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Screening for Triple Threat Stocks: Value, Growth and Dividends

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  • (0:30) - The Power Combo: Value, Growth and Income
  • (7:30) - Tracey’s Top Stock Picks
  • (22:10) - Episode Roundup: WSBC, TROW, ABBV, ATCO, MDC,  EC
  •                 Podcast@Zacks.com

 

Welcome to Episode #232 of the Value Investor Podcast

Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.

Who doesn’t like the idea of buying a cheap stock with strong growth?

That’s a powerful combination.

But what if you could buy a cheap stock, with strong growth AND it paid a great dividend yield?

Those would be triple threat stocks.

Screening for Triple Threat Stocks

What does it take to find these triple threats?

It’s pretty easy to screen for the value component.

In this case, a P/E of less than 20 would get you “cheap” stocks.

For dividend, you can screen for a yield more than 2%, as that’s higher than the S&P 500 yield of 1.39%.

Growth is more difficult to screen for due to the coronavirus pandemic which has distorted the year-over-year growth metrics.

But you can still screen for double digit year-over-year sales growth and earnings growth and it’s still going to get you some great growth stocks.

Of course, adding the Zacks Ranks of #1 (Strong Buy) and #2 (Buy) would also give you companies where analysts are raising earnings estimates.

This screen returned 21 stocks.

5 Triple Threat Stocks with High Zacks Ranks

1.       WesBanco, Inc. (WSBC - Free Report) is a West Virginia-based regional bank which is a Zacks Rank #2 (Buy). It pays a dividend of 3.7% and has a forward P/E of 14.6. Earnings are expected to rise 38% this year. Banks have rallied big in 2021. Is there more gas left in the tank?

2.       T. Rowe Price Group (TROW - Free Report) is an investment management services company which is expected to see earnings growth of 27% in 2021. It pays a dividend that is yielding 2.4%. Shares are up 16% year-to-date. With the stock market hitting new highs nearly every day, are the shares a deal at 14.5x?

3.       AbbVie Inc. (ABBV - Free Report) is a large cap pharmaceutical company that is dirt cheap. It trades with a forward P/E of just 8.6. This Zacks Rank #2 (Buy) pays a juicy dividend, currently yielding 4.8%. Is it a hidden gem?

4.       Atlas Corp. (ATCO - Free Report) owns Seaspan, a containership company, and APR, a mobile power solutions company. Based in Hong Kong, this Zacks Rank #2 (Buy) has a forward P/E of 10.3 even though shares are up 31.5% this year. Earnings are expected to rise 38.1% as shipping remains red hot. But is all the good news already priced in?

5.       MDC Holding (MDC - Free Report) is a national home builder which pays one of the largest dividends in the home building industry at a yield of 2.2%. After a red-hot 2020, MDC is still expected to grow earnings by another 34.6% in 2021. Can it keep up this strong growth?

What else should you know about the triple threat stocks?

Listen to this week’s podcast to find out.

[In full disclosure, Tracey owns shares of ABBV and MDC in her personal portfolio.]

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