This screen looks for stocks with a dividend yield of 3% or more with a long-term growth rate of 15% in the next 3-5 years. The idea is to invest in dividend stocks that have growth potential to increase future dividends and to have capital appreciation. As earnings continue to grow, the price must move up eventually to reflect these earnings. In the meantime, you get paid dividends while watching the EPS growth over the next few years.
Here is a brief summary of stocks making the list (see chart below, click to enlarge).
METHANEX CORP (NASDAQ:MEOH) - engages in the production, marketing, and sale of methanol. Methanol is a clear colorless liquid chemical that is primarily used to produce formaldehyde, acetic acid and a variety of other chemicals. The company supplies methanol to the major international markets of North America, Asia Pacific and Europe as well as Latin America. Currently trading at $23.00 with a dividend yield of 3.0%, Methanex Corp.'s earnings have increased from $0.89 to an estimated $1.95 over the past 5 quarters. The stock is down nearly 23% in the past year (due to euro concerns) so the price momentum is low making a new entry point as the price turns up.
STEEL DYNAMICS INC (NASDAQ:STLD) - engages in the manufacture and sale of steel products in the United States. It operates in three segments: Steel Operations, Metals Recycling and Ferrous Resources Operations, and Steel Fabrication Operations. Currently trading at $12.13 with a dividend yield of 3.3%. STLD’s per share growth rates have risen over the past year relative to the past five years, which is positive. STLD appears undervalued based on its Price/Sales (NYSE:TTM) of 0.32, which is less than the Materials sector’s bottom quintile value of 0.41.
KRONOS WORLDWIDE INC (NYSE:KRO) - engages in the production and marketing of titanium dioxide pigments primarily in North America and Europe. Currently trading at $19.05 with a dividend yield of 3.2%. Kronos Worldwide Inc.'s operating earnings yield of 15.2% ranks above 94% of the other companies in the universe of stocks, indicating that it is undervalued.
SEAGATE TECHNOLOGY PLC (NASDAQ:STX) - produces a range of disk drive products that address enterprise applications for use in enterprise servers, mainframes and workstations; client compute applications, where its products are designed for desktop and notebook computers; and client non-compute applications, where its products are designed for a range of end user devices such as digital video recorders, personal data backup systems, portable external storage systems and digital media systems. Currently trading at $16.65.00 with a dividend yield of 4.5%. Analyst forecasts have recently been raised as STX recently reported better than expected results.
OLIN CORP (NYSE:OLN) - engages in the manufacture and sale of chlor alkali products in the United States and internationally. It operates through two segments: Chlor Alkali Products and Winchester. Currently trading at $18.00 with a dividend yield of 4.4%. OLN’s per share growth rates have risen over the past year relative to the past five years, which is positive. OLN appears undervalued based on its Price/Earnings (TTM) of 6.30, which is less than the Materials sector’s bottom quintile value of 9.10.
SOUTHERN COPPER CORP (NYSE:SCCO) - engages in mining, exploring, smelting, and refining copper ores in Peru, Mexico, and Chile. Currently trading at $26.70 with a dividend yield of 8.4%. SCCO has a long-term earnings growth rate of 15%. SCCO/Materials sector currently lays 0.71% above its 50-day moving average, but 5.19% below its 200-day moving average.
ADVANCE AMERICA CASH (NYSE:AEA) - provides cash advance services in the United States, the United Kingdom, and Canada. This business increases as the economy falters as more people want access to their future paychecks today. Currently trading at $8.20 with a dividend yield of 3.0%. AEA is rated as very bullish among a consensus of analysts. Advance America Cash Advance Centers Inc.'s stock price is up 54.6% in the last 12 months, down 6.1% in the past quarter and up 1.9% in the past month.
TESSCO TECHNOLOGIES INC (NASDAQ:TESS) - provides products and value chain solutions to support the construction, operation, and use of mobility and data wireless systems primarily in the United States. Currently trading at $13.46 with a dividend yield of 4.56%. Tessco Technologies Inc.'s operating earnings yield of 13.6% ranks above 92% of the other companies in the universe of stocks, indicating that it is undervalued. TESS's earnings have increased from $1.29 to an estimated $1.80 over the past 5 quarters, they have shown no acceleration or deceleration in quarterly growth rates when adjusted for the volatility of earnings.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.