📊 Peter Lynch's Top 4 Dividend Stocks
4 Hidden Gems? 💎
Peter Lynch is one of the greatest investors of all time.
From 1977 to 1990, Lynch averaged a 29.2% annual return.
Peter Lynch also had a criteria for selecting stocks.
How Peter Lynch Selects Stocks:
📉 Trailing P/E < 25
🔮 Forward P/E < 15
⚖️ Debt/Equity < 35%
📈 EPS Growth > 15%
📊 PEG Ratio < 1.2
💰 Market Cap > $5 billion
I just ran this screen using Seeking Alpha, and found only 4 dividend stocks met the criteria:
1. QFIN - Qifu Technology 📊
Company Profile
Qifu Technology is a Chinese company that provides digital consumer finance platforms. It offers e-commerce loans, enterprise loans, and invoice loans to small and medium-sized enterprise (SME) owners, serving financial institutions, consumers, and micro-enterprises.
Lynch Metrics:
📉 Trailing P/E: 7.82
🔮 Forward P/E: 6.30
⚖️ Debt/Equity: 6.70%
📈 EPS Growth: 27.88%
📊 PEG Ratio: 0.52
💰 Market Cap: $6.87B
💸 Forward Dividend Yield: 3.17%
Qifu Technology is not only rewarding shareholders with a growing dividend, but has also repurchased 16.5% of it’s outstanding shares in the last 2 years! The main risk here, is the fact that this is a Chinese stock.
Qifu Technology is up 150% in the last year.
“'Pay close attention to the cannibals – the businesses that are eating themselves by buying back their stock.” - Charlie Munger
2. JD - JD.com 🛒
Company Profile
JD.com is a leading Chinese e-commerce company, often considered the Amazon of China. It operates an online marketplace, offering a wide range of products including electronics, apparel, and home goods. JD.com is known for its vast logistics network, which enables efficient delivery services across China.
Lynch Metrics:
📉 Trailing P/E: 11.27
🔮 Forward P/E: 8.7
⚖️ Debt/Equity: 28.65%
📈 EPS Growth: 18.38%
📊 PEG Ratio: 1.10
💰 Market Cap: $60.19B
💸 Forward Dividend Yield: 2.41%
JD.com is already a massive company with a $60 billion market cap, yet still rapidly growing. They’ve grown free cash flow from 26.2B Yuan in 2021 to 43.7B Yuan in 2024. Again, the main risk here is geopolitical. This is a chinese stock.
JD.com is up 56% in the last year.
3. PUK - Prudential plc 🏦
Company Profile
Prudential plc is a British multinational life insurance and financial services company. It provides a range of insurance and investment products to customers worldwide, with a significant presence in Asia, the United States, and the United Kingdom. Prudential focuses on life insurance, health insurance, and asset management services.
Lynch Metrics:
📉 Trailing P/E: 12.75
🔮 Forward P/E: 10.71
⚖️ Debt/Equity: 26.74%
📈 EPS Growth: 25.04%
📊 PEG Ratio: 0.62
💰 Market Cap: $27.96B
💸 Forward Dividend Yield: 3.04%
Insurance businesses are sticky, and Prudential plc is no different. Prudential has existed since 1848, weathering wars, recessions, and market cycles, while evolving into a global financial powerhouse with a strong presence across Asia and Africa.
Prudential plc is up 11.5% in the last year.
4. GOLD - Barrick Gold 🥇
Company Profile
Barrick Gold is one of the world's largest gold mining companies, headquartered in Canada. It operates mines and projects in various countries, producing gold and copper. Barrick Gold is known for its focus on operational efficiency and has a history of returning value to shareholders through dividends.
Lynch Metrics:
📉 Trailing P/E: 7.82
🔮 Forward P/E: 6.30
⚖️ Debt/Equity: 6.70%
📈 EPS Growth: 27.88%
📊 PEG Ratio: 0.52
💰 Market Cap: 6.87B
💸 Forward Dividend Yield: 2.07%
When markets get shaky, gold shines. Barrick Gold has been mining since 1983. With operations across North America, South America, Africa, and the Middle East, Barrick turns global reserves into reliable cash flow. It’s a business built on staying power, not speculation.
Barrick Gold is up 24.5% in the last year.
Conclusion
Peter Lynch’s approach emphasizes finding undervalued growing companies with strong fundamentals.
While QFIN and JD.com present higher geopolitical risk due to their Chinese operations, their growth trajectories remain impressive. On the other hand, PUK and GOLD provide stability and consistent dividend income.
Check out these resources:
Tickerdata 🚀 (My automated spreadsheets and instant stock data for Google Sheets!)
Interactive Brokers 💰 (My favorite place to buy and sell stocks all around the world!)
Seeking Alpha 🔥 (My favorite investment research platform!)
The Dividend Report 📊 (Free Newsletter for Straightforward Dividend Stock News)
Other News:
At the start of every month, I send out a newsletter to my paid newsletter subscribers with a list/spreadsheet of all the dividend stocks that I believe to be currently undervalued.
If you’d like to receive this sheet, you can sign up here:
That’s all for now!
See you next week!
Dividendology 🚀
Is Reagan your president?
Have you ever done something similar for your process? I’ve built a dividend growth screener in Seeking Alpha, but would be interested to see what variables you include.