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, Portfolio123 (1,952 clicks)
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I have searched for highly profitable companies that pay very rich dividends and have raised their payouts for the last five years. Those stocks would have to show also good 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 6.0%.
  2. The payout ratio is less than 100%.
  3. The annual rate of dividend growth over the past five years is positive.
  4. Trailing P/E is less than 18.
  5. Forward P/E is less than 13.
  6. Average annual earnings growth estimates for the next five years is greater or equal 5%.

After running this screen on July 28, 2013, I discovered the following three stocks:

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Dynex Capital Inc. (NYSE:DX)

Dynex Capital, Inc., a mortgage real estate investment trust [REIT], invests in mortgage assets in the United States.

Dynex Capital has a very low trailing P/E of 7.16 and a very low forward P/E of 7.66. The price-to-book-value is very low at 0.92. The price to free cash flow for the trailing 12 months is very low at 5.0, and the average annual earnings growth estimates for the next five years is at 5%. The forward annual dividend yield is very high at 11.91%, and the payout ratio is at 85%.

Dynex Capital has recorded strong growth on all key parameters during the last year, the last three years and the last five years, as shown in the table below.

Source: Portfolio123

DX will report its latest quarterly financial results on July 31. The reported results will probably affect the stock price in the short term.The compelling valuation metrics, the very rich dividend, and the fact that the company consistently has raised dividend payments are all factors that make DX stock quite attractive.

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Chart: finviz.com

Global Partners LP (NYSE:GLP)

Global Partners LP distributes gasoline, distillates, residual oil, and renewable fuels to wholesalers, retailers, and commercial customers in the New England states and New York.

Global Partners has a trailing P/E of 17.27 and a very low forward P/E of 12.29. The price-to-sales ratio is very low at 0.05, and the PEG ratio is also very low at 0.81. The price to free cash flow for the trailing 12 months is very low at 2.35, and the average annual earnings growth estimates for the next five years is very high at 21.3%. The forward annual dividend yield is very high at 6.08%, and the payout ratio is at 96%.

Global Partners has recorded strong revenue growth during the last year, the last three years and the last five years, as shown in the table below.

Source: Portfolio123

GLP will report its latest quarterly financial results in August. GLP is expected to post a profit of $0.75 a share, a 14% rise from the company's actual earnings for the same quarter a year ago.

The compelling valuation metrics, the very rich dividend, and the very strong earnings growth prospects, are all factors that make GLP stock quite attractive.

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Chart: finviz.com

Triangle Capital Corporation (NYSE:TCAP)

Triangle Capital Corporation is a business development company specializing in private equity and mezzanine investments.

Triangle Capital has a very low trailing P/E of 12.18 and a very low forward P/E of 11.93. The average annual earnings growth estimates for the next five years is at 5%. The forward annual dividend yield is very high at 7.36%, and the payout ratio is at 87%.

The TCAP stock price is 3.07% above its 20-day simple moving average, 4.27% above its 50-day simple moving average and 10.99% above its 200-day simple moving average. That indicates a short-term, mid-term and long-term uptrend.

Triangle Capital has recorded strong revenue and dividend growth during the last year, the last three years and the last five years, as shown in the table below.

Source: Portfolio123

TCAP will report its latest quarterly financial results on August 07. TCAP is expected to post a profit of $0.57 a share, a 12% rise from the company's actual earnings for the same quarter a year ago.

All these factors - the very low multiples, the very rich dividend, the fact the company consistently has raised dividend payments, and the fact that the stock is in an uptrend -- make TCAP stock quite attractive.

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Chart: finviz.com

Source: 3 High-Yielding Stocks That Have Raised Payouts For The Last 5 Years