4 Good-Yielding Stocks With Low P/E Ratio In An Uptrend

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 |  Includes: ARLP, AROW, GCI, WBCO
by: Arie Goren

I have searched for highly profitable companies that pay rich dividends and that have low trailing and forward P/E ratio. Those stocks would have to show also robust earnings growth prospects. 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 3.0%.
  2. The payout ratio is less than 70%.
  3. Trailing P/E is less than 14.
  4. Forward P/E is less than 15.
  5. Average annual earnings growth estimates for the next five years is greater than 6%.
  6. The stock price is above the 20-day simple moving average (short-term uptrend).
  7. The stock price is above the 50-day simple moving average (mid-term uptrend).
  8. The stock price is above the 200-day simple moving average (long-term uptrend).

After running this screen on July 04, 2013, I discovered the following four stocks:

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Alliance Resource Partners LP (NASDAQ:ARLP)

Alliance Resource Partners, L.P. engages in the production and marketing of coal primarily to utilities and industrial users in the United States.

Alliance Resource has a very low trailing P/E of 10.97 and a very low forward P/E of 11.19. The PEG ratio is very low at 0.84, and the average annual earnings growth estimates for the next five years is quite high at 13.0%. The forward annual dividend yield is very high at 6.30%, and the payout ratio is at 65%.

Analysts recommend the stock. Among the nine analysts covering the stock, three rate it as a strong buy, four rate it as a buy, and two rate it as a hold.

The ARLP stock price is 1.73% above its 20-day simple moving average, 0.03% above its 50-day simple moving average and 14.44% above its 200-day simple moving average. That indicates a short-term, mid-term and long-term uptrend.

ARLP will report its latest quarterly financial results on July 25. ARLP is expected to post a profit of $1.55 a share, a 15% 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 very rich dividend, the strong analyst recommendations, and the fact that the stock is in an uptrend are all factors that make HMN stock quite attractive.

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Chart: finviz.com

Arrow Financial Corporation (NASDAQ:AROW)

Arrow Financial Corporation operates as the holding company for Glens Falls National Bank and Trust Company, and Saratoga National Bank and Trust Company that provide various commercial and consumer banking, and financial products.

Arrow Financial has a very low debt (total debt to equity is only 0.11) and it has a low trailing P/E of 13.84 and a low forward P/E of 14.81. The price to free cash flow for the trailing 12 months is at 22.24, and the average annual earnings growth estimates for the next five years is at 6.90%. The forward annual dividend yield is quite high at 3.95%, and the payout ratio is at 54%.

The AROW stock price is 2.06% above its 20-day simple moving average, 3.38% above its 50-day simple moving average and 4.75% above its 200-day simple moving average. That indicates a short-term, mid-term and long-term uptrend.

AROW will report its latest quarterly financial results on July 15. AROW is expected to post a profit of $0.42 a share, a 8.7% decline from the company's actual earnings for the same quarter a year ago.

The very low multiples, the rich dividend, and the fact that the stock is in an uptrend are all factors that make AROW stock quite attractive.

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Chart: finviz.com

Gannett Co., Inc. (NYSE:GCI)

Gannett Co., Inc. operates as a media and marketing solutions company in the United States and internationally.

Gannett has a low trailing P/E of 13.01 and a very low forward P/E of 10.16. The price to free cash flow for the trailing 12 months is at 16.45, and the average annual earnings growth estimates for the next five years is at 8%. The forward annual dividend yield is at 3.14%, and the payout ratio is only 41%.

The GCI stock price is 9.23% above its 20-day simple moving average, 16.99% above its 50-day simple moving average and 30.95% above its 200-day simple moving average. That indicates a short-term, mid-term and long-term uptrend.

GCI will report its latest quarterly financial results on July 21. GCI is expected to post a profit of $0.58 a share, a 3.6% rise from the company's actual earnings for the same quarter a year ago.

All these factors -- the low multiples, the rich dividend, and the fact that the stock is in an uptrend -- make GCI stock quite attractive.

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Chart: finviz.com

Washington Banking Co. (NASDAQ:WBCO)

Washington Banking Company operates as the bank holding company for Whidbey Island Bank that provides commercial banking services.

Washington Banking has a very low debt (total debt to equity is only 0.14) and it has a low trailing P/E of 13.06 and a very low forward P/E of 12.63. The PEG ratio is at 1.63, and the price to book value is at 1.19. The price to free cash flow for the trailing 12 months is extremely low at 4.11, and the average annual earnings growth estimates for the next five years is at 8%. The forward annual dividend yield is quite high at 4.26%, and the payout ratio is at 49%.

The WBCO stock price is 2.03% above its 20-day simple moving average, 2.74% above its 50-day simple moving average and 4.03% above its 200-day simple moving average. That indicates a short-term, mid-term and long-term uptrend.

WBCO will report its latest quarterly financial results on July 24. WBCO is expected to post a profit of $0.28 a share, a 56% rise from the company's actual earnings for the same quarter a year ago.

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

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Chart: finviz.com

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.