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A combination of strong growth record and strong earnings growth prospects together with a high yield seems to me a promising formula for a dividend investor.

I introduced in the finviz.com Screener the following demands:

Dividend Yield - Over 4%

Payout Ratio - Under 100%

Sales growth Past 5 years - Over 10%

EPS growth Past 5 years - Over 10%

EPS growth next 5 years - Over 10%

Trailing P/E - Under 25

Forward P/E - Under 20

As a result, only six stocks came out. In my opinion, these stocks can reward an investor a nice capital gain along a very rich dividend. I recommend readers use these stocks as a basis for further research. All the data for this article were taken from Portfolio123, finviz.com and Yahoo Finance, on December 08, 2013.

SeaDrill Limited (NYSE:SDRL)

Seadrill Limited provides offshore drilling services to the oil and gas industry worldwide. The company operates in three segments: Floaters, Jack-up Rigs, and Tender Rigs.

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Source: Seadrill Limited Q3 Presentation

Seadrill has a very low trailing P/E of 8.82 and a very low forward P/E of 11.52. The PEG ratio is extremely low at 0.36, and the average annual earnings growth estimates for the next five years is very high at 24.34%. The forward annual dividend yield is very high at 8.71%, and the payout ratio is at 71.2%.

SeaDrill has recorded strong revenue, EPS and dividend growth, during the last year, the last three years and the last five years, as shown in the charts below.

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Source: Seadrill Limited Q3 Presentation

Most Seadrill's growth rates, margins, return on capital and stock valuation parameters have been better than its industry median, sector median and the S&P 500 median, as shown in the tables below.

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Source: Portfolio123

On November 25, SeaDrill Limited reported its third-quarter financial results, which missed EPS expectations by $0.03 and beat on revenues.

Third-Quarter 2013 Highlights

  • Seadrill reports third quarter 2013 EBITDA of US$663 million
  • Seadrill reports third quarter 2013 net income of US$315 million and earnings per share of $0.61
  • Seadrill increases the ordinary quarterly cash dividend by 4 cents to 95 cents per share
  • Economic utilization for floaters was 94% in Q3 2013 in-line with 94% in Q2 2013
  • Economic utilization for the jack-up fleet in Q3 2013 was 97%, down from 98% in Q2 2013
  • Seadrill ordered four ultra-deepwater drillships for an estimated project price below US$600 million per rig, with deliveries scheduled for the second half of 2015
  • Seadrill ordered two jack-ups for an estimated project price of US$230 million per rig, with deliveries in the second and third quarters of 2016, respectively
  • Seadrill reached 50.1% ownership in Sevan Drilling and launched a mandatory offer for all outstanding shares which closed on August 22, 2013
  • Seadrill secured a 180-day contract for the newbuild ultra-deepwater drillship West Tellus with a total estimated revenue potential of US$150 million
  • Seadrill secured a 2.5-year contract for the jack-up rig West Freedom with a total estimated revenue potential of US$222 million
  • Seadrill secured a one-year contract extension with Talisman in Malaysia for the jack-up rig West Vigilant with a total estimated revenue potential of US$61 million
  • North Atlantic Drilling awarded an extension of the current drilling contract, in addition to a new drilling contract for West Navigator, securing employment to December 2014 with a total estimated revenue potential of US$98 million
  • Seadrill completes placement of US$500 million unsecured senior notes maturing in 2020

SeaDrill has recorded strong revenue, EPS and dividend growth, and considering its cheap valuation metrics and its strong earnings growth prospects, SDRL stock can move higher. Furthermore, the very rich dividend represents a gratifying income.

Risks to the expected capital gain and to the very rich dividend payment include; a downturn in the U.S. economy, and a decline in the price of oil and natural gas.

SDRL Dividend Chart

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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.

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Source: Wells Fargo Conference Presentation

Alliance Resource has a very low trailing P/E of 10.38 and a very low forward P/E of 10.30. The PEG ratio is very low at 0.74, and the average annual earnings growth estimates for the next five years is quite high at 14.05%. The forward annual dividend yield is very high at 6.22%, and the payout ratio is at 50%. The annual rate of dividend growth over the past five years was high at 12.53%.

The ARLP stock price is 2.30% above its 20-day simple moving average, 1.53% above its 50-day simple moving average and 7.62% above its 200-day simple moving average. That indicates a short-term, mid-term and long-term uptrend.

Alliance Resource has recorded strong cash flow, revenue, EPS and dividend growth, during the last year, the last three years and the last five years, as shown in the charts below.

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Source: Wells Fargo Conference Presentation

Most Alliance Resource's growth rates, efficiency and return on capital parameters have been better than its industry median, sector median and the S&P 500 median, as shown in the tables below.

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On October 28, Alliance Resource reported its latest quarter financial results. The company reported that led by higher coal sales volumes in the 2013 Quarter, revenues climbed to $537.2 million, an increase of 5.0% compared to the quarter ended September 30, 2012. Increased revenues and coal sales volumes contributed to higher net income, which jumped 44.1% to $87.2 million, or $1.50 per basic and diluted limited partner unit, and EBITDA, which rose 24.3% to $158.5 million.

Alliance Resource has recorded strong cash flow, revenue, EPS and dividend growth, and considering its cheap valuation metrics and its strong earnings growth prospects, ARLP stock can move higher. Furthermore, the very rich dividend represents a gratifying income.

Risks to the expected capital gain and to the very rich dividend payment include; a downturn in the U.S. economy, and a decline in the price of natural gas the alternative energy source.

ARLP Dividend Chart

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Chart: finviz.com

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.

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Alliance Holdings has a low trailing P/E of 14.52 and a very low forward P/E of 13.85. The PEG ratio is at 1.04, 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 5.84%, and the payout ratio is at 78.9%. The annual rate of dividend growth over the past three years was very high at 17.66% and over the past five years was also very high at 18.59%.

