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I have searched for profitable companies that pay rich dividends, that have raised their payouts significantly each year and that their forward dividend yield is greater than the five-year average dividend yield. A good time to start a long-term investment in a blue-chip company, which has a long history of steadily increasing dividend payment, is when due to temporary weakness its dividend yield is historically high.

I also looked for companies that are in short-term uptrend, in mid-term uptrend and in long-term uptrend. Stocks in an uptrend are performing well and are in a buying mode.

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. All the data for this article were taken from Yahoo Finance and finviz.com.

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

  1. Dividend yield is greater than 3.1%.
  2. The forward dividend yield is greater than the five-year average dividend yield.
  3. The annual rate of dividend growth over the past five years is greater than 7%.
  4. The annual rate of dividend growth over the past 10 years is greater than 9%.
  5. Forward P/E is less than 15.
  6. Average annual earnings growth estimates for the next 5 years is greater or equal 2%.
  7. Stock price is above 20-day simple moving average (short-term uptrend).
  8. Stock price is above 50-day simple moving average (mid-term uptrend).
  9. Stock price is above 200-day simple moving average (long-term uptrend).

After running this screen on April 12, 2013, before the market open, I discovered the following four stocks:

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AVA Dividend Chart

AVA Dividend data by YCharts

AVA Dividend Yield Chart

AVA Dividend Yield data by YCharts

Avista Corp. (NYSE:AVA)

Avista Corporation, an energy company, engages in the generation, transmission, and distribution of energy; and other energy-related businesses primarily in the United States and Canada.

Avista Corporation has a trailing P/E of 20.64 and a low forward P/E of 14.65. The average annual earnings growth estimates for the next 5 years is at 4%, and the price-to sales ratio is quite low at 1.05 . The forward annual dividend yield is quite high at 4.48%, and the five-year average dividend yield was at 4.20%. The payout ratio is at 88%. The annual rate of dividend growth over the past five years was very high at 13.11%, and over the past ten years was quite high at 9.77%.

The AVA stock price is 1.22% above its 20-day simple moving average, 3.46% above its 50-day simple moving average and 8.13% above its 200-day simple moving average. That indicates a short-term, mid-term and long-term uptrend.

AVA will report its latest quarterly financial results on April 30. AVA is expected to post a profit of $0.71 a share, a 10% 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.

The rich dividend, the fact that the company consistently has raised dividend payments and that the future yield is greater than the five-year average yield, and the fact that the stock is in an uptrend are all factors that make AVA stock quite attractive.

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Chart: finviz.com

ConocoPhillips (NYSE:COP)

ConocoPhillips explores for, produces, transports, and markets crude oil, bitumen, natural gas, liquefied natural gas, and natural gas liquids on a worldwide basis.

ConocoPhillips has a low debt (total debt to equity is only 0.45) and it has a very low trailing P/E of 8.95 and a very low forward P/E of 9.99. The average annual earnings growth estimates for the next 5 years is at 2.33%, and the price-to sales ratio is quite low at 1.19 . The forward annual dividend yield is quite high at 4.39%, and the five-year average dividend yield was at 4.00%. The payout ratio is only 39%. The annual rate of dividend growth over the past five years was quite high at 7.05%, and over the past ten years was very high at 12.69%.

The COP stock price is 0.62% above its 20-day simple moving average, 2.53% above its 50-day simple moving average and 6.41% above its 200-day simple moving average. That indicates a short-term, mid-term and long-term uptrend.

ConocoPhillips will report its latest quarterly financial results on April 24. COP is expected to post a profit of $1.40 a share, a 30.7% 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.

The cheap valuation metrics, the rich dividend, the fact that the company consistently has raised dividend payments and that the future yield is greater than the five-year average yield, and the fact that the stock is in an uptrend are all factors that make COP stock quite attractive.

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Chart: finviz.com

General Dynamics Corp. (NYSE:GD)

General Dynamics Corporation, an aerospace and defense company, provides business aviation; combat vehicles, weapons systems, and munitions; military and commercial shipbuilding; and communications and information technology products and services worldwide.

General Dynamics has a low debt (total debt to equity is only 0.34) and it has a very low forward P/E of 9.96. The average annual earnings growth estimates for the next 5 years is at 7.1%, and the price-to sales ratio is very low at 0.80. The forward annual dividend yield is at 3.14%, and the five-year average dividend yield was at 2.60%. The annual rate of dividend growth over the past five years was quite high at 9.85%, and over the past ten years was very high at 13.34%.

The GD stock price is 2.89% above its 20-day simple moving average, 4.89% above its 50-day simple moving average and 7.56% above its 200-day simple moving average. That indicates a short-term, mid-term and long-term uptrend.

General Dynamics will report its latest quarterly financial results on April 23. GD is expected to post a profit of $1.56 a share, a $0.01 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.

The compelling valuation metrics, the rich dividend, the fact that the company consistently has raised dividend payments and that the future yield is greater than the five-year average yield, and the fact that the stock is in an uptrend are all factors that make GD stock quite attractive.

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Chart: finviz.com

Lockheed Martin Corporation (NYSE:LMT)

Lockheed Martin Corporation, a security and aerospace company, engages in the research, design, development, manufacture, integration, and sustainment of advanced technology systems and products for defense, civil, and commercial applications in the United States and internationally.

Lockheed Martin has a very low trailing P/E of 11.64 and a very low forward P/E of 10.75. The average annual earnings growth estimates for the next 5 years is at 7.22%, and the price-to sales ratio is very low at 0.66 . The forward annual dividend yield is quite high at 4.73%, and the five-year average dividend yield was at 4.10%. The payout ratio is at 50%. The annual rate of dividend growth over the past five years was very high at 22.32%, and over the past ten years was also very high at 26.45%.

Lockheed Martin will report its latest quarterly financial results on April 23. LMT is expected to post a profit of $2.03 a share, a $0.01 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.

The cheap valuation metrics, the rich dividend, the fact that the company consistently has raised dividend payments and that the future yield is greater than the five-year average yield, and the fact that the stock is in an uptrend are all factors that make LMT stock quite attractive.

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Chart: finviz.com

Source: 4 Stocks That Have Raised Dividends Significantly Each Year That Are In Uptrend