Owens & Minor, Inc. (NYSE:OMI) is a $1.8-billion supplier of healthcare products and third-party logistics and supply-chain management services. Currently, its dividend yields 3.1% on a payout ratio of 51%. The company has paid dividends each year since 1926 and has raised them for the past 14 years in a row. Its dividend grew, on average, by 14.2% per year over the past five years. Analysts forecast the company’s 5-year EPS CAGR at 7.8%. Even though the company operates in a highly competitive environment, it has been able to generate strong growth. Owens & Minor has gained market presence in Europe through Movianto acquisitions that closed in August 2012. Analysts estimate that the company’s future growth will be driven by tuck-in acquisitions and innovative solutions. Owens & Minor sees its revenue growing in 2013 by between 2% and 4%. The stock has attractive valuation. Its forward P/E of 15.7x is below its industry average ratio of 17.2x. Moreover, its price-to-book of 1.9 is well under the industry’s 2.8. Owens & Minor is popular with small-cap value investors Chuck Royce and David Dreman.
Tanger Factory Outlet Centers Inc. (NYSE:SKT) is a $3.1-billion REIT that owns and operates outlet shopping centers. This REIT has paid cash distributions since 1993 and has raised them each following year. Tanger Factory Outlet Centers’ cash distribution is currently yielding 2.5% with distribution coverage of 52% of funds from operations [FFO]. Over the past five years, its distributions grew, on average, by 3.2% annually. This year, the company hiked its distribution by a larger-than-average 5.0%. Jefferies analysts forecast this REIT’s FFO per share will grow 14% in 2013 and 9% in 2014. This compares to mall REITs and shopping centers’ 2013 FFO growth of 8.6% and 5.6%, respectively. The outlook is upbeat on continued resilience of the U.S. consumer—a condition that should improve with faster job growth—and an increased appeal of value shopping. This REIT is valued at 18.3x 2013-estimated FFO, compared to CBL & Associates Properties, Inc. (NYSE:CBL) 10.0x and Simon Property Group, Inc (NYSE:SPG) 20.0x. Fund manager Ken Heebner (Capital Growth Management) initiated a new position in the stock in the third quarter.
Lancaster Colony Corp. (NASDAQ:LANC) is a $1.9-billion company that sells specialty foods like salad dressings and fruit dips, as well as glassware and candles. The company has raised dividends each year for the last five decades. Its dividend is yielding 2.2% on a payout ratio of 41%. The food producer grew its dividends, on average, by 5.7% annually over the past five years. For the next five years, the company’s EPS CAGR is forecast to average 10%. The company’s bottom line is benefiting from stronger pricing of its specialty foods and easing commodity cost pressures. The company’s balance sheet is solid as it has no long-term debt. Its free cash flow yield is 3.4% and ROE is 18%. With a forward P/E of 16.9x, the stock is trading almost on par with its respective industry (forward P/E of 16.7x). The company also has a below-industry price-to-book ratio. Lancaster Colony will pay a $5 per share special dividend on December 28, 2013. Chuck Royce holds 1.27 million shares of this stock.