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

Most Alliance Holdings' growth rates, efficiency and return on capital parameters have been better than its industry median, sector median and the S&P 500 median, as shown in the tables below.

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The charts below, which were taken from the company presentation, show the importance of coal as a prime source of fuel for electricity generation.

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On October 28, Alliance Holdings reported its latest quarterly financial results, and announced that it increased its quarterly distribution by 12.2% to $0.8075 per unit. AHGP also reported net income for the 2013 Quarter of $54.2 million, or $0.91 per basic and diluted limited partner unit, an increase of 37.3% compared to net income for the 2012 Quarter of $39.5 million, or $0.66 per basic and diluted limited partner unit.

Alliance Holdings has recorded strong revenue, EPS and dividend growth, and considering its strong earnings growth prospects, AHGP stock still has room to go up. Furthermore, the very rich dividend represents a gratifying income.

Risks to the expected capital gain and to the dividend payment include; a downturn in the U.S. economy, competition from lower natural gas price, and the company's huge debt of $787 million.

AHGP Dividend Chart

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Chart: finviz.com

Seaspan Corporation (NYSE:SSW)

Seaspan Corporation owns and operates the containerships primarily in Hong Kong. The company charters its containerships pursuant to long-term, fixed-rate time charters to various container liner companies.

See my article from November 05, 2013.

SSW Dividend Chart

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Chart: finviz.com

Oritani Financial Corp. (NASDAQ:ORIT)

Oritani Financial Corp. operates as the bank holding company for Oritani Bank that provides retail and commercial banking services to individual and business customers in New Jersey.

Oritani Financial Corp. has a trailing P/E of 16.62 and a forward P/E of 16.74. The PEG ratio is at 1.38, and the average annual earnings growth estimates for the next five years is quite high at 12%. The forward annual dividend yield is high at 4.48%, and the payout ratio is at 70.3%. The annual rate of dividend growth over the past three years was very high at 34.95%.

Oritani Financial Corp. has recorded strong revenue, EPS and dividend growth, during the last year, the last three years and the last five years, as shown in the table below.

The charts below emphasize Oritani Financial Corp.'s strong asset growth, and the strong net interest margin.

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Source: 2013 Annual Meeting of Shareholders

On October 23, Oritani Financial reported its latest quarterly financial results. The company reported net income of $10.4 million, or $0.24 per basic and fully diluted share, for the three months ended September 30, 2013, as compared to net income of $9.2 million, or $0.22 per basic and fully diluted share, for the corresponding 2012 period.

Oritani Financial Corp. has recorded strong revenue, EPS and dividend growth, and considering its good valuation and its strong earnings growth prospects, ORIT stock can move higher. Furthermore, the very rich growing dividend represents a gratifying income.

Risks to the expected capital gain and to the dividend payment include; a downturn in the U.S. economy and a decline in the bank's interest margin of 3.67%.

ORIT Dividend Chart

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Chart: finviz.com

Lorillard, Inc. (NYSE:LO)

Lorillard, Inc. manufactures and sells cigarettes in the United States. The company operates through two segments, Cigarettes and Electronic Cigarettes.

Lorillard has a trailing P/E of 15.87 and a low forward P/E of 14.22. The PEG ratio is at 1.32. Lorillard records strong growth on all key parameters; the average annual sales growth for the past 5 years was high at 10.80%, the average annual earnings growth for the past 5 years was also high at 10.30%, and the average annual earnings growth estimates for the next 5 years is high at 12.00%. The forward annual dividend yield is high at 4.33%, and the payout ratio is at 53.2%. The annual rate of dividend growth over the past three years was high at 15.84% and over the past five years was very high at 29.14%.

The LO stock price is 3.83% above its 50-day simple moving average and 17.03% above its 200-day simple moving average. That indicates a mid-term and a long-term uptrend.

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

Most Lorillard's growth rates and margin parameters have been better than its industry median, sector median and the S&P 500 median, as shown in the tables below.

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On October 23, Lorillard reported its third-quarter financial results, which beat EPS expectations by $0.02.

Third-Quarter Highlights

  • Net sales increased 10.0% over last year to $1.827 billion.
  • Reported (GAAP) diluted earnings per share decreased 4.2% versus last year to $0.69.
  • Adjusted (Non-GAAP) operating income increased 12.5% over last year to $541 million.
  • Adjusted (Non-GAAP) diluted earnings per share increased 15.3% versus last year to $0.83.
  • Lorillard continued to gain retail market share of cigarettes increasing its total share 0.5 share points to 14.9% driven by Newport Menthol.
  • blu eCigs further established itself as the e-cigarette category leader achieving approximately a 49% share.
  • Lorillard repurchased 5.7 million shares during the quarter at a cost of $249 million.
  • Lorillard acquired SKYCIG, a British-based e-cigarette business, on October 1, 2013.

During the third quarter of 2013, the Company repurchased approximately 5.7 million shares at a cost of $249 million under the amended $1 billion share repurchase program announced in March 2013 and amended in May 2013. As of September 30, 2013, the maximum dollar value of shares that could yet be purchased under the $1 billion share repurchase program was $542 million.

Since LO valuation metrics are very low, the company's growth prospects are good, and the company is authorized to repurchase an additional $542 million of its outstanding common stock, a capital gain can be expected along with the very rich dividend.

Risks to the expected capital gain and to the high dividend payment include; a menthol ban, acceleration of industry volume declines and a worsening of the litigation environment.

LO Dividend Chart

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Chart: finviz.com

Source: 6 High-Yielding Stocks With Strong Growth Records And Strong Growth Prospects