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This is part III of the dividend champ series. In part II we looked at seven stocks with yield as high as 23%. Extreme volatility is propelling more and more investors into dividend yielding investments in contrast to speculative investments.

Our favourite play on the list is VGR; it has increased its dividends for 12 years in a row, has an earnings growth rate of 60.9%, a decent five-year dividend growth rate of 5.00%, a total return for the past three years and five years of 93% and 86% respectively, and it has been paying dividends since 1990.

Another noteworthy player is Seadrill Limited Ordinary Share (SDRL); it has a yield of 7%, a total three year return of 437%, a very strong 3 year dividend growth rate of 115%, operating cash flow of $1.7 billion, a ROE of 31%, a price/book of 2.31, price/sales of 4.75, a price/cash flow of 7.50, a price to tangible book of 2.91, earnings per share of 3.06 and sales per share of 6.71. Investors who are seeking higher yields but are open to more risk might find some interesting ideas in our latest article, "The Highest Paying REITs With Yields As High As 25%." For those seeking a balance of high yields and moderate risk the following article might prove to be of interest, "5 Magnificent Material Plays With Tempting Yields As High As 10.5%."

Stock

Yield

Market cap

Forward PE

EBITDA

Quarterly revenue growth

Operating margins

Revenue

Cash flow

VGR

8.60%

1.43B

18

143.1M

1.90%

23.8%

546M

29.9M

SID

10.5%

10.6B

3.57

3.40B

34.18%

7.4%

8.52B

1.55B

STD

9.7%

65B

6

9.65B

7.6%

34.03%

43.7B

69B

PBI

8.10%

3.66

8.49

1.09B

-3.4%

15.13%

5.42B

1.04B

CLMT

10.10%

985M

9.37

136.8M

30%

2.71%

2.71B

45.8M

RSO

18.10%

426M

13

-------

29.20%

56%

66M

15M

Vector Group Ltd. (VGR)

VGR has an enterprise value of $1.56 Billion, a quarterly earnings growth rate of 60.9%, a ROE of 7.7%, a total three-year return of 93%, a EPS of 0.94, sales per share of 14.08, cash flow per share of 11.18, price/sales of 1.24, and a price/cash flow of 14.90. VGR also has price to tangible book of -7.98, and a levered free cash flow rate of 58.19 million. Out of a possible five stars, we would assign VGR 4 stars.

Net income for the past three years is as follows; in 2008, it was $60 Million, in 2009 it dropped to $24.8 million and in 2010, it doubled to $54 million. For 2011, it stands at $66 million.

Insider Trading

  1. Short percentage of float is 7.7%
  2. ROE 9.26%
  3. Total debt $ 517 million
  4. 200 day moving average $ 17.86
  5. Book value -$0.84
  6. Dividend yield 5 year Average 9.5%
  7. Dividend rate $1.60
  8. Payout ratio 163%
  9. Dividend growth rate 5 year average 5.00%
  10. Consecutive dividend increases 12 years
  11. Paying dividends since 1990
  12. Total return last 3 years 93%
  13. Total return last 5 years 86%

As long as it does not close below 17.00 on a weekly basis the outlook will remain bullish. A weekly close above 18.50 should lead to a series of new highs.

Companhia Siderurgica Nacional (SID)

It primarily operates as an integrated steel producer in Brazil and Latin America. The company principally produces carbon steel and various steel products.

SID has a five year dividend growth rate of 12.36%, price/earnings of 3.60, price/cash flow of 4.70, a price/book of $2.56, a quarterly earnings growth rate of 52%, a quarterly revenue growth rate of 7.4%, a five-year dividend average of 6.7%, a total rate of return for the last three years of 39%, a dividend rate of $0.64 and has been paying dividends since1994.

Net income for the last three years is as follows; in 2008 it was $2.65 billion, in 2009 it dropped to 1.5 billion and in 2010 it was virtually unchanged from $1.51 billion. Gross profits for the same time period are as follows; in 2008 they stood at $3.58 billion, in 2009 they stood at $2.26 billion and in 2010, they jumped up to $4.07 billion.

