4 Good-Yielding Energy Stocks That Have Raised Payouts By At Least 9% A Year For The Last 5 Years

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 |  Includes: AHGP, ARLP, HP, RES
by: Arie Goren

I have searched for profitable companies that pay rich dividends and have raised their payouts at a 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 also looked for companies that are in short-term, mid-term and long-term uptrend. Stocks in an uptrend are performing well and are likely to see positive momentum carry them higher.

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 2.6%.
  2. The payout ratio is less than 90%.
  3. The annual rate of dividend growth over the past five years is greater than 9%.
  4. Trailing P/E is less than 18.
  5. Forward P/E is less than 17.
  6. Average annual earnings growth estimates for the next five years is greater than 4%.
  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 August 05, 2013, before the market open, I discovered the following four stocks:

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Alliance Holdings GP, L.P. (NASDAQ:AHGP)

Alliance Holdings GP, L.P., through its subsidiaries, produces and markets coal primarily to utilities and industrial users in the United States.

Alliance Holdings has a trailing P/E of 17.83 and a forward P/E of 16.22. The PEG ratio is at 1.27, and the average annual earnings growth estimates for the next five years is quite high at 14%. The forward annual dividend yield is very high at 4.95%, and the payout ratio is at 88%. The annual rate of dividend growth over the past five years was very high at 21.46%.

The AHGP stock price is 1.81% above its 20-day simple moving average, 1.91% above its 50-day simple moving average and 19.88% above its 200-day simple moving average. That indicates a short-term, mid-term and long-term uptrend.

On July 26, Alliance Holdings reported its latest quarterly financial results, and announced that it increases its quarterly distribution by 3.0% to $0.785 per unit. AHGP also reported record net income for the 2013 Quarter of $61.0 million, or $1.02 per basic and diluted limited partner unit, an increase of 12.2% compared to net income for the 2012 Quarter of $54.4 million, or $0.91 per basic and diluted limited partner unit.

The very rich dividend, the fact that the company consistently has raised dividend payments, and the fact that the stock is in an uptrend are all factors that make AHGP stock quite attractive.

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Chart: finviz.com

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 11.17 and a very low forward P/E of 10.51. The PEG ratio is very low at 0.76, and the average annual earnings growth estimates for the next five years is quite high at 14.78%. The forward annual dividend yield is very high at 6.16%, and the payout ratio is at 69%. The annual rate of dividend growth over the past five years was very high at 13.60%.

The ARLP stock price is 1.06% above its 20-day simple moving average, 3.01% above its 50-day simple moving average and 16.36% above its 200-day simple moving average. That indicates a short-term, mid-term and long-term uptrend.

On July 26, Alliance Resource reported its latest quarterly financial results, and announced that it increases its quarterly unit holder distribution by 2.0% to $1.1525 per unit; and Increases its 2013 guidance. Alliance Resource reported strong financial and operating results, posting new records for coal sales and production volumes, revenues and EBITDA for the quarter ended June 30, 2013. Led by higher coal sales volumes in the 2013 Quarter, revenues climbed to $553.6 million, an increase of 4.5% compared to the quarter ended June 30, 2012. Record revenues and coal sales volumes contributed to record EBITDA of $178.4 million for the 2013 Quarter, an increase of 14.7% compared to the 2012 Quarter. Net income was also higher in the 2013 Quarter, increasing 9.0% to $104.1 million, or $1.96 per basic and diluted unit.

The compelling valuation metrics, the very rich dividend, the fact that the company consistently has raised dividend payments, and the fact that the stock is in an uptrend are all factors that make ARLP stock quite attractive.

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Chart: finviz.com

Helmerich & Payne, Inc. (NYSE:HP)

Helmerich & Payne, Inc. engages in the contract drilling of oil and gas wells.

Helmerich & Payne has a very low debt (total debt to equity is only 0.05), and it has a very low trailing P/E of 9.95 and a very low forward P/E of 11.90. The forward annual dividend yield is quite high at 3.05%, and the payout ratio is only 30%. The annual rate of dividend growth over the past three years was high at 11.87%, and over the past five years was also high at 9.24%.

The HP stock price is 0.45% above its 20-day simple moving average, 2.79% above its 50-day simple moving average and 10.26% above its 200-day simple moving average. That indicates a short-term, mid-term and long-term uptrend.

On July 26, Helmerich & Payne reported its fiscal third-quarter 2013 results, which beat EPS expectations by $0.10 and was in-line on revenues. In the report, Chairman and CEO Hans Helmerich commented:

In light of the challenging rig market, we are pleased with the strong quarterly results corresponding to our drilling operations. Also during the most recent quarter, the Board approved a significant increase in dividends paid to shareholders. After doubling the dividend at the end of last year, in June the dividend was increased again from $0.15 to $0.50 per share per quarter. We are confident that our strong capital structure allows us to pursue growth opportunities and, at the same time, return meaningful cash to shareholders.

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

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Chart: finviz.com

RPC Inc. (NYSE:RES)

RPC, Inc. provides oilfield services and equipment for oil and gas companies engaged in the exploration, production, and development of oil and gas properties in the United States, Canada, Eastern Europe, Latin America, Africa, the Middle East, China, New Zealand.

RPC Inc. has a very low debt (total debt to equity is only 0.07), and it has a trailing P/E of 16.46 and a low forward P/E of 14.88. The PEG ratio is quite low at 1.10, and the average annual earnings growth estimates for the next five years is quite high at 15%. The forward annual dividend yield is at 2.67%, and the payout ratio is only 44%. The annual rate of dividend growth over the past five years was very high at 29.20%.

The RES stock price is 3.29% above its 20-day simple moving average, 7.78% above its 50-day simple moving average and 10.25% above its 200-day simple moving average. That indicates a short-term, mid-term and long-term uptrend.

On July 24, RPC, Inc. reported its second-quarter results, which was in-line on EPS and beat on revenues. In the report, Richard A. Hubbell, RPC's President and Chief Executive Officer said:

During the second quarter of 2013, RPC continued to be impacted by pricing weakness in all of our service lines. Recent industry activity levels coupled with the large domestic fleet of available service equipment continue to create challenges. The average U.S. domestic rig count during the second quarter was 1,761, a 10.6 percent decrease compared to the same period in 2012, and an increase of less than one percent compared to the first quarter of 2013. The average price of natural gas was $3.97 per Mcf, a 73.4 percent increase compared to the prior year, and a 13.4 percent increase compared to the first quarter of 2013. The average price of oil during the quarter was $94.07 per barrel, a 1.2 percent increase compared to the prior year and a decrease of less than one percent compared to the first quarter of 2013. The unconventional rig count, an important indicator of the demand for RPC's services, decreased by 6.8 percent compared to the prior year, and during the second quarter of 2013 represented 74.1 percent of U.S. domestic drilling activity. Our revenues decreased by less than the decline in the total domestic rig count compared to the prior year due to RPC having benefited from greater service-intensive completion activities and a larger fleet of equipment in our pressure pumping service line.

The solid dividend, the strong earnings growth prospects, the fact the company consistently has raised dividend payments, and the fact that the stock is in an uptrend are all factors that make RES 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.