This article will focus on a stock screen that I ran looking for high paying dividend stocks that are trending higher. 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 return on assets of 5% or greater
- A return on equity of 10% or greater
- Price performance of a 10% of greater return in the past 52 weeks in excess of the return for the S&P 500 index
- A dividend yield of 3% or greater
- Trending higher based on the Bollinger Bands price relative metric
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 screener was run on Jan. 1, 2013, as the market was closed. It produced five stocks. Of these stocks, one of them was SouFun Holdings Limited ADR (SFUN). Since I have already written about this stock recently, (please see my other articles on here to find those), I will not highlight it again here. Here are the four stocks.
The first stock produced by this screen was U.S. Ecology Inc. (ECOL). Over the past 52 weeks, the stock price of this company has risen by 25.35%. It has a market capitalization of $431.3 million, which makes it the smallest company of this screen by market cap. The company is in the waste management services industry. It currently pays an annual dividend of .72, giving it a current yield of 3.2%. For a small cap stock, this is a nice dividend yield. It has a trailing and a forward p/e ratio of 16.35.
U.S. Ecology provides waste management and transportation services to commercial and governmental clients. For its current 2012 dividend payments, upon looking at its cash flow statements, they have been covered by free cash flow (cash flows from operating activities less cash outflows for capital expenditures). The company only has $5.5 million in cash on its current balance sheet, but has about $110 million in property plant and equipment, and about $41 million in intangible assets. It has a current mean analyst price target of $25.33 per share, which would provide a 7.6% gain from its current share price of $23.54 if it can achieve that target. The company has beaten earnings estimates handily in each of the first three quarters of 2012. Here is a great article showing its third quarter earnings performance. In my opinion, the strength of the company's earnings has been the largest price catalyst which has enabled it to gain as much as it has over the past 52 weeks.
The next stock in this screen was Oiltanking Partners LP (OILT). The stock is up 35.6% over the past 52 weeks. This price performance over the last 52 weeks is the strongest of these four stocks highlighted here. It has a current market capitalization of $1.5 billion. The company is in the oil well services and equipment industry. It currently pays an annual distribution (since it is an LP, which brings a different tax situation to owners) of $1.50, giving it a current annual yield of 4.1%. It has a trailing p/e ratio of 25.43 and a forward p/e ratio of 23.37.
Oiltanking Partners LP provides various services to companies engaged in activities related to crude oil, gas, and petroleum. For 2012, its consensus estimate by analysts for earnings is $1.57. This is very much in line with its 2012 annual distribution amount of $1.50. Based on its current balance sheet, it has a debt to equity ratio of only 18.82%. It also currently has $6.1 million in cash. It has beaten earnings estimates in two of the three quarters reported so far in 2012. There has been recent insider buying in this company, which is usually a good sign as it is a vote of confidence in the company by its officers. As of August 30, 2012, Zacks ranked the company's stock as a 1 (strong buy). Its 52 week high currently is $41.13 and it is trading at $37.86 as of 1/1/2013, leaving it 8.64% from its high.
The third stock is Targa Resources Corp (TRGP). Its stock price is up 29.86% over the past 52 weeks. It has a current market capitalization of $2.2 billion. Its current stock price of $52.84 as of 1/1/2013 is the highest of the four companies highlighted here. The company is in the natural gas utilities industry. It currently pays an annual distribution of $1.69, giving it a current yield of 3.3%. It has a trailing p/e ratio of 62.9 and a forward p/e ratio of 40.03.
Targa Resources Corp provides natural gas services. Its current 52 week high of $53.38 was reached during the 12/31/2012 trading day. On November 15, 2012, it priced 9,500,000 common units at $36 each for an offering. Since that time, the stock price has risen nicely. On December 17, 2012 for instance, the stock was up 2.5%. Per a Yahoo! Finance recent price chart, the stock price has risen from $46.17 on November 14th to its current price of $53.38. That represents a 15.62% price increase. Next year, earnings are forecasted by analysts to grow by 55.3% and over the next five years, that growth is forecasted to be 16.6%. This projected growth in earnings looks to be a strong catalyst for its recent price increase, since there has been an absence of any significant price moving news.
Finally, the stock screen produced the stock of Universal Health Realty Income Trust (UHT). Its stock price is up 29.77% over the past 52 weeks. Its current market capitalization is $642 million. It has a current stock price of $50.61 as of 1/1/2013. The company is in the real estate operations industry. It currently pays an annual dividend of $2.48 per share, giving it a current yield of 5%. This amount is paid quarterly at .62 per share, and this quarterly amount was recently raised. It has a trailing p/e ratio of 8.26.
Universal Health Realty Income Trust is a real estate investment trust. It also reached its current 52 week high of $50.78 during the trading day of 12/31/2012. It recently increased its quarterly dividend amount paid to shareholders. The company invests in health care facilities and has 53 investments in 15 states. On November 16, 2012, a Forbes article noted that the company was in oversold territory, when it was selling for about $44.74 per share. The stock price has risen significantly since then. This company was also highly ranked in a stock screen produced by a fellow Seeking Alpha author on November 7, 2012. It was the top rated stock produced by that screen's factors.
A one year price chart of the companies is as follows:
ECOL data by YCharts
This price chart shows the percentage change of the companies versus the S&P 500 over the past 52 weeks. As you can see, every one of these companies outperformed the index. This also does not even include dividends and distributions. An equal investment in the four companies 52 weeks ago would have returned an average 29.51%, versus 11.68% for the S&P 500. After factoring in dividends and distributions, this average annual return would have been well over 30%.
This stock screen is a great basis for further research. Thank you for reading this article. Please read my other articles and look for more in the future regarding screens for quality dividend stocks.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.