Investors are always hunting for the next big stock -- the dream stock whose price increases several times over when the market finally discovers it. It's easy to look back and see what the 10 best stocks of the past decade were.
But I'm more interested in the tools that can help me find new stock ideas, as well as provide the resources necessary to evaluate tomorrow's greatest companies -- just like Motley Fool CAPS.
We've enlisted CAPS to screen for top dividend stocks and get the story behind them. CAPS' nifty screener will help us find stocks with:
- A market cap of at least $1 billion.
- A long term debt-to-equity ratio of less than .5.
- A dividend yield of at least 4%.
- A price-to-earnings ratio of less than 25.
Then we'll tap the collective intelligence of our 115,000-plus CAPS members to see whether these companies present real opportunities -- or whether the numbers fail to tell the true story.
Opinions with the numbers
Here's a sampling from the list of stocks our screen pulled up today.
Company |
Dividend Yield |
CAPS Rating (out of 5) |
---|---|---|
Sasol |
5.3% |
***** |
Dow Chemical |
4.5% |
***** |
Philip Morris International |
4.2% |
***** |
Taiwan Semiconductor Manufacturing |
4% |
***** |
Data and star rankings from CAPS. All data as of Sept. 19.
Sasol
Regarded as a dominant player in coal-to-liquid technologies, South African Sasol had big full-year results from Mozambique -- where peers Petrobras
Dow Chemical
Investors looking for consistency can't get much better than top-rated dividend payer Dow Chemical. The diversified chemical company recently declared its 42 cent per-share dividend, its 388th consecutive cash dividend. Since 1912, the company has either maintained or increased a cash dividend for every quarter. Dow will also extend its possibilities when it enters the high-margin specialty chemicals business with the acquisition of competitor Rohm & Haas early in 2009. With new growth opportunities and two-thirds of its revenue coming from abroad, investors are feeling more bullish that Dow will tough out the current market downturn as well. In CAPS, 94% of the 1,248 members rating Dow Chemical expect it to outperform the market.
Phillip Morris International
The spinoff of Altria's
Taiwan Semiconductor Manufacturing
Although TSM reported that August sales rose just 6.2%, its smallest year-over-year revenue gain reported in the past 11 months, it's still outperforming peers. As a pioneer in the business of contract chip manufacturing, TSM has held onto its market share by continuing to make technological advances and spend big on research and development. And with its current P/E of 11.7 compared to its five-year average of 38.7, some see shares as relatively cheap, presenting a good opportunity in this dividend stock. More than 97% of the 1,102 CAPS members giving an opinion on Taiwan Semiconductor Manufacturing believe it will outpace the market.
Let 115,000 members be the judge
The collective wisdom of a huge pool of investors can help give context to a page of numbers developed through a stock screen. But even with an entire community of qualified opinions acting as the judge, individual investors are still the jury and should perform their own due diligence.
Run your favorite factors through the Motley Fool CAPS screener. It's totally free, and even fun!