The number of shares short the last month was 7.60 million and for the current month it stands at 8.89 million shares.

DIVIDENDS (Trailing 12 Quarters)

  1. ROE 40.16%
  2. Return on assets 8.26%
  3. Total debt 14.94B
  4. 200 day moving average $9.73
  5. Book value $3.08
  6. Dividend yield 5 year Average 6.70
  7. Dividend rate $0.64
  8. Dividend growth rate 5 year average 12.36%
  9. Consecutive dividend increases 0 years
  10. Paying dividends since 1994
  11. Total return last 3 years 39%
  12. Total return last 5 years 107%

Banco Santander SA (STD)

It has enterprise value of $126 billion, a price/sales value of 1.46, a revenue growth (yoy) of 7.6%, a five-year dividend growth rate of 13.25%, a total return of 3.94% for the past three years, a price/sales 0.83, a price/book 0.65, a price/cash flow 7.10, a EPS 0.91, sales per share of 9.55 and has been paying dividends since 1990.

Net income for the last three years is as follows; 2008 it came in at $13.1 billion, 2009 it moved up a bit to $13.5 billion and in 2010, it dropped to $12.2 billion.

STD is trading $4.09 below book value and has a quarterly earnings growth rate (yoy) of 10.3%

EARNINGS ESTIMATES

EARNINGS PER SHARE (Trailing 12 Quarters) DIVIDENDS (Trailing 12 Quarters)

  1. ROE 10.73%
  2. Return on assets 0.67%
  3. Total debt $420B
  4. 200 day moving average $ 9.07
  5. Book value $10.62
  6. Dividend yield 5 year Average 7.10%
  7. Dividend rate $0.69
  8. Payout ratio --
  9. Dividend growth rate 5 year average 13.25%
  10. Paying dividends since 1990
  11. Total return last 3 years 3.94%
  12. Total return last 5 year -41%

Pitney Bowes Inc. (PBI)

Pitney Bowes has an enterprise value of $7.4 billion and price/sales value of 0.68. PBI has a price/cash flow ratio of 5.10, a price to book of 0.00, price/sales of 0.68, and price earnings of 8.80. It also sports earnings per share of 2.81, sales per share of 26.91, and a cash flow per share of 3.60.

PBI has a quarterly revenue growth (yoy) of -3.4%, a very strong quarterly earnings growth rate of 94.3%, a sizzling ROE for 164%, a five-year dividend growth rate of 3.52%, and has been paying dividends since 1934. It has a rather robust levered free cash flow rate of $888 million. Net income for the past three years is as follows; in 2008, it stood at $419 million, in 2009 it moved up a bit to $444 million and in 2010, it dropped down to $310 million. Net income for 2011 so far is roughly $360 million.

EARNINGS ESTIMATES

  1. ROE - 164.71%
  2. Return on assets 6.14
  3. Total debt $4.52 B
  4. 200 day moving average $20.33
  5. Book value $-0.23
  6. Dividend yield 5 year Average 5.90%
  7. Dividend rate $ 1.48
  8. Dividend growth rate 5 year average 2.96%
  9. Paying dividends since 1934
  10. Total return last 3 years -8.35%
  11. Total return last 5 year -45%

PBI needs a weekly close above 19.15 to turn the picture bullish, and a weekly close above 21 should lead to a test of the 24-25 ranges. A daily close below 18 will most likely result in a re test of the lows, which if it occurs on a low volume would make for a nice place to open up additional longs.

Calumet Specialty Products Partners LP (CLMT)

CLMT has an enterprise value of $1.65 Billion, a quarterly earnings growth rate of -7.60, a ROE of 5.32, a 5 year dividend growth rate of 13.6%, a total three-year return of 181%, a EPS of 0.64, sales per share of 52.65, cash flow per share of 1.89, price/sales of 0.36, and a price/cash flow of 10.00 and price/book 1.77.

CLMT has price to tangible book