Money What do Fresenius & AT&T have in common besides the dividend aristocracy? Right, a low P / E!

14:10  21 october  2020
14:10  21 october  2020 Source:   fool.de

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 From the beginning of the 19th century to the 1950s, Aix-les-Bains was a popular holiday resort for the British aristocracy. 150 years of presence which have profoundly modified the city and its inhabitants. © Provided by Franceinfo Dubbed Anglomania , this large exhibition mounted by the municipal archives retraces 150 of the common history between Aix-les-Bains and the British.

Understanding Dividends in Arrears. Investors in preferred stock buy shares primarily for the That is, the company can buy them back and reissue them at a lower dividend rate if interest rates fall. Ordinary shares, also called common shares, give their owners the right to vote at company

One of the most common misrepresentations is from people who think that because their name contains the so-called particule or "de", they are therefore noble. Image copyright Alamy. Image caption Before the fall: Jean-Baptiste Charpentier's 1763 portrait of the Duc de Penthièvre and family.

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When asked what the shares of Fresenius (NYSE: ) and AT&T


) have in common, many foolish investors become presumably give this answer first: an attractive dividend. Despite considerable differences, the two share certificates are ultimately relatively reliable and strong distributors. Or dividend aristocrats.

But there is one more thing in common, which is also not insignificant: a low price-earnings ratio. Or in short: P / E ratio. Let's take a closer look at that today. One or the other investor may be surprised at how cheap the dividend quality is here.

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AT&T: Not just a high, reliable pourer!

One of the first stocks that has been part of the dividend aristocrats for some time is that of AT&T. The US telecommunications company has been increasing its dividend at least once a year for 35 years. The AT&T share has therefore been a member of this select group for around ten years. But the amount of the dividend is also attractive for this level of reliability:

Based on the current quarterly dividends of 0.52 US dollars and the current share price of 26.76 US dollars

(October 20, 2020, applicable to all prices) the dividend yield is 7.62%. A high value for a noble pourer.

However, AT & T's stock has an overall inexpensive valuation: based on the most recently reported adjusted earnings per share of $ 0.83 in the second quarter, for example, the payout ratio would be a moderate 62.6%. On an annualized basis, the price / earnings ratio would now be around 8. An exciting assessment. Yes, even for a stock that may continue to stagnate. Fresenius: Although less dividend, but… A second dividend share that also belongs to the circle of dividend aristocrats is that of Fresenius.

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Dividends are one way in which companies share the wealth generated from the business. Discover the issues that complicate these payouts for investors. Dividends have different tax and pricing implications for individuals and companies. For most dividends , this is usually not observed amid the

Regardless of dividends , a company with high earnings and a low price will have a low P / E ratio. At the very least, stocks priced below book value make tempting takeover targets. The dividend yield is a financial ratio that shows how much a company pays out in dividends each year relative to its stock

The DAX health group has been increasing its own distribution for 27 years in a row.

Fresenius has been a member of the aristocratic distributors for over two years. And still the only member from the DAX. Or generally in Germany.

The dividend yield is currently even more attractive again: based on the most recently distributed EUR 0.84 and the current share price of EUR 34.66, the dividend yield would now be 2.42%. Quite a high figure when we consider that Fresenius only used 25% of 2019 earnings per share for the dividend.

But let's stay with this point of view: based on 2019 earnings per share of EUR 3.38, the price / earnings ratio is now 10.25, which is also very moderate. A price-to-sales ratio of 0.55 also rounds off the overall inexpensive valuation of this defensive stock.

Low P / E: Not without reason ...?

As I said, the shares of AT&T and Fresenius are both strong and reliable distributors. But that's not all, because historically, the two dividend aristocrats' shares have an inexpensive valuation with low P / E ratios. So much for the basics.

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Dividends paid to shareholders who hold both long and short positions do not qualify for the reduced tax rate available to individuals in certain years. A corporation that distributes a property dividend must reduce its E & P by the adjusted basis of the property less any liability on the property.

Are there reasons for this low rating? Yes, definitely: The AT&T share will probably tread on the ground operationally for the foreseeable future. The DAX dividend aristocrat Fresenius is also going through a mixed financial year 2020, in which the return to at least moderate growth will not succeed.

With a long-term perspective, however, these two stocks might deserve a closer look right now. The valuation is cheap, the dividend strong and sustainable. That can be an attractive mix that enables solid returns over many years and decades. The post What do Fresenius & AT&T have in common besides the dividend aristocracy? Right, a low P / E! appeared first on

The Motley Fool Germany


Vincent owns shares in AT&T and Fresenius. The Motley Fool recommends Fresenius.

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