Retail investors often fall prey to familiarity bias. Most of them are familiar with retail stocks and brands they purchase, but are less familiar with businesses that sell to other businesses. Based on this lack of familiarity, they trust investing in names and brands they see and use on a daily basis.
Rational investors should try to correct for this bias by actively trying to consider firms they are not personally familiar with. A list of 6 business to business stocks are provided below that offer dividend yields and defensible long term returns to shareholder equity:
ABM Industries Inc. (ABM) recently traded at $20.44 per share. At this price level, the stock has a 2.7% dividend yield. For 10 out of the past 10 fiscal years, a share of ABM paid a total of $4.37 in dividends. Of these dividend payments, a total of $2.48 were paid in the last five years.
ABM shareholders have suffered a -20.3% change in share price over the past year. At present, shares of this small cap stock trade at a price-to-book ratio of 1.4, a price-to-earnings multiple of 15.3, and a price-to-sales multiple of 0.3 (trailing twelve months). Over the past decade shareholders savored a 11.4% average annual return on equity.
Air T Inc. (AIRT) recently traded at $8.67 per share. At this price level, the stock has a 2.9% dividend yield. For 9 out of the past 10 fiscal years, a share of AIRT paid a total of $2.18 in dividends. Of these dividend payments, a total of $1.46 were paid in the last five years.
AIRT shareholders have endured a -8.6% change in share price over the past year. At present, shares of this nano cap stock trade at a price-to-book ratio of 0.8, a price-to-earnings multiple of 10.3, and a price-to-sales multiple of 0.2 (trailing twelve months). Over the past decade shareholders savored a 12.8% average annual return on equity.
Alexander & Baldwin, Inc. (ALEX) recently traded at $39.75 per share. At this price level, the stock has a 3.2% dividend yield. For 10 out of the past 10 fiscal years, a share of ALEX paid a total of $10.36 in dividends.
ALEX shareholders have seen a 2.2% change in share price over the past year. At present, shares of this small cap stock trade at a price-to-book ratio of 1.5, a price-to-earnings multiple of 28.0, and a price-to-sales multiple of 1.0 (trailing twelve months). Over the past decade shareholders savored a 10.8% average annual return on equity.
Overseas Shipholding Group Inc. (OSG) recently traded at $9.2899 per share. At this price level, the stock has a 9.4% dividend yield. For 10 out of the past 10 fiscal years, a share of OSG paid a total of $10.31 in dividends.
OSG shareholders have suffered a -71.9% change in share price over the past year. At present, shares of this micro cap stock trade at a price-to-book ratio of 0.2, a price-to-earnings multiple of 0.0, and a price-to-sales multiple of 0.3 (trailing twelve months). Over the past decade shareholders savored a 12.5% average annual return on equity.
Paychex Inc. (PAYX) recently traded at $29.26 per share. At this price level, the stock has a 4.4% dividend yield. For 10 out of the past 10 fiscal years, a share of PAYX paid a total of $8.16 in dividends. Of these dividend payments, a total of $5.71 were paid in the last five years.
PAYX shareholders have sustained a -1.5% change in share price over the past year. At present, shares of this large cap stock trade at a price-to-book ratio of 6.9, a price-to-earnings multiple of 19.9, and a price-to-sales multiple of 5.0 (trailing twelve months). Over the past decade shareholders savored a 32.4% average annual return on equity.
United Parcel Service, Inc. (UPS) recently traded at $70.64 per share. At this price level, the stock has a 2.9% dividend yield. For 10 out of the past 10 fiscal years, a share of UPS paid a total of $13.56 in dividends.
UPS shareholders have seen a 0.2% change in share price over the past year. At present, shares of this large cap stock trade at a price-to-book ratio of 8.8, a price-to-earnings multiple of 17.2, and a price-to-sales multiple of 1.3 (trailing twelve months). Over the past decade shareholders savored a 24.9% average annual return on equity.
How familiar a stock is to you is irrelevant. Instead, consider them on the merits of valuation and commitment to shareholder income (dividends) and wealth (return on equity) over many years.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Disclaimer: This article was written to provide investor information and education, and should not be construed as a guarantee or investment advice. I have no idea what your individual risk, time-horizon, and tax circumstances are: please seek the personal advice of a financial planner. This article uses third-party data and may contain approximations and errors. Please check estimates and data for yourself before investing. I repeat: this research does NOT constitute a guarantee.
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