from Forbes:Top Ranked Dividend Stock CPSI Enters Oversold Territory
DividendChannel.com DividendChannel.com, Contributor
The DividendRank formula at Dividend Channel ranks a coverage universe of thousands of dividend stocks, according to a proprietary formula designed to identify those stocks that combine two important characteristics — strong fundamentals and a valuation that looks inexpensive. Computer Programs & Systems Inc (NASD: CPSI) presently has an above average rank, in the top 50% of the coverage universe, which suggests it is among the top most “interesting” ideas that merit further research by investors.
But making Computer Programs & Systems Inc an even more interesting and timely stock to look at, is the fact that in trading on Friday, shares of CPSI entered into oversold territory, changing hands as low as $48.04 per share. We define oversold territory using the Relative Strength Index, or RSI, which is a technical analysis indicator used to measure momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30.
In the case of Computer Programs & Systems Inc, the RSI reading has hit 28.5 — by comparison, the universe of dividend stocks covered by Dividend Channel currently has an average RSI of 53.1. A falling stock price — all else being equal — creates a better opportunity for dividend investors to capture a higher yield. Indeed, CPSI’s recent annualized dividend of 1.44/share (currently paid in quarterly installments) works out to an annual yield of 2.92% based upon the recent $49.36 share price.
A bullish investor could look at CPSI’s 28.5 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. Among the fundamental datapoints dividend investors should investigate to decide if they are bullish on CPSI is its dividend history.
In general, dividends are not always predictable; but, looking at the history chart below can help in judging whether the most recent dividend is likely to continue.
CPSI Dividend History
Date Div*
11/08/11 0.360
08/09/11 0.360
05/10/11 0.360
02/08/11 0.360
11/08/10 0.360
08/10/10 0.360
05/07/10 0.360
02/10/10 0.360
11/05/09 0.360
08/04/09 0.360
05/07/09 0.360
02/10/09 0.360
11/04/08 0.360
08/05/08 0.360
05/07/08 0.360
02/08/08 0.360
10/31/07 0.360
08/01/07 0.360
05/02/07 0.360
02/12/07 0.360
11/01/06 0.360
08/02/06 0.360
05/03/06 0.360
02/10/06 0.360
11/02/05 0.220
08/03/05 0.220
05/04/05 0.220
02/09/05 0.220
11/03/04 0.120
08/04/04 0.120
05/04/04 0.120
02/11/04 0.120
11/03/03 0.085
08/01/03 0.085
05/07/03 0.085
* Data may be adjusted for splits; we are not responsible for data errors; always verify data with the company.
CPSI makes up 1.81% of the Dynamic Software Portfolio ETF (AMEX: PSJ)
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