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I have searched for profitable growth companies that pay rich dividends and that raise their payouts significantly each year. I also looked for companies where the average analysts' recommendation is a buy or better. I have elaborated a screening method which shows stock candidates following these lines. Nonetheless, the screening method should only serve as a basis for further research.

The screen's formula requires all stocks to comply with all following demands:

1. The stock is included in the Russell 3000 index. Russell Investment explanation:

The Russell 3000 Index measures the performance of the largest 3000 U.S. companies representing approximately 98% of the investable U.S. equity market. The Russell 3000 Index is constructed to provide a comprehensive, unbiased, and stable barometer of the broad market and is completely reconstituted annually to ensure new and growing equities are reflected.

2. Earnings growth estimates for the next 5 years (per annum) is greater than 12%.

3. Dividend yield is greater than 3.0%.

4. Annual rate of dividend growth over the past five years is greater than 5%.

5. The PEG ratio is less than 1.70.

6. Average analyst recommendations are bullish (less than 2).

After running this screen on November 13, 2012, before the market open, I obtained as results the 5 following stocks:

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Electro Rent Corporation (NASDAQ:ELRC)

Electro Rent Corporation engages in the rental, lease, and sale of new and used electronic test and measurement equipment in the United States and internationally.

Electro Rent Corporation has no debt at all and it has a low forward P/E of 13.33 and a low PEG ratio of 1.07. The average annual earnings growth estimates for the next 5 years is 15%. The forward annual dividend yield is very high at 5.41% and the payout ratio is 87%. The company is trading 21.6% below its 52-week high and has 49% upside potential based on the consensus mean target price of $22.00. Only one analyst is covering the stock and he rates it as a strong buy. On October 08, the company reported its 1Q fiscal 2013 financial results. On that occasion, Daniel Greenberg, Chairman and CEO of Electro Rent said:

Our business held steady during the quarter, as Electro Rent's proven ability to provide increasing value to our rental customers weighed in against declines in our new sales equipment business. Business in all our rental markets continued to grow and strengthen during the first quarter. In addition, our used equipment business moved upwards.

The very low multiples and the very high dividend yield make the ELRC stock quite attractive.

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Chart: finviz.com

Energy Transfer Equity, L.P. (NYSE:ETE)

Energy Transfer Equity, L.P. owns and operates a diversified portfolio of energy assets in the natural gas, natural gas liquids and propane sectors in the United States.

Energy Transfer has a forward P/E of 18.49 and a low PEG ratio of 1.27. The average annual earnings growth estimates for the next 5 years is very high at 18.30%. The forward annual dividend yield is very high at 5.56%. Among the nine analysts covering the stock, two rate it a strong buy, six rate it a buy and only one rates it a hold. On November 07, Energy Transfer reported its 3Q financial results. On that occasion, the company said that distributable cash flow, as adjusted, for Energy Transfer Equity was $189.2 million for the three months ended September 30, 2012, an increase of $62.9 million over the three months ended September 30, 2011. All these factors make the stock quite attractive.

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Chart: finviz.com

Ingles Markets Inc. (NASDAQ:IMKTA)

Ingles Markets Incorporated operates a supermarket chain in the Southeast United States.

Ingles Markets has a very low trailing P/E of 9.43 and even lower forward P/E of 8.34, the PEG ratio is also very low at 0.65. The price to sales ratio is very low at 0.11 and the price to book value is also very low at 0.86. The average annual earnings growth estimates for the next 5 years is quite high at 14.50%. The forward annual dividend yield is very high at 4.16% and the payout ratio is only 39.3%. Only one analyst is covering the stock and he rates it as a buy. The very low multiples and the very high dividend yield make the stock quite attractive.

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Chart: finviz.com

Mine Safety Appliances Co. (NYSE:MSA)

Mine Safety Appliances engages in the development, manufacture, and supply of products that protect people's health and safety in the fire service, homeland security, oil and gas, construction, and other industries, as well as military worldwide.

Mine Safety Appliances has a low PEG ratio of 1.05 and the average annual earnings growth estimates for the next 5 years is quite high at 15%. The forward annual dividend yield is quite high at 3.01% and the payout ratio is only 47.5%. Among the five analysts covering the stock, three rate it a strong buy and two rate it a hold.

On October 24, Mine Safety Appliances reported its 3Q financial results. On that occasion, William M. Lambert, MSA President and CEO said:

Despite the slowdown we are seeing in certain geographic markets, the quarterly results we achieved from our primary areas of strategic focus in core product groups and emerging markets are providing a degree of encouragement. Excluding the impact of weakening foreign currencies, our quarterly revenue from our global core product groups increased 7 percent, with core product group sales to emerging markets up 18 percent.

The MSA stock looks quite attractive.

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Chart: finviz.com

Prudential Financial, Inc. (NYSE:PRU)

Prudential Financial provides various financial products and services in the United States, Asia, Europe and Latin America.

Prudential Financial has a very low forward P/E of 6.62 and a PEG ratio of 1.61. The price-to-sales ratio is very low at 0.48 and the price-to-book value is also very low at 0.64. The price to free cash flow for the trailing 12 months is very low at 1.92 and the average annual earnings growth estimates for the next 5 years is 12.29%. The forward annual dividend yield is quite high at 3.07% and the payout ratio is 60.7%. The company is trading 19.9% below its 52-week high and has 30% upside potential based on the consensus mean target price of $68.07. Among the twenty analysts covering the stock, five rate it a strong buy, ten rate it a buy and five rate it a hold. During the third quarter, the company acquired 2.7 million shares of its common stock under its current share repurchase authorization at a total cost of $150 million, for an average price of $55.77 per share. From the commencement of share repurchases in July 2011 through September 30, 2012, the company has acquired 31.3 million shares of its common stock under its share repurchase authorizations at a total cost of $1.65 billion, for an average price of $52.72 per share. All these factors make the stock quite attractive.

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Chart: finviz.com

Source: 5 High-Yield Dividend Growth Stocks With High Ratings