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Are you looking for candidates to boost your portfolio’s income? If so, you may find this article to be an interesting starting point for your own research.

With that in mind, we looked for all the companies with market caps above $300M and dividend yields above 2%. Consequently, we looked for each of these names’ payout ratios, operating cash flows and revenues. Ultimately, we kept those companies with the following three characteristics:

- TTM payout ratio < 3-year average payout ratio
- TTM Operating cash flow/revenue > 3-year average operating cash flow/revenue
- Expected dividend per share > most recent dividend per share




We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last year. To access a complete analysis of this list's recent performance, click here.


Considering this information, which of these stocks do you think is the safest source of income and potential capital gains?

1. Republic Bancorp Inc. (RBCAA): Regional Banks Industry. Market cap of $400.79M. Dividend yield at 3.22%. TTM payout ratio 12.94% vs. 3-year average payout ratio at 20.54%. TTM operating cash flow/revenue at 55.51% vs. 3-year average at 39.49%. Expected dividend per share $0.59 vs. most recent dividend per share at $0.56. The stock has lost 16.78% over the last year.

2. Northrop Grumman Corporation (NOC):
Conglomerates Industry. Market cap of $18.60B. Dividend yield at 3.15%. TTM payout ratio 26.74% vs. 3-year average payout ratio at 68.09%. TTM operating cash flow/revenue at 8.71% vs. 3-year average at 7.38%. Expected dividend per share $1.94 vs. most recent dividend per share at $1.84. The stock is a short squeeze candidate, with a short float at 8.95% (equivalent to 12.18 days of average volume). The stock has gained 20.92% over the last year.

3. Packaging Corp. of America (PKG): Packaging & Containers Industry. Market cap of $2.91B. Dividend yield at 2.8%. TTM payout ratio 29.81% vs. 3-year average payout ratio at 43.65%. TTM operating cash flow/revenue at 15.88% vs. 3-year average at 13.19%. Expected dividend per share $0.76 vs. most recent dividend per share at $0.6. The stock has had a couple of great days, gaining 7.13% over the last week.

4. AFLAC Inc. (AFL): Accident & Health Insurance Industry. Market cap of $21.18B. Dividend yield at 2.65%. TTM payout ratio 25.92% vs. 3-year average payout ratio at 29.53%. TTM operating cash flow/revenue at 37.9% vs. 3-year average at 32.42%. Expected dividend per share $1.23 vs. most recent dividend per share at $1.14. Might be undervalued at current levels, with a PEG ratio at 0.85, and P/FCF ratio at 2.89. The stock has performed poorly over the last month, losing 16.86%.

5. Autoliv, Inc. (ALV): Auto Parts Industry. Market cap of $6.21B. Dividend yield at 2.57%. TTM payout ratio 14.52% vs. 3-year average payout ratio at 26.41%. TTM operating cash flow/revenue at 12.13% vs. 3-year average at 10.49%. Expected dividend per share $1.77 vs. most recent dividend per share at $1.05. The stock has gained 42.18% over the last year.

6. First Commonwealth Financial Corp. (FCF): Regional Banks Industry. Market cap of $548.68M. Dividend yield at 2.29%. TTM payout ratio 14.25% vs. 3-year average payout ratio at 174.79%. TTM operating cash flow/revenue at 40.45% vs. 3-year average at 33.52%. Expected dividend per share $0.12 vs. most recent dividend per share at $0.06. The stock is a short squeeze candidate, with a short float at 6.06% (equivalent to 12.13 days of average volume). The stock has performed poorly over the last month, losing 12.98%.

7. Commerce Bancshares Inc. (CBSH):
Regional Banks Industry. Market cap of $3.55B. Dividend yield at 2.26%. TTM payout ratio 33.25% vs. 3-year average payout ratio at 39.45%. TTM operating cash flow/revenue at 78.46% vs. 3-year average at 35.33%. Expected dividend per share $0.94 vs. most recent dividend per share at $0.89. The stock has gained 12.2% over the last year.

8. Union First Market Bankshares Corporation (UBSH): Regional Banks Industry. Market cap of $325.11M. Dividend yield at 2.24%. TTM payout ratio 26.62% vs. 3-year average payout ratio at 55.6%. TTM operating cash flow/revenue at 35.37% vs. 3-year average at 15.27%. Expected dividend per share $0.28 vs. most recent dividend per share at $0.25. The stock has lost 9.3% over the last year.

9. Magna International, Inc. (MGA): Auto Parts Industry. Market cap of $10.89B. Dividend yield at 2.22%. TTM payout ratio 15.21% vs. 3-year average payout ratio at 58.03%. TTM operating cash flow/revenue at 6.67% vs. 3-year average at 5.04%. Expected dividend per share $0.78 vs. most recent dividend per share at $0.42. The stock has performed poorly over the last month, losing 11.46%.

10. BOK Financial Corp. (BOKF):
Regional Banks Industry. Market cap of $3.52B. Dividend yield at 2.14%. TTM payout ratio 27.04% vs. 3-year average payout ratio at 31.61%. TTM operating cash flow/revenue at 61.39% vs. 3-year average at 20.75%. Expected dividend per share $1.08 vs. most recent dividend per share at $0.99. The stock has gained 3.19% over the last year.

11. U.S. Bancorp (USB):
Regional Banks Industry. Market cap of $46.84B. Dividend yield at 2.06%. TTM payout ratio 14.23% vs. 3-year average payout ratio at 50.96%. TTM operating cash flow/revenue at 47.39% vs. 3-year average at 39.74%. Expected dividend per share $0.48 vs. most recent dividend per share at $0.2. The stock has gained 7.71% over the last year.

*Data sourced from Screener.co and Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 11 High-Yield Stocks With Decreasing Payout Ratios and Improving Cash Flows