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Arie Goren, Portfolio123 (505 clicks)
Long only, value, research analyst, dividend investing
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I have searched for profitable stocks that pay rich dividends with a low payout ratio that have shown a strong record of past revenue and earnings growth. Those stocks would also have to show a low debt.

I used the Portfolio123's powerful screener to perform the search. The screen's formula requires all stocks to comply with all following demands:

  1. The stock does not trade over-the-counter (OTC).
  2. Price is greater than 1.00.
  3. Market cap is greater than $100 million.
  4. Dividend yield is greater than 2%.
  5. The payout ratio is less than 100%.
  6. Total debt to equity is less than 1.00.
  7. Average annual earnings growth for the past five years is greater than 25%.
  8. Average annual sales growth for the past five years is greater than 10%.

After running this screen on December 15, 2013, only six stocks came out, as shown in the table below. In my opinion, these stocks can reward an investor a significant capital gain along with a nice income. I recommend readers to use this list of stocks as a basis for further research. All the data for this article were taken from Yahoo Finance, Portfolio123 and finviz.com.


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Main Street Capital (MAIN)

Main Street Capital is a business development company specializing in equity, equity related, and debt investments in small and lower middle market companies.

Main Street Capital has a very low trailing P/E of 10.04 and a low forward P/E of 14.04. The PEG ratio is at 1.43, and the average annual earnings growth estimates for the next five years is at 7.0%. The forward annual dividend yield is very high at 6.18%, and the payout ratio is at 56.9%.

The MAIN stock price is 0.62% above its 20-day simple moving average, 4.07% above its 50-day simple moving average and 8.58% above its 200-day simple moving average. That indicates a short-term, a mid-term and a long-term uptrend.

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

The tables below emphasize the Main Street Capital's superior margins and return on capital parameters over the industry median, the sector median and the S&P 500 median.


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Source: Portfolio123

On November 07, Main Street Capital reported its third-quarter financial results, which beat EPS expectations by $0.03.

Third-Quarter 2013 Highlights

  • Total investment income of $29.7 million, representing a 29% increase from the third quarter of 2012
  • Distributable net investment income of $19.6 million (or $0.53 per share), representing a 21% increase from the third quarter of 2012
  • Net investment income of $18.8 million (or $0.51 per share), after excluding $1.3 million of non-recurring, non-cash share-based compensation expense associated with the acceleration of the restricted shares of a retiring employee, representing a 21% increase from the third quarter of 2012
  • Net Asset Value of $20.01 per share at September 30, 2013, which represents an increase of $1.42 per share, or 8%, compared to $18.59 per share at December 31, 2012
  • Paid regular monthly dividends of $0.465 per share, or $0.155 per share for each of July, August and September 2013, representing a 7% increase compared to the third quarter of 2012 regular monthly dividends
  • Declared an increase to the regular monthly dividends to $0.48 per share, or $0.16 per share for each of October, November and December 2013, representing a 7% increase compared to the fourth quarter of 2012 regular monthly dividends
  • Paid a semi-annual supplemental cash dividend of $0.20 per share in July 2013

Main Street Capital has recorded strong revenue, EPS and dividend growth, and considering its compelling valuation metrics, its good earnings growth prospects, and the fact that the stock is in an uptrend, MAIN stock can move higher. Furthermore, the very rich dividend represents a gratifying income.

MAIN Dividend Chart


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Chart: finviz.com

HCI Group, Inc. (HCI)

HCI Group, Inc., an insurance holding company, provides property and casualty insurance in Florida.

HCI Group has a very low debt (total debt to equity is only 0.24), and it has a very low trailing P/E of 8.47 and a very low forward P/E of 10.33. The price-to-cash ratio is extremely low at 1.82, and the price to free cash flow for the trailing 12 months is also very low at 4.93. The forward annual dividend yield is at 2.36%, and the payout ratio is only 13.40%.

The HCI stock price is 4.65% above its 50-day simple moving average and 35.08% above its 200-day simple moving average. That indicates a mid-term and a long-term uptrend.

