15 Cheapest Stocks With Share Buyback Potential

As you may know, I love growing dividends but my dividend approach has a great fault: It doesn’t take great cash cow stocks with no dividend payments into account.

Dividend payments are only one way to distribute money back to shareholders. Another way is when companies buy their own shares back. Some companies repurchase their shares instead of a dividend payment and they try to boost earnings per share growth with this model. It’s a very tax-optimized method, especially if you use debt for this process as happened with Apple (AAPL).

I also look at the number of shares repurchased when I consider buying a stock. The total amount of cash distribution is critical in these cases and not the amount of dividend payments in the past. Some companies gave back money in the amount of their whole company over the recent five years and they try to follow this approach for the future. That’s what I really like.

So today I'm screening the Share Buyback Achievers Index in search of the cheapest dividend stocks with additional growth potential. I selected stocks with a low forward P/E (under 15) as well as a P/B and P/S ratio of less than one. In addition, the five year earnings per share should grow at least with five percent or more.

Fifteen stocks fulfilled the above mentioned criteria. Half of the results pay a dividend between 1 percent and 2.5 percent. The rest are only focused on share buybacks. The good thing is that nine companies have a current buy or better rating.

Xerox Corporation (XRX) has a market capitalization of $11.01 billion. The company employs 143,200 people, generates revenue of $22.390 billion and has a net income of $1.071 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $3.029 billion. The EBITDA margin is 13.53 percent (the operating margin is 6.02 percent and the net profit margin 4.78 percent).

Financial Analysis: The total debt represents 28.28 percent of the company’s assets and the total debt in relation to the equity amounts to 71.52 percent. Due to the financial situation, a return on equity of 10.01 percent was realized. Twelve trailing months earnings per share reached a value of $0.92. Last fiscal year, the company paid $0.17 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 9.70, the P/S ratio is 0.49 and the P/B ratio is finally 0.95. The dividend yield amounts to 2.56 percent and the beta ratio has a value of 1.75.



Assurant (AIZ) has a market capitalization of $3.84 billion. The company employs 14,500 people, generates revenue of $8.508 billion and has a net income of $483.70 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $2.270 billion. The EBITDA margin is 26.69 percent (the operating margin is 8.91 percent and the net profit margin 5.69 percent).

Financial Analysis: The total debt represents 3.36 percent of the company’s assets and the total debt in relation to the equity amounts to 18.75 percent. Due to the financial situation, a return on equity of 9.62 percent was realized. Twelve trailing months earnings per share reached a value of $5.23. Last fiscal year, the company paid $0.81 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 9.53, the P/S ratio is 0.45 and the P/B ratio is finally 0.76. The dividend yield amounts to 2.01 percent and the beta ratio has a value of 1.44.




Unum Group (UNM) has a market capitalization of $7.67 billion. The company employs 9,100 people, generates revenue of $10.515 billion and has a net income of $894.40 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1.398 billion. The EBITDA margin is 13.30 percent (the operating margin is 11.88 percent and the net profit margin 8.51 percent).

Financial Analysis: The total debt represents 5.16 percent of the company’s assets and the total debt in relation to the equity amounts to 37.28 percent. Due to the financial situation, a return on equity of 10.66 percent was realized. Twelve trailing months earnings per share reached a value of $3.23. Last fiscal year, the company paid $0.47 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 8.90, the P/S ratio is 0.73 and the P/B ratio is finally 0.90. The dividend yield amounts to 1.81 percent and the beta ratio has a value of 1.72.




Take a closer look at the full list of the cheapest share buyback achievers. The average P/E ratio amounts to 11.71 and forward P/E ratio is 9.71. The dividend yield has a value of 0.88 percent. Price to book ratio is 0.77 and price to sales ratio 0.60. The operating margin amounts to 12.80 percent and the beta ratio is 1.86. Stocks from the list have an average debt to equity ratio of 0.62.

Here is the full table with some fundamentals (TTM):

Related stock ticker symbols:
XRX, AIZ, UNM, AFG, BBOX, AGII, LNC, CNO, MWW, AIG, PJC, GTI, GPRE, TECD, AMKR

Disclosure: I am long INTC, JNJ. I receive no compensation to write about these specific stocks, sector or theme. I don't plan to increase or decrease positions or obligations within the next 72 hours.

For the other stocks: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I receive no compensation to write about any specific stock, sector or theme.