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I have searched for profitable companies that pay rich dividends and that have a very low PEG ratio. Those stocks would have to show a very low debt and strong earnings growth prospects. 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 4.4%.
  2. The payout ratio is less than 80%.
  3. Trailing P/E is less than 13.
  4. The PEG ratio is less 1.0.
  5. Debt-to-equity is less than 0.50.
  6. Average annual earnings growth estimates for the next 5 years is greater or equal 13%.
  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 25, 2013, before the market open, I discovered the following four stocks:

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Hi-Crush Partners LP (NYSE:HCLP)

Hi-Crush Partners LP operates as a producer of monocrystalline sand. Monocrystalline sand is a mineral that is used as a proppant to enhance the recovery rates of hydrocarbons from oil and natural gas wells.

Hi-Crush Partners has no debt at all, and it has a very low trailing P/E of 6.94 and a very low forward P/E of 7.88. The average annual earnings growth estimates for the next 5 years is very high at 46.2%, and the PEG ratio is very low at 0.15. The forward annual dividend yield is very high at 9.61%, and the payout ratio is at 67%.

The HCLP stock price is 2.44% above its 20-day simple moving average, 6.20% above its 50-day simple moving average and 9.18% above its 200-day simple moving average. That indicates a short-term, mid-term and long-term uptrend.

HCLP will report its latest quarterly financial results on May 06. HCLP is expected to post a profit of $0.50 a share. The reported results will probably affect the stock price in the short term.

The compelling valuation metrics, the very rich dividend, the very strong earnings growth prospects, and the fact that the stock is in an uptrend are all factors that make HCLP stock quite attractive.

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Chart: finviz.com

KCAP Financial, Inc. (NASDAQ:KCAP)

Kohlberg Capital Corporation is a private equity and venture capital firm specializing in mid market, buyouts, and mezzanine investments.

Kohlberg Capital has a low debt (total debt to equity is 0.49) and it has a very low trailing P/E of 12.64 and a very low forward P/E of 9.62. The PEG ratio is very low at 0.84, and the average annual earnings growth estimates for the next 5 years is quite high at 15%. The forward annual dividend yield is very high at 10.68%, and the payout ratio is at 79%.

The KCAP stock price is 2.34% above its 20-day simple moving average, 2.83% above its 50-day simple moving average and 19.53% above its 200-day simple moving average. That indicates a short-term, mid-term and long-term uptrend.

On March 15, KCAP Financial announced its 2012 financial results and announced a first-quarter 2013 dividend.

Financial Highlights

• Net investment income for the year ended December 31, 2012 was approximately $24.1 million, or $0.93 per share (basic) and $0.89 per share (diluted).

• During the year, KCAP Financial declared total quarterly dividends of $0.94 per share.

• At December 31, 2012, the fair value of KCAP Financial's investments totaled approximately $312.0 million.

• Net asset value per share of $7.85 as of December 31, 2012.

In the report, Dayl Pearson, President and Chief Executive Officer of KCAP Financial, noted:

This past year was transformative for us as our acquisition of Trimaran Advisors had a significant positive impact on our profitability. More importantly, the acquisition was critical to our ability to raise a new CLO fund in the fourth quarter of 2012 which restarted the growth of our asset management business.

The cheap valuation metrics, the very rich dividend, and the strong earnings growth prospects, and the fact that the stock is in an uptrend are all factors that make KCAP stock quite attractive.

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Chart: finviz.com

Safety Insurance Group Inc. (NASDAQ:SAFT)

Safety Insurance Group, Inc. provides private passenger automobile insurance products primarily in Massachusetts, and New Hampshire.

Safety Insurance Group has no debt at all, and it has a very low trailing P/E of 12.84 and a forward P/E of 15.02.The PEG ratio is very low at 0.86. The price to free cash flow for the trailing 12 months is very low at 11.25, and he average annual earnings growth estimates for the next 5 years is quite high at 15%. The forward annual dividend yield is quite high at 4.92%, and the payout ratio is at 63%.

The SAFT stock price is 0.31% above its 20-day simple moving average, 1.39% above its 50-day simple moving average and 7.80% above its 200-day simple moving average. That indicates a short-term, mid-term and long-term uptrend.

Safety Insurance Group will report its latest quarterly financial results on April 30. SAFT is expected to post a profit of $0.79 a share, a 28.8% 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 good earnings growth prospects, and the fact that the stock is in an uptrend are all factors that make SAFT stock quite attractive.

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Chart: finviz.com

Magic Software Enterprises Ltd. (NASDAQ:MGIC)

Magic Software Enterprises Ltd. develops, markets, and supports software development and deployment technology and applications.

Magic Software has no debt at all, and it has a very low trailing P/E of 12.32. The average annual earnings growth estimates for the next 5 years is quite high at 13%, and the PEG ratio is very low at 0.95. The forward annual dividend yield is quite high at 4.43%, and the payout ratio is at 55%.

The MGIC stock price is 4.29% above its 20-day simple moving average, 7.59% above its 50-day simple moving average and 18.24% above its 200-day simple moving average. That indicates a short-term, mid-term and long-term uptrend.

Magic Software will report its latest quarterly financial results on May 07. MGIC is expected to post a profit of $0.12 a share, the same as 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, and the fact that the stock is in an uptrend are all factors that make MGIC stock quite attractive.

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Chart: finviz.com

Source: 4 Solid-Yielding Dividend Stocks With A Very Low PEG Ratio That Are In Uptrend