10 High-Yielding Dividend Stocks And 10 Growth Stocks For Your 2012 Portfolio

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 |  Includes: AGNC, CI, CMO, CRD.B, CYS, DVN, HTS, HUM, IVR, MFA, NEU, NLY, NR, ORAN, OZM, PSEC, RDEN, SGI, SMP, TSCO
by: Epsilon

If you haven't read What Works on Wall Street: A Guide to the Best-Performing Investment Strategies of All Time by James P. O'Shaughnessy, you should. Using 45 years of S&P Compustat market data and a systematic, fundamental approach, O'Shaughnessy researched the performance of many different investment strategies and concluded that some produced greater returns than the S&P 500 while others produced less.

This type of analysis may sound anything but groundbreaking in our current, digital trading universe but very few studies, if any, have been executed so thoroughly, with such vast data, and with such attention to detail. The two top performing strategies in this book, considered by many as the Bible of investing, are O'Shaughnessy's Cornerstone Growth and Cornerstone Value strategies. These two strategies have consistently yielded strong returns and, not surprisingly, have been used by investment firms, mutual funds, and portfolio managers around the world.

The Cornerstone Value strategy includes stocks with the following fundamental parameters:

  • Market cap > $1 billion
  • Shares outstanding > the market mean
  • Trailing 12 month sales greater than or equal to 1.5 times the market mean
  • Cash flow per share > the market mean
  • Exclude Utilities stocks
  • Rank by highest dividend yield

The Cornerstone Growth strategy includes stocks with the following fundamental parameters:

  • Market cap > $150 million
  • Price to sales ratio < 1.5
  • 5 years consistent EPS (earnings per share) growth
  • Rank by relative strength

Having adapted these strategies for my clients and personal use and as O'Shaughnessy found that December is the best month to rebalance a long term portfolio, below are ten dividend stocks and ten growth stocks worth considering for your 2012 portfolio.

10 Value Stocks:

1. AGNC: American Capital Agency Corp.

  • 19.38% dividend yield
  • 421.97% sales Q/Q
  • $5.31 billion market cap

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2. IVR: Invesco Mortgage Capital Inc.

  • 17.68% dividend yield
  • 283.43% sales Q/Q
  • $1.70 billion market cap

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3. CYS: CYS Investments Inc

  • 15.00% dividend yield
  • 295.83% sales Q/Q
  • $1.10 billion market cap

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4. HTS: Hatteras Financial Corp

  • 14.98% dividend yield
  • 72.60% sales Q/Q
  • $2.04 billion market cap

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5. NLY: Annaly Capital Management, Inc.

  • 14.89% dividend yield
  • 32.41% sales Q/Q
  • $15.64 billion market cap

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6. MFA: MFA Financial, Inc.

  • 14.64% dividend yield
  • 34.23% sales Q/Q
  • $2.43 billion market cap

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7. CMO: Capstead Mortgage Corp.

  • 14.13% dividend yield
  • 54.57% sales Q/Q
  • $1.06 billion market cap

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8. OZM: Och-Ziff Capital Management Group LLC

  • 13.03% dividend yield
  • 21.99% sales Q/Q
  • $3.03 billion market cap

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9. PSEC: Prospect Capital Corporation

  • 12.95% dividend yield
  • 57.17% sales Q/Q
  • $1.03 billion market cap

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10. FTE: France Telecom

  • 12.08% dividend yield
  • 1.92% sales Q/Q
  • $44.27 billion market cap

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10 Growth Stocks:

1. HS: HealthSpring Inc.

  • $3.70 billion market cap
  • 0.74 P/S (price to sales)
  • 70.05% annual EPS growth over the past five years

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2. CRD-B: Crawford & Company

  • $312.94 million market cap
  • 0.25 P/S
  • 15.31% annual EPS growth over the past five years

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3. NEU: NewMarket Corp.

  • $2.68 billion market cap
  • 1.27 P/S
  • 49.94% annual EPS growth over the past five years

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4. HUM: Humana Inc.

  • $14.20 billion market cap
  • 0.39 P/S
  • 29.29% annual EPS growth over the past five years

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5. NR: Newpark Resources Inc.

  • $849.42 million market cap
  • 0.96 P/S
  • 12.18% annual EPS growth over the past five years

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6. XTXI: Crosstex Energy Inc.

  • $609.69 million market cap
  • 0.31 P/S
  • 22.11% annual EPS growth over the past five years

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7. SGI: Silicon Graphics International Corp.

  • $449.07 million market cap
  • 0.65 P/S
  • 4.43% annual EPS growth over the past five years

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8. RDEN: Elizabeth Arden, Inc.

  • $1.05 billion market cap
  • 0.88 P/S
  • 5.14% annual EPS growth over the past five years

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9. TSCO: Tractor Supply Company

  • $5.35 billion market cap
  • 1.33 P/S
  • 16.56% annual EPS growth over the past five years

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10. SMP: Standard Motor Products Inc.

  • $460.75 million market cap
  • 0.53 P/S
  • 28.03% annual EPS growth over the past five years

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Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in AGNC, IVR, CYS, HTS, NLY, MFA, CMO, OZM, PSEC, FTE, HS, CRD.B, NEU, HUM, NR, XTXI, SGI, RDEN, TSCO, SMP over the next 72 hours.