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

The tables below emphasize the HCI Group's superior growth rates, margins and return on capital parameters over the industry median, the sector median and the S&P 500 median.


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Most of HCI Group's stock valuation parameters have been better than its industry median, sector median and the S&P 500 median, as shown in the table below.


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Source: Portfolio123

On November 05, HCI Group reported its third-quarter financial results, which beat EPS expectations by $0.35. The company reported that income available to common stockholders in the third quarter of 2013 totaled $13.4 million or $1.13 diluted earnings per common share, compared with $2.8 million or $0.27 diluted earnings per common share in the third quarter of 2012.

HCI has recorded very strong revenue and EPS growth, and considering its compelling valuation metrics, and the fact that the stock is in an uptrend, HCI stock can move higher. Furthermore, the rich growing dividend represents a nice income.

Main risk to HCI stock is big losses in the event of severe hurricane storms.

HCI Dividend Chart


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Chart: finviz.com

Hallador Energy Company (HNRG)

Hallador Energy Company, through its subsidiary, Sunrise Coal, LLC, engages in the production and sale of steam coal to the electric power generation industry in the United States.


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Hallador Energy has a very low debt (total debt to equity is only 0.06), and it has a very low trailing P/E of 9.44 and a very low forward P/E of 9.30. The price to book value is at 1.22, and the current ratio is very high at 3.40. The forward annual dividend yield is at 2.09%, and the payout ratio is only 29%.

The HNRG stock price is 1.97% above its 20-day simple moving average, 4.70% above its 50-day simple moving average and 3.69% above its 200-day simple moving average. That indicates a short-term, a mid-term and a long-term uptrend.

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

Hallador Energy has recorded very strong revenue and EPS growth, during the last five years, as shown in the table below.

On November 01, Hallador Energy reported its third-quarter financial results. EPS came in at $0.17, a $0.12 below analyst expectations.

Hallador Energy has recorded very strong revenue and EPS growth, and considering its compelling valuation metrics, and the fact that the stock is in an uptrend, Hallador Energy stock can move higher. Furthermore, the rich dividend represents a nice income.

Risks to the expected capital gain and to the dividend payment include a downturn in the U.S. economy, and lower demand for coal due to low price of natural gas.

HNRG Dividend Chart


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Chart: finviz.com

Questcor Pharmaceuticals, Inc. (QCOR)

Questcor Pharmaceuticals, Inc., a biopharmaceutical company, provides drugs for the treatment of multiple sclerosis, nephrotic syndrome, and infantile spasms indications.

Questcor Pharmaceuticals has a very low debt (total debt to equity is only 0.04), and it has a low trailing P/E of 12.37 and a very low forward P/E of 7.86. The PEG ratio is very low at 0.48, and the average annual earnings growth estimates for the next five years is very high at 26%. The price to free cash flow for the trailing 12 months is very low at 12.07. The forward annual dividend yield is at 2.25%, and the payout ratio is only 15.5%.

Analysts recommend the stock. Among the ten analysts covering the stock, six rate it as a strong buy, three rate it as a buy, and only one rates it as a hold.

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

The tables below emphasize the Questcor Pharmaceuticals' superior growth rates, margins and return on capital parameters over the industry median, the sector median and the S&P 500 median.


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On October 29, Questcor Pharmaceuticals reported its third-quarter financial results, which beat EPS expectations by $0.32 and beat on revenues. Net sales for the third quarter ended September 30, 2013 were $236.3 million, up 68 percent from $140.3 million in the third quarter of 2012. The increase was driven by the expanded usage of H.P. Acthar® Gel (repository corticotropin injection) in multiple therapeutic areas. GAAP earnings for the third quarter of 2013 were $1.52 per diluted common share, up 67 percent from $0.91 per diluted common share in the third quarter of 2012.

