This article will focus on a stock screen that I ran looking for high paying dividend stocks. The stock screener had the following attributes:
- A market capitalization of a small cap stock or greater.
- A component of the NYSE or the NASDAQ
- A p/e ratio of 10 and/or below the industry average
- A dividend yield of at least 7%
- EPS annual growth for the current fiscal year of at least 15%
- 5 consecutive quarters of non-negative earnings.
Please note that on the following stocks, no further research other than what is being presented has been conducted. Please conduct your own research and due diligence before deciding if you would like to invest in these stocks. This is just providing information on what I came across when looking for these type of stocks. This screener was run on 12/28/2012, after the market close. It produced six stocks. Of these stocks, two of them were Omega Healthcare Investors Inc. (OHI) and SouFun Holdings Limited ADR (SFUN). Since I have already written about those two stocks recently, (please see my other articles on here to find those), I will not highlight them again here. Here are the four stocks.
The first stock that this screener produced is Apollo Commercial Real Est. Finance Inc (ARI). Over the past 52 weeks, the stock is up 16.5%. It currently has a market capitalization of $457.4 million. The company is in the real estate operations industry. The company currently pays an annual dividend of $1.60 per share, giving it a current yield of 9.5%. This dividend is paid out quarterly. It has a trailing p/e ratio of 8.89.
Apollo Commercial Real Est. Finance Inc is a real estate investment trust that acquires and manages mortgage related loans and debt. Upon looking at its most recent September 29, 2012 balance sheet, it has $286 million in cash. Long-term debt is $243 million. Its debt to equity ratio based on this information, is 56.9%. In looking at its most recent cash flow statement, also from September of 2012, it pays out about $8.2 million per quarter in dividends. Its quarterly dividend has been steady at $0.40 per share since September of 2010. It has a current price target by analysts of $17.58 per share. A very recent article on Forbes noted that this company is selling below its current book value. In an article written earlier in the year on Seeking Alpha, the author noted that Apollo had a net margin and an earnings per share growth rate that were in excess of 50%. This is a great example that shows strong profitability.
The next stock is Global Partners LP (GLP). Please note that with a limited partnership, owning the stock may provide you with a different tax situation than owning shares of a regular corporation would. Over the past 52 weeks, this stock is up 15.9%. It currently has a market capitalization of $689.9 million. The company is in the oil and gas operations industry. It currently pays an annual dividend of $2.13 per share, which gives it a current yield of 8.5%. Its dividend is paid out quarterly. It has a trailing p/e ratio of 19.11 and a forward p/e ratio of 13.76.
Global Partners LP distributes petroleum products, fuel, natural gas, and crude oil. Upon looking at its most recent balance sheet, it has about $61 million in cash. Based on this balance sheet, it has a debt to equity ratio of about 216%. Looking at its cash flow statements for 2012, there were significant inflows from net borrowings in the first and third quarters, which proves that the company has been able to obtain additional capital when needed. Recently in November, the company signed a long-term agreement to supply and operate about 90 Getty Realty gas stations in metro New York. In a Seeking Alpha article earlier in the year in July, the author listed seven compelling reasons to own the stock. The company supplies over 1,000 gas stations in addition to servicing other types of customers according to this article.
Third, we have Martin Midstream Partners LP (MMLP). Over the past 52 weeks, the stock is down 11.36%. It currently has a market capitalization of $801.8 million. The company is in the oil and gas operations industry. It currently pays a dividend of $3.08 and that gives it a current yield of 10%. Its dividend is also paid out quarterly. It has a trailing p/e ratio of 7.87 and a forward p/e ratio of 18.62.
Martin Midstream Partners LP transports, stores, and markets petroleum products in the United States Gulf Coast region. It is currently trading near its 52 week low ($29.46) as it closed at $30.53 on 12/28/2012. In a recent Forbes article, it was rated a top 10 dividend paying energy stock. This article shows that the company has steadily paid a dividend since 2003, and also that the amount of the dividend has been on the rise as well. So far, for the first three quarters of 2012, the company has beaten consensus earnings estimates in two of the three quarters. Based on its September 2012 balance sheet, it has a debt to equity ratio of 69.25%. Insiders have been purchasing shares of its stock during 2012 as well. Since November 1, 2012, there have been nine different individual insider transaction purchases. I like to see insiders purchasing shares of a stock, as it can be an indication that the stock is undervalued, particularly in the eyes of company officials.
Lastly, we have VimpelCom Ltd ADR (VIP). Over the past 52 weeks, the stock is up 14.61%. It currently has a market capitalization of $17.5 billion. The company is in the communications services industry. It currently pays a dividend of $2.72 annually, giving it a current yield of 25.3%. It has a trailing p/e ratio of 17.54 and a forward p/e ratio of 8.83. This quoted dividend is not clear to me though, as it paid out $0.80 to shareholders for a yearly dividend on December 24, 2012. For purposes of this article, I would say the dividend yield would be based on this $0.80 payout, giving it a current yield of 7.68%.
VimpelCom Ltd's corporate headquarters are in Amsterdam. It provides telecommunication services under various brand names. As an investor, I like when a company has several brand names as I feel it adds value to the company. Each brand has the potential to build up a significant following and it can also provide a future opportunity of a spin-off if the brand really takes off. 35% of the company is owned by insiders and 5% owners. The company now owns 50% of Russian mobile retailer Euroset. Based on its 12/31/2011 balance sheet, it has $2.35 billion of cash. Its market capitalization is $17.5 billion, which makes cash as of 12/31/2011 13.43% of that. VimpelCom was in plans to sell some of its Asian and African businesses for upwards of $60 million. Focusing on strength in core markets is a great way that companies can assess their profitability and find ways to improve the bottom line. When I see management making these kinds of decisions, it shows me that they are looking to continuously improve shareholder value.
2012 Price Performance - The following is a chart showing a one year price percentage performance for these companies versus the S&P 500.
The price performance of these companies in 2012 versus the S&P 500 has been quite favorable. An equal investment in these companies would have returned an average 9.89%, compared to 12.23% for the S&P 500. This does not include dividends, however. When factoring in dividends, the average return would have been greater than 12.23%. Based on current dividend yields (which is conservative because the stocks have gone up overall in 2012), in total that would bring an additional 35.68% return. On average, for the four stocks that would be an 8.92% return from dividends. This brings their average total return for the year to 18.81% versus 12.23% for the S&P 500.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.