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It is possible to judge whether a stock is trending up or down by comparing its current share price to its moving average. Stocks trading above their moving averages are considered to be in an uptrend, and those trading below their moving averages are considered to be in a downtrend. The distance that a stock is trading above or below its moving average reflects the trend strength. The 200-day moving average is used for measuring long-term trends and the 50-day moving average is used for measuring mid-term trends.

I have searched for profitable companies that pay rich dividends and that raise their payouts significantly each year. I also looked for companies which are in mid-term uptrend and in long-term uptrend. Stocks in uptrend are performing well and are in a buying mode.

I have elaborated on 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. More on the Russell Index:

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. Dividend yield is greater than 3.0%.

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

4. Stock price is above 50-day simple moving average (mid-term uptrend).

5. Stock price is above 200-day simple moving average (long-term uptrend).

After running this screen on November 20, 2012, before the market open, I arrived at the 5 following stocks:

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Eaton Corporation (NYSE:ETN)

Eaton Corporation operates as a diversified power management company worldwide.

Eaton Corporation has a low debt (total debt to equity is 0.50) and it has a very low trailing P/E of 12.17 and a very low forward P/E of 11.42 and the PEG ratio is at 1.35. The forward annual dividend yield is quite high at 3.02% and the payout ratio is very low at 36.8%. The stock price is 6.65% above its 50-day simple moving average and 11.25% above its 200-day simple moving average. On October 31, the company reported its 3Q financial results. On that occasion, Alexander M. Cutler, Eaton chairman and chief executive officer, said (here):

Our third quarter results came in very close to our expectations despite the slowdown in economic growth which we discussed in September at several investment conferences. Economic growth in the EU and China remained subdued during the quarter, while industrial activity in the U.S. decelerated during the quarter reflecting uncertainties over fiscal reforms that have led customers to hold back on purchases. As a result, we expect our markets for full year 2012 will show less growth than we had anticipated earlier in the year, with our markets for the year now estimated to grow between 1 to 2 percent.

In my opinion, the ETN stock is a promising investment candidate.

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Chart: finviz.com

H&R Block, Inc. (NYSE:HRB)

H&R Block, Inc. engages in the provision of tax preparation and related services to the general public in the United States, Canada, and Australia.

H&R Block has a low trailing P/E of 14.90 and a very low forward P/E of 9.96 and the PEG ratio is at 1.35. The forward annual dividend yield is very high at 4.44% and the payout ratio is at 66.1%. The stock price is 4.0% above its 50-day simple moving average and 11.91% above its 200-day simple moving average. Analysts recommend the stock, among the eight analysts covering the stock, five rate it as a strong buy and three rate it as a hold. All these factors make the stock quite attractive.

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Chart: finviz.com

Leggett & Platt, Incorporated (NYSE:LEG)

Leggett & Platt, Incorporated designs and produces various engineered components and products worldwide.

Leggett & Platt has a trailing P/E of 21.72 and a forward P/E of 16.62 and the PEG ratio is at 1.45. The forward annual dividend yield is very high at 4.31% and the payout ratio is at 93.5%. The average annual earnings growth estimates for the next 5 years is quite high at 15%. The stock price is 2.09% above its 50-day simple moving average and 19.67% above its 200-day simple moving average. On October 29, the company reported its 3Q financial results. Leggett & Platt met expectations on revenues and beat expectations on EPS. Compared to the prior-year quarter, revenue increased and earnings per share grew significantly, margins grew across the board. All these factors make the stock quite attractive.

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Chart: finviz.com

Sunoco Logistics Partners L.P. (NYSE:SXL)

Sunoco Logistics Partners L.P. engages in the transport, terminalling, and storage of crude oil and refined products in the United States.

Sunoco Logistics Partners has a low trailing P/E of 13.32 and a forward P/E of 15.15 and the PEG ratio is at 1.71. The forward annual dividend yield is very high at 3.78% and the payout ratio is at 50.4%. The stock price is 2.0% above its 50-day simple moving average and 22.0% above its 200-day simple moving average. On November 07, the company reported its 3Q financial results. Sunoco Logistics Partners beat expectations on revenues and on EPS. Compared to the prior-year quarter, revenue increased and earnings per share increased significantly, margins grew across the board. The SXL stock looks quite attractive.

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Chart: finviz.com

Meridian Bioscience Inc. (NASDAQ:VIVO)

Meridian Bioscience, Inc., a life science company, engages in the development, manufacture, sale, and distribution of diagnostic test kits.

Meridian Bioscience has a trailing P/E of 25.03 and a forward P/E of 20.02 and the PEG ratio is at 1.69. The forward annual dividend yield is very high at 3.80% and the payout ratio is at 95%. The average annual earnings growth estimates for the next 5 years is quite high at 14.8%. The stock price is 5.37% above its 50-day simple moving average and 8.55% above its 200-day simple moving average. On November 08, the company reported its fiscal 4Q financial results. Meridian Bioscience beat expectations on revenues and on EPS. Compared to the prior-year quarter, revenue increased and earnings per share increased significantly, margins grew across the board. The VIVO stock looks quite attractive.

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Chart: finviz.com

Source: 5 Dividend Stocks Yielding Above 3% In Uptrend