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I have searched for profitable companies that pay rich dividends, and that have raised their payouts at a very high rate for the last five years. Companies that regularly increase dividends are generally more stable. Increasing dividends is the assurance that dividend income retains its purchasing power over time.

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. The forward dividend yield is greater than 3.10%.
  2. The payout ratio is less or equal 60%.
  3. The annual rate of dividend growth over the past five years is greater than 12%.
  4. The forward annual dividend yield is greater than the five-year average dividend yield.
  5. Trailing P/E is less than 20.
  6. Forward P/E is less than 18.
  7. Average annual earnings growth estimates for the next five years is greater or equal 3%.

After running this screen on May 06, 2013, before the market open, I discovered the following four stocks:

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Janus Capital Group, Inc. (NYSE:JNS)

Janus Capital Group, Inc. is a publicly owned asset management holding company with approximately $167.7 billion in assets under management.

Janus Capital Group has a low debt (total debt to equity is only 0.38), and has a trailing P/E of 15.19 and a very low forward P/E of 11.75. The price to free cash flow for the trailing 12 months is very low at 11.24, and the average annual earnings growth estimates for the next five years is quite high at 10%. The forward annual dividend yield is quite high at 3.18%, and the payout ratio is only 31%. The annual rate of dividend growth over the past five years was extremely high at 47.62%.

On April 23, Janus Capital reported its first-quarter 2013 financial results, which was in-line on EPS and was in-line on revenues. The company reported first-quarter net income of $28.0 million, or $0.15 per diluted share, compared with fourth-quarter 2012 net income of $31.2 million, or $0.17 per diluted share, and net income of $22.6 million, or $0.12 per diluted share, in the first quarter 2012.

In the report, the company said:

As part of its capital and liquidity management, JCG repurchased 376,349 shares of its common stock at an average price of $9.44 per share and a total cost of $3.6 million during the first quarter 2013. Additionally, the Board of Directors approved a 17% increase in the company's regular quarterly dividend to $0.07 per share from $0.06 per share. On April 18, 2013, JCG's Board of Directors declared a regular quarterly cash dividend of $0.07 per share. The quarterly dividend will be paid on May 24, 2013, to stockholders of record at the close of business on May 10, 2013.

The compelling valuation metrics, the rich dividend and the fact that the company consistently has raised dividend payments are all factors that make JNS stock quite attractive.

JNS Dividend Chart

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Chart: finviz.com

Molex Incorporated (NASDAQ:MOLX)

Molex Incorporated, together with its subsidiaries, engages in the design, manufacture, and sale of electronic components worldwide.

Molex has a very low debt (total debt to equity is only 0.16), and has a trailing P/E of 19.68 and a forward P/E of 17.08. The current ratio is very high at 3.25, and the average annual earnings growth estimates for the next five years is quite high at 10.54%. The forward annual dividend yield is quite high at 3.36%, and the payout ratio is at 60%. The annual rate of dividend growth over the past five years was very high at 14.26%.

The MOLX stock price is 3.06% above its 20-day simple moving average, 1.76% above its 50-day simple moving average and 6.79% above its 200-day simple moving average. That indicates a short-term, mid-term and long-term uptrend.

On April 23, Molex reported its fiscal-third-quarter 2013 financial results, and announced dividend increase. Net revenue for the March 2013 quarter was $852.9 million, a decrease of 11.9% from the December 2012 quarter and an increase of 1.9% from the March 2012 quarter. Orders for the March 2013 quarter were $909.2 million, a decrease of 1.1% from the December 2012 quarter and an increase of 4.2% from the March 2012 quarter. Net income for the March 2013 quarter was $44.8 million or $0.25 per share, compared with $70.4 million, or $0.39 per share, for the December 2012 quarter and $64.9 million, or $0.36 per share, for the March 2012 quarter.

In the report, Martin P. Slark Chief Executive Officer said:

Revenue in the March quarter was weaker than expected, largely due to the sharp reduction in demand from one customer for certain new programs that were launched in the September quarter and ramped significantly in the December quarter. The remainder of the business experienced a normal seasonal decline in revenue. We were able to mitigate the impact of lower revenue by closely managing manufacturing and operating costs. Our backlog increased both sequentially and year over year and our order rate for the quarter was stable with sequential improvements in the automotive and industrial markets. The distribution channel was also stronger this quarter and we are optimistic that the remainder of calendar 2013 will provide more robust growth opportunities.

Despite the first quarter 2013 mixed results, the rich dividend, the fact that the company consistently has raised dividend payments, and the fact that the stock is in an uptrend -- make MOLX stock quite attractive.

MOLX Dividend Chart

MOLX Dividend data by YCharts

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Chart: finviz.com

IAMGOLD Corp. (NYSE:IAG)

IAMGOLD Corporation engages in the exploration, development, and operation of mining properties. Its products include gold, silver, niobium, and copper deposits.

IAMGOLD has a very low debt (total debt to equity is only 0.17) and it has an extremely low trailing P/E of 6.25 and a very low forward P/E of 7.72. The current ratio is very high at 3.76, and the average annual earnings growth estimates for the next five years is at 3%. The forward annual dividend yield is very high at 4.50%, and the payout ratio is only 28 %. The annual rate of dividend growth over the past five years was very high at 33.03%.

The IAG stock is trading 66.7% below its 52-week high, and has 85% upside potential based on the consensus mean target price of $10.28.

IAMGOLD will report its latest quarterly financial results on May 06. IAG is expected to post a profit of $0.14 a share, a 44% 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 very low multiples, the rich dividend, the fact that the company consistently has raised dividend payments, and the fact that the stock is trading way below book value (price-to-book value is only 0.56) -- make IAG stock quite attractive.

IAG Dividend Chart

IAG Dividend data by YCharts

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Chart: finviz.com

Rogers Communications Inc. (NYSE:RCI)

Rogers Communications Inc. operates as a communications and media company in Canada. The company's Wireless segment offers voice and high-speed data services, as well mobile devices and accessories.

Rogers Communications has a very low trailing P/E of 14.38 and a very low forward P/E of 13.40. The PEG ratio is at 1.53, and the average annual earnings growth estimates for the next five years is at 9.40%. The forward annual dividend yield is quite high at 3.52%, and the payout ratio is at 47%. The annual rate of dividend growth over the past five years was very high at 12.39%.

The low multiples, the rich dividend and the fact that the company consistently has raised dividend payments are all factors that make RCI stock quite attractive.

RCI Dividend Chart

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Chart: finviz.com

JNS Dividend data by YCharts

RCI Dividend data by YCharts

Source: 4 Good-Yielding Stocks That Have Raised Payouts By At Least 12% A Year For The Last 5 Years