Questcor Pharmaceuticals has recorded very strong revenue and EPS growth, and it has very strong earnings growth prospects, and considering its compelling valuation metrics, QCOR stock can move higher. Furthermore, the solid dividend represents a nice income.

QCOR Dividend Chart


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Chart: finviz.com

Apple Inc. (AAPL)

Apple has a very low debt (total debt to equity is only 0.14), and it has a low trailing P/E of 13.99 and a very low forward P/E of 11.66. The PEG ratio is very low at 0.98, and the average annual earnings growth estimates for the next five years is very high at 14.73%. The price to free cash flow for the trailing 12 months is very low at 14.73. The forward annual dividend yield is at 2.20%, and the payout ratio is only 28.6%.

The AAPL stock price is 2.00% above its 20-day simple moving average, 6.14% above its 50-day simple moving average and 20.04% above its 200-day simple moving average. That indicates a short-term, a mid-term and a long-term uptrend.

Most analysts recommend the stock. Among the 54 analysts covering the stock, eighteen rate it as a strong buy, twenty one rate it as a buy, twelve rate it as a hold, two rate it as underperform and only one rates it as a sell.

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

Most of Apple'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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On October 28, Apple reported its fourth-quarter fiscal 2013 financial results. EPS came in at $8.26, a $0.30 better than analyst expectations.

The company generated $9.9 billion in cash flow from operations and returned an additional $7.8 billion in cash to shareholders through dividends and share repurchases during the September quarter, bringing cumulative payments under its capital return program to $36 billion.

In the report, Apple provided the following guidance for its fiscal 2014 first quarter:

  • revenue between $55 billion and $58 billion
  • gross margin between 36.5 percent and 37.5 percent
  • operating expenses between $4.4 billion and $4.5 billion
  • other income/(expense) of $200 million
  • tax rate of 26.25 percent

Apple has recorded very strong revenue and EPS growth, and it has strong earnings growth prospects, and considering its compelling valuation metrics, its stock buyback program, and the fact that the stock is in an uptrend, AAPL stock can move higher. Furthermore, the solid dividend represents a nice income.

AAPL Dividend Chart


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Chart: finviz.com

RPC Inc. (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 0.05), and it has a trailing P/E of 20.72 and a forward P/E of 16.71. The PEG ratio is at 1.38, and the average annual earnings growth estimates for the next five years is quite high at 15%. The current ratio is very high at 3.50. The forward annual dividend yield is at 2.27%, and the payout ratio is at 58.1%. The annual rate of dividend growth over the past five years was very high at 29.86%.

The RES stock price is 1.17% above its 50-day simple moving average and 17.13% above its 200-day simple moving average. That indicates a mid-term and a long-term uptrend.

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

The tables below emphasize the RPC's superior margins and return on capital parameters over the industry median, the sector median and the S&P 500 median.


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On October 23, RPC, Inc. reported its third-quarter results, which beat EPS expectations by $0.03 and beat on revenues. For the quarter ended September 30, 2013, revenues increased 4.0 percent to $491.1 million compared to $472.4 million in the third quarter of last year. Operating profit for the third quarter decreased to $85.8 million compared to operating profit of $102.4 million in the same period the prior year, principally because of lower pricing for our services. Net income was $53.8 million or $0.25 diluted earnings per share, compared to $66.0 million or $0.30 diluted earnings per share in the same period last year. Earnings before interest, taxes, depreciation and amortization (EBITDA) decreased by 10.9 percent to $140.3 million compared to $157.6 million in the prior year.

RPC Inc. has recorded strong revenue, EPS and dividend growth, and its earnings growth prospects are very good. Considering RPC's good valuation, RES stock can move higher. Furthermore, the rich dividend represents a nice income.

Since the company is profitable and has a low debt and its payout ratio is low, there is a hardly risk that the company will reduce its dividend payment. Risks to the expected capital gain include a downturn in the U.S. economy, and decline in the price of oil.

RES Dividend Chart
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Chart: finviz.com

Source: 6 Good-Yielding Stocks With Strong Growth Records