3 Dividend Plays From the S&P Global Challengers

In mid-July, Standard & Poor's published its Global Challengers List for 2008.  According to the company, this list identifies "300 mid-size companies that show the highest growth characteristics along dimensions encompassing intrinsic and extrinsic growth.  These companies are expected to emerge as challengers to the world's leading companies."  This is a good place point to look for companies you may want to add to your watchlist.  To compile the list, S&P considered listed companies from every corner of the world.  More than 25% of the firms are in China, but there are also 73 domestic stocks on the list, which I have culled through to find companies paying a 'reasonable' dividend.   Below are three of the best. Each company is trading well below its 52 week high:

Barnes Group, Inc. (Ticker: B) This is an aerospace and industrial company with operations in the US, Canada, Mexico, Brazil, Europe, China, Thailand and Singapore.  It has a market cap of $1.3 billion and currently pays a dividend of 2.7%.  Barnes recently reported that it expects a 32% increase in earnings per share this year over 2007's numbers. The current P/E is 12.5 and price to earnings growth (PEG ratio) is 0.4. The current payout ratio is 30%.

Albemarle Corporation (Ticker: ALB) This company has a market cap of $3.4 billion.  It develops and manufactures specialty chemicals worldwide.  Albemarle's second quarter earnings of $0.67 per share were up 22% from last year and beat analyst expectations by $0.02.  Shares currently trade at 14.5 times earnings and the company pays a dividend of 1.3%, with a payout ratio of 18%.  I calculate the PEG ratio as 0.8.  Recently, the company has said that the rising cost of raw materials has been a challenge in 2008, but it has still been able to grow its net income.

Greif Inc. (Ticker: GEF) Greif has a market cap of $2.8 billion and a dividend yield of 2.6%. Its payout ratio is 31%.  GEF has three main businesses: industrial packaging, paper packaging, and timber.  It is a global leader in the packaging industry and has operations in 45 countries. Shares currently trade at a P/E of 16.4 times earnings and the PEG is 0.8.  Greif reported its second quarter at the beginining of June, and earnings per share was $0.92, up from $0.66 the prior year.  The company also raised its guidance for 2008 by $0.10 per share.

Disclosure: The author does not own shares of B, ALB, or GEF.