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Arie Goren, Portfolio123 (474 clicks)
Long only, value, research analyst, dividend investing
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Most of the mid-cap companies that are included in the S&P MidCap 400 index pay dividends. As a matter of fact, 257 of these companies pay dividends. The chart below presents the current annual dividend yield distribution among the S&P MidCap companies.

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Data: Zacks

While there is no official breakdown, the division between the large, medium and small cap is approximately as follows:

Large-cap: $10 billion and greater

Mid-cap: $1 billion-$10 billion

Small-cap: $100 million-$1 billion

S&P MidCap 400

Description from Standard & Poor's:

The S&P MidCap 400® provides investors with a benchmark for mid-sized companies. The index covers over 7% of the U.S. equity market, and seeks to remain an accurate measure of mid-sized companies, reflecting the risk and return characteristics of the broader mid-cap universe on an on-going basis.

In my previous post, I tried to determine if the five stocks that have the highest dividend yield among the mid-cap stocks included in the S&P MidCap 400 index are a bargain now. In this article, I try to determine if the five S&P 400 second-best dividend yielders are currently a bargain.

In this article, I will give the corresponding fundamental parameters for these five companies and my own opinion about them. Nonetheless, these data and my opinion should only serve as a basis for further research. All the data for this article were taken from Yahoo Finance and finviz.com on January 17 before the market open.

The table and the chart below present the top five second-highest dividend yielders, their forward annual dividend rate, the forward yield, the payout ratio and the dividend rate of growth for the past five years.

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Mack-Cali Realty Corp. (CLI)

Mack-Cali Realty Corporation is a real estate investment trust (REIT). It engages in the leasing, management, acquisition, development, and construction of commercial real estate properties in the United States.

Mack-Cali Realty has a trailing P/E of 37.31 and a forward P/E of 25.97. The forward annual dividend yield is very high at 6.80%, and the annual rate of dividend growth over the past five years was negative at -6.8%. The payout ratio is very high at 253.5%.

CLI has a total cash per share of $0.25, and it is expected to post a profit of $2.65 a share in the current year and $2.54 in 2013, which should be enough to sustain dividend payments of $1.80.

The CLI stock is trading 2.30% above its 20-day simple moving average, 4.43% above its 50-day simple moving average and 0.84% above its 200-day simple moving average, which indicates short-term, mid-term and long-term uptrend.

Although most analysts rate the CLI stock as a hold, I think that due to the rich dividend and the fact that the stock is in an uptrend; the CLI stock is quite attractive.

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Data: Yahoo Finance

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Chart: finviz.com

Valley National Bancorp (VLY)

Valley National Bancorp operates as the bank holding company for the Valley National Bank that provides various commercial, retail, trust, and investment services.

Valley National Bancorp has a low trailing P/E of 14.60 and a low forward P/E of 13.99. The price to free cash flow for the trailing 12 months is at 19.07. The forward annual dividend yield is very high at 6.55%, and the annual rate of dividend growth over the past five years was negative at -0.2%. The payout ratio is at 95.6%.

VLY has a total cash per share of $3.24, and it is expected to post a profit of $0.74 a share in the current year and $0.71 in the next year, which should be enough to sustain dividend payments of $0.65.

VLY will report its latest quarterly financial results on January 30. VLY is expected to post a profit of $0.19 a share, a 35.7% rise from the company's actual earnings for the same quarter a year ago. The reported results will probably affect the stock price in the short term.

All these factors -- the cheap valuation and the rich dividend -- make VLY stock quite attractive.

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Data: Yahoo Finance

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Chart: finviz.com

Senior Housing Properties Trust (SNH)

Senior Housing Properties Trust, a real estate investment trust (REIT), primarily invests in senior housing properties in the United States.

Senior Housing Properties has a trailing P/E of 30.96 and a forward P/E of 24.71. The forward annual dividend yield is very high at 6.38%, and the annual rate of dividend growth over the past five years was at 2.2%. The payout ratio is quite high at 145.6%.

SNH has a total cash per share of $0.12, and it is expected to post a profit of $1.76 a share in the current year and $1.84 in 2013, which should be enough to sustain dividend payments of $1.56.

The SNH stock is trading 2.50% above its 20-day simple moving average, 6.19% above its 50-day simple moving average and 12.55% above its 200-day simple moving average, which indicates short-term, mid-term and long-term uptrend.

Most analysts rate the SNH stock as a hold, and I think this rating is the most appropriate.

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Data: Yahoo Finance

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Chart: finviz.com

Mercury General Corporation (MCY)

Mercury General Corporation, together with its subsidiaries, engages in writing personal automobile insurance products.

Mercury General has a very low debt (total debt to equity is only 0.07), and it has a very low trailing P/E of 10.07 and a forward P/E of 16.05. The PEG ratio is at 1.50, and the price to sales ratio is very low at 0.75. The forward annual dividend yield is very high at 6.25%, and the payout ratio is at 62.7%. The annual rate of dividend growth over the past five years was at 3.3%.

MCY has a total cash per share of $3.43, and it is expected to post a profit of $1.77 a share in the current year and $2.44 in the next year, which should be enough to sustain dividend payments of $2.45.

MCY will report its latest quarterly financial results on February 04. MCY is expected to post a profit of $0.25 a share, a 57.6% decline from the company's actual earnings for the same quarter a year ago. The reported results will probably affect the stock price in the short term.

All these factors -- the cheap valuation and the rich dividend -- make MCY stock quite attractive.

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Data: Yahoo Finance

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Chart: finviz.com

Old Republic International Corporation (ORI)

Old Republic International Corporation, through its subsidiaries, engages in underwriting insurance products in the United States and Canada.

Old Republic International has a very low debt (total debt to equity is only 0.16), and the forward P/E is at 22. The price to free cash flow for the trailing 12 months is at 17.02, and the price to sales ratio is very low at 0.59. The stock is trading way below its book value, the price to book value ratio is only 0.80.

The forward annual dividend yield is very high at 6.21%, and the annual rate of dividend growth over the past five years was at 2.0%. The payout ratio is very high at 2,366 %.

ORI has a total cash per share of $5.64, and it is expected to post a loss of $0.32 a share in the current year and a profit of $2.24 in 2013. The company can use its huge cash in order to sustain dividend payments of $0.71.

The ORI stock is trading 4.21% above its 20-day simple moving average, 8.53% above its 50-day simple moving average and 21.27% above its 200-day simple moving average, which indicates short-term, mid-term and long-term uptrend.

ORI will report its latest quarterly financial results on January 24. ORI is expected to post a loss of $0.07 a share. In the same quarter a year ago the company had a loss of $0.11. The reported results will probably affect the stock price in the short term.

All these factors -- the cheap valuation, the rich dividend and the fact that the stock is in an uptrend -- make ORI stock quite attractive.

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Data: Yahoo Finance

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Chart: finviz.com

Conclusion

These five mid-cap second-best dividend yielders are quite attractive, due mainly to the rich dividend, but I cannot say that they are bargain stocks now.

Source: 5 Mid-Cap Second-Best Dividend Yielders, Are They Bargain Stocks Now?