163.2%11.9Services4
Intel (Nasdaq: INTC) 0.153.3%10.8Technology5

Source: CAPS Screener results. TTM = trailing 12 months.

I have CAPScalls on Chevron, Aflac, and Intel and own Chevron and Intel. Based on the screen and article research, I'll be adding Eaton to my scorecard with an outperform call.

Screen results should always be considered a start for further research, not outright buy recommendations. However, this screen shows there are still some dividend-paying values out there and that it's tough to find bargains in traditional defensive sectors.

Read Full Story