Small caps with high dividend yields can be a win-win situation for value investors, because they receive a decent dividend without compromising growth. In fact, small caps with high dividends offer the potential for long-term gains and income in the form of a dividend.Furthermore, small caps have historically outperformed large caps, because small caps have a greater potential for growth. Also, dividend stocks that have been outperformers over the long term, also tend to provide a cushion against price volatility and economic uncertainty. Investing in small caps with high dividend yields can be a safe choice in a fluctuating market environment.
This article discusses three small cap stocks that trade in different industries, with a market capitalization of less than $1 billion... Read more
Many investors choose dividend-paying stocks to capitalize on steady payments as well as to the opportunity to reinvest the dividends to purchase additional shares. Many dividend-paying stocks represent financially healthy companies, which in turn, entice investors to invest in them. As a result, the stock prices of these companies increase and investors are compensated with sustained dividend payments. Furthermore, a financially stable company is more likely to increase its dividend over time.In majority, dividend-paying stocks are less volatile and therefore appealing to more investors. Those investors invest in these stocks, thus raising the stock prices and dividend payments.This article discusses three companies that trade in the cable media industry. All three companies have... Read more
The London Stock Exchange offers value investors great stocks with strong fundamentals and a sustained dividend growth. However, with the currency exchange rates, it is often expensive for US investors to invest directly in the LSE. Through the ADRs - in this article American Depositary Receipts -, value investors can invest in foreign stocks that trade in the NYSE or the Nasdaq at the lowest cost.
Another thing to consider is whether a stock is over- or undervalued. This means that its market price is higher or lower than its present value. When a stock is overvalued and its market price is higher than its present value, investors should sell the stock as it is already more expensive than its actual value and it is highly unlikely to rise further. When a stock is undervalued and its... Read more
Overvalued means that a stock, or in this article the American Depositary Receipt (ADR), trades at a market price that is higher than the stock’s (ADR’s) actual price (present value), showing that it might be time to sell. Analysts calculate a stock’s present value either by using the Dividend Discount Model (DDM) or the Graham formula. Both are solid methods to check if a stock is over- or undervalued relative to its market price, as well as to its peers.
This article discusses three Canadian ADRs that trade in the oil & gas and the metal industries. Two companies are mid-caps, one strongly overvalued and the other slightly overvalued, whereas the large-cap is moderately overvalued.
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Canadian ADRs that trade on the NYSE can offer the opportunity to capitalize on the growth that some of these stocks incur as a result of their strong fundamentals and dividend growth. ADRs (American Depositary Receipts) trade exactly like the stocks, only some of them in over-the-counter (OTC) markets and with a different ticker than the one used in the local exchange. Normally, ADRs leave room for further growth and higher dividends because they are cost effective and avoid foreign taxes in each transaction. Furthermore, ADRs are a great way to get exposure in the U.S. equity markets.
This article discusses three Canadian ADRs that trade on the NYSE. All three firms are large caps of the financial industry, with a focus on asset management and wealth protection. Although all... Read more
Overvalued describes a security with a market price that is considered too high based on the company’s fundamentals. For instance, a stock may be overvalued because investors have confidence in the company. A rise in investor confidence will surge the demand for the security, thereby increasing the market price. However, if the company’s balance sheet is not strong enough to support the market price, the stock will most likely decline in due term. Also, if the security is fairly valued and its price is not declining when the company’s fundamentals deteriorate, the security is most likely overvalued.
Beyond a company’s fundamentals, analysts use the Dividend Discount Model (DDM) to assess the present value of a security based on its projected... Read more
The Dividend Discount Model (DDM) seeks to estimate the present value of a given stock based on the spread between the estimated dividend growth and a dividend discount rate. The projected dividend growth is estimated by taking into consideration the stock's dividend history. If a stock delivers an annualized dividend of $1.80 per share and has an actual dividend growth of 120% over the last 15 years, you can calculate the average growth at 8% per year. For the dividend discount rate, which is actually the return you expect on your money, you can calculate a proxy rate based on the dividend’s growth. For instance, when the $1.80 dividend per share (DPS) goes up to $1.94, which is an 8% growth, the $1.94 is actually worth $1.75 to you today, because if you had $1.75 today,... Read more
Investors often seek for dividend growth in mid-cap stocks because they offer a better growth expectation than the large caps. Although large-cap stocks come to mind when considering solid business models, low earnings volatility, and sustainable dividends, there are mid-caps that can do equally well. I have never been exclusively focused on this area.
The recent speculation regarding the proper timing for a QE (quantitative easing) from the U.S. central bank and the increased strain for the declining Chinese financial system, have both led to an increased level of market volatility. This article discusses three mid-cap, growth-oriented U.S. banks with a proven ability for revenue growth and free cash flows. Coupled with strong management that delivers long-term dividend growth,... Read more
Investors often narrow their investment decisions in the domestic stock markets, thereby missing some remarkable opportunities in the foreign markets. Although for novice investors it may seem like a daunting task to put money into an unknown area, savvy investors know that the foreign markets have hidden gems that can be discovered through ADRs. The American Depositary Receipts allow you to access foreign companies that trade on the NASDAQ or the NYSE and purchase their shares in U.S. currency. ADRs trade in the OTC markets like regular stocks and pay dividends.
This article discusses two of the largest Australian Banks that trade in the OTC market. Their average payout ratio is 80% at an average yield of 7.0%. Although the ADRs have underperformed the market, both banks have... Read more
Over the last decade, the broadcasting industry has seen a range of technological advancements in its television, radio, and digital services. Consolidation of individual broadcast stations into large networks as a result of loose ownership regulations has increased the industry competitiveness. The trend is expected to continue as there are low barriers to entry, thereby consolidating the industry. Major companies own and operate multiple stations nationwide by implementing cost cutting strategies through economies of scale and consolidation that limits employment growth.
This article discusses three media companies operating in the Broadcasting industry. All three companies trade significantly above their 52 week-low, suggesting an upward performance trend. Entravision, the... Read more