In this series, we look through the most recent Dividend Channel ”DividendRank” report, and then we cherry pick only those companies that have experienced insider buying within the past six months. The officers and directors of a company tend to have a unique insider’s view of the business, and presumably the only reason an insider would choose to take their hard-earned cash and use it to buy stock in the open market, is that they expect to make money — maybe they find the stock very undervalued, or maybe they see exciting progress within the company, or maybe both. So when stocks turn up that see insider buying, and are also top ranked, investors are wise to take notice. One such company is Prudential Financial, which saw buying by Chief Executive Officer Charles F. Lowrey.
Back on September 9, Lowrey invested $627,600.00 into 7,500 shares of PRU, for a cost per share of $83.68. In trading on Thursday, shares were changing hands as low as $94.60 per share, which is 13.0% above Lowrey’s purchase price. It should be noted that Lowrey has collected $1.00/share in dividends since the time of their purchase, so they are currently up 14.2% on their purchase from a total return basis. Prudential Financial Inc shares are currently trading -0.50% on the day. The chart below shows the one year performance of PRU shares, versus its 200 day moving average:
Looking at the chart above, PRU’s low point in its 52 week range is $75.6094 per share, with $106.395 as the 52 week high point — that compares with a last trade of $94.81.
The DividendRank report noted that among the coverage universe, PRU shares displayed both attractive valuation metrics and strong profitability metrics. For example, the recent PRU share price of $95.27 represents a price-to-book ratio of 0.6 and an annual dividend yield of 4.20% — by comparison, the average company in Dividend Channel’s coverage universe yields 4.1% and trades at a price-to-book ratio of 2.2. The report also cited the strong quarterly dividend history at Prudential Financial Inc, and favorable long-term multi-year growth rates in key fundamental data points.
The report stated, ”Dividend investors approaching investing from a value standpoint are generally most interested in researching the strongest most profitable companies, that also happen to be trading at an attractive valuation. That’s what we aim to find using our proprietary DividendRank formula, which ranks the coverage universe based upon our various criteria for both profitability and valuation, to generate a list of the top most ‘interesting’ stocks, meant for investors as a source of ideas that merit further research.”
The annualized dividend paid by Prudential Financial is $4/share, currently paid in quarterly installments, and its most recent dividend ex-date was on 11/25/2019. Below is a long-term dividend history chart for PRU, which the report stressed as being of key importance. Indeed, studying a company’s past dividend history can be of good help in judging whether the most recent dividend is likely to continue.