9 Dividend Stocks Growing The Bottom Line With Impressive Profitability

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 |  Includes: AGNC, ARCC, BMA, ERF, FRO, GOGL, KKR, ORAN, TEF
by: Follow My Alpha

Reviewing Return on Equity (ROE) in full detail is a great way to get a picture of a company. This stems from the fact that ROE can be broken down into several segments to illustrate the various part of a company and show how they are performing. ROE is sometimes referenced as DuPont analysis and can be a 3 or 5-part equation.

ROE = Profit Margin (Profit/Sales) * Total Asset Turnover (Sales/Assets) * Equity Multiplier (Assets/Equity)

3-Part DuPont analysis illustrates how ROE is affected in three different manners:

  • Operating efficiency, which relates to the profit margin
  • Asset use efficiency, which relates to the total asset turnover
  • Financial leverage, which relates to the equity multiplier

We ran a screen for dividend stocks that are growing their EPS by a fair rate despite economic uncertainty (1-Year Fiscal EPS Growth>10%). From this narrowed pool we then screened for firms with a sound ROE ratio (ROE>10%).

The list is ranked from highest to lowest by ROE.

1. American Capital Agency Corp. (NASDAQ:AGNC)

Sector

Real Estate

Industry

REIT - Residential

Market Cap

$5107M

Beta

0.39

Analyst Sentiment

13/17-List Buy/Outperform (Bullish)

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The company operates as a real estate investment trust (REIT). The firm’s Dividend Yield is 19.57%. AGNC’s 1-Year Fiscal EPS Growth rate is 16.37%. The firm’s Return on Equity is 18.3%. The short interest for the firm is 4% as of 8/15/2011.

2. Frontline, Ltd. (NYSE:FRO)

Sector

Industrials

Industry

Shipping & Ports

Market Cap

$536M

Beta

1.38

Analyst Sentiment

10/25-List Hold/Neutral (Neutral)

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The company operates oil tankers and oil/bulk/ore (OBO) carriers. The firm’s Dividend Yield is 5.81%. FRO’s 1-Year Fiscal EPS Growth rate is 56.82%. The firm’s Return on Equity is 12.53%. The short interest for the firm is 22% as of 8/15/2011.

3. Knightsbridge Tankers, Ltd. (VLCCF)

Sector

Industrials

Industry

Shipping & Ports

Market Cap

424

Beta

1.01

Analyst Sentiment

3/6 -List Hold/Neutral (Neutral)

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The company engages in the seaborne transportation of dry bulk cargo and crude oil. The firm’s Dividend Yield is 11.53%. VLCCF’s EPS Growth is 59.06%. The firm’s 1-Year Fiscal EPS Growth rate is 11.96%. The short interest for the firm is 9% as of 8/15/2011.

4. Ares Capital Corporation (NASDAQ:ARCC)

Sector

Financial Services

Industry

Asset Management

Market Cap

$2816M

Beta

2.01

Analyst Sentiment

14/15 -List Buy/Outperform (Bullish)

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The company is a private equity firm specializing in complex financing, leveraged transactions, and more. ARCC’s Dividend Yield is 10.2%. The firm’s 1-Year Fiscal EPS Growth rate is 96.48%. The firm’s Return on Equity is 15.26%. The short interest for the firm is 2% as of 8/15/2011.

5. France Telecom SA (FTE)

Sector

Communication Services

Industry

Telecom Services

Market Cap

47124

Beta

0.79

Analyst Sentiment

17/31-List Hold/Neutral (Neutral)

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The company offers telephone services, mobile telecommunications, data transmission, and more. The firm’s Dividend Yield is 8.12%. FTE’s 1-Year Fiscal EPS Growth rate is 34.91%. The firm’s Return on Equity is 10.56%. The short interest for the firm is N/A as of 8/15/2011.

6. KKR Financial Corporation (KFN)

Sector

Financial Services

Industry

Asset Management

Market Cap

$1357M

Beta

3.08

Analyst Sentiment

6/6 -List Buy/Outperform (Bullish)

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The company invests while using leverage to generate competitive risk-adjusted returns in multiple asset classes. The firm’s Dividend Yield is 9.45%. The firm's 1-Year Fiscal EPS Growth rate is 364%. The firm’s Return on Equity is 23.77%. The short interest for the firm is 4% as of 8/15/2011.

7. Telefonica SA (NYSE:TEF)

Sector

Communication Services

Industry

Telecom Services

Market Cap

$89044M

Beta

1

Analyst Sentiment

25/43-List Buy/Outperform (Bullish)

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The company offers fixed and mobile telephone services in Europe and South America. The firm’s Dividend Yield is 8.81%. TEF’s 1-Year Fiscal EPS Growth rate is 31.58%. The firm’s Return on Equity is 48.13%. The short interest for the firm is N/A as of 8/15/2011.

8. Enerplus Corp (NYSE:ERF)

Sector

Energy

Industry

Oil & Gas E&P

Market Cap

$4892M

Beta

1.23

Analyst Sentiment

N/A

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The company is an independent oil and gas producer. The firm’s Dividend Yield is 8%. ERF’s 1-Year Fiscal EPS Growth rate is 33.96%. The firm’s Return on Equity is 13.88%. The short interest for the firm is N/A as of 8/15/2011.

9. Macro Bank, Inc. (NYSE:BMA)

Sector

Financial Services

Industry

Banks - Regional - Latin America

Market Cap

$1569M

Beta

1.19

Analyst Sentiment

5/7-List Hold/Neutral (Neutral)

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The company offers banking products and services to a variety of customers in Argentina. The firm’s Dividend Yield is 7.9%. BMA’s 1-Year Fiscal EPS Growth rate is 34.92%. The firm’s Return on Equity is 27.26%. The short interest for the firm is N/A as of 8/15/2011.

We hope this helps investors as they do their own due diligence on dividend stocks.

Disclosure: I am long FRO.