hey YouTube I'm Jimmy in this video I'm gonna go through some of the top value
stocks that I found that also have really good dividends and I think they
could have a really solid 2019 now as I usually do in these types of
videos is I spread the picks of the different stocks among different
sectors to try to diversify a bit and give us some options so in order to make
this list I looked for stocks that had a few features first they were high
quality companies and they had a decent yield and finally I wanted that company
to be trading at a lower forward p/e currently than its five-year average so
that was the basis of the criteria I created so let's look at our first
company our first company is SunTrust Bank ticker symbol STI SunTrust is a
regional bank and STI is a solid dividend stock because it has a dividend
yield of about 3.6 percent and it's also a good value stock since the stock took
a nosedive back in December here's what the STI chart looks like and as we could
see it's already begun to recover from its low now I wouldn't be surprised if
STI stock kept drifting higher throughout 2019 as it moves closer to
its historical PE average from the past 5 years
ok so based on where the stock is right now their current forward p/e ratios
about 10x and that looks pretty good when we compare to the five-year average
of about 14 X now if SunTrust stock were to move back to its 5-year average that
would have it trading at about 81 dollars a share I think that it has a
possibility of doing that through 2019 our next value stock is Air Products and
chemicals ticker symbol APD APD is in the material sector and basically what
they do is they sell a ton of different products to a ton of different
industries products like oxygen nitrogen helium to places like hospitals or
welding shops basically that's what they do now once again I think that APD is a
good dividend stock because it's currently has a dividend yield of about 2.8
percent which is decent and when we look at their forward p/e well currently
they're trading at about 18 X which is sure higher than our other stocks but
it's not bad when you compare to the five-year average when we look at
their five-year average their five-year averages about 20x now APD is a bit
different from SunTrust because APD struggled back in 2015 and 2016 and it's
now starting to pick up again from a business standpoint I think APD stock
could end up being a bit more volatile than SunTrust but I do expect them to do
decent in 2018 and in the meantime they get a decent dividend yield now for our
next company we have Eaton Corp ticker symbol ETN Eaton is an industrial company
and what they do is a manufacture products for the industrial sector the
construction sector commercial sector and aerospace things like that and
they've had decent growth when it comes to earnings per share and analysts are
expecting that growth to continue into 2019 I think it's a pretty good dividend
stock because they have a dividend yield close to about 3.8 percent and they have
a really good dividend coverage ratio of more than 3x
which means that they have plenty of earnings to support their dividend and
maybe maybe even support an increase in dividends now when we look at their
forward p/e ratio we could see that they have a forward p/e of about 12x and this
is below their five-year average of 14x in fact if we look at their current
price of about $69 per share if Eaton were to trade at their own five-year
historical average that would be almost 20 percent higher than where the stock
is right now so to me that makes it a pretty good candidate for a value stock
okay we're moving along nicely here jumping to our fourth company our fourth
company is Royal Caribbean ticker symbol RCL Royal Caribbean is a cruise line
company and when I first came across this company was actually a bit hesitant
because I've seen some news over the past quarter or two that RCL was
facing some cost headwinds when it comes to their business and I thought that
might hinder profits going forward but the more I researched it the more I
realized that they're also facing increased demand for their products as
well as introducing some new technologies specifically regarding that
they have a location-based app and other things like that that have really
been helping their business overall the more I researched the more I was
impressed by it and that's before we get to their 2.7 percent dividend yield
and an earnings per share chart that looks like this going back to 2012 now
personally I would have thought that a stock that was growing earnings per
share like that well I would have expected them to trade at a premium
instead they appear to be trading at a discount to their own historical average
now when we look at their current forward p/e ratio they're trading at
about 11 X right now compare that to the five-year average I've bought 14 X now
one thing I think it's important to point out is that the reason one of the
reasons that RCL has been able to grow their earnings per share like that
is that it's because they've been able to improve margins consistently over the
past few years so that really helps grow earnings per share but the downfall with
that is you can only grow margins so far eventually margins will hit a peak but
that being said RCL stock doesn't seem to be reflecting the fact that
their business is improving their margins are improving so I think that as
they begin to realize that and if they simply get back to their 5 yards even if
they don't trade it a premium to it well that's 20 percent higher than their
current stock price of about 104 dollars so to me that makes RCL looks like a
pretty good value stock in addition to their nice dividend okay now on to
number 5 and I just want to point out these companies are in no particular
order I deliberately spread them around so we can all take from it whatever we
find is helpful now our number 5 company comes out of the technology sector and
that is Broadcom ticker symbol AVGO Broadcom is a semiconductor company and
they make a lot of different products in the technology segment and they've been
quite popular over the past few years there are also a great dividend stock
since they have a dividend yield of more than four percent at about four point
three percent and I'm not all that concerned about their ability to cover
the dividend since they have a dividend coverage ratio of more than four times
what they're paying out right now which also implies if they wanted to they
could increase it now when we jump to their forward p/e well we could see that
their forward p/e is about 10x compared to next year's earnings meanwhile their
five-year average is about 14x which means that if their stock were to be
trading at their five-year average or close to it well that would be about 30%
higher than the current stock price making AVGO
a pretty good value stock in addition to being a pretty good dividend stock
now I recognize that I went fairly quickly through each of these companies
and I could easily make a longer video on any one of these companies or on each
of them I didn't want to make this video too long so I just touched on the
highlights but if you'd be interested in seeing a more in-depth video on any one
of these stocks or all of the stocks are perhaps a different stock please let me
know in the comments below and I'd be happy to add it to the list I'm always
looking for new companies to analyze and I want to thank you for sticking with me
all the way to the end of the video I really do appreciate it if you haven't
done so yet hit the thumbs up hit subscribe and I look forward to seeing
the next video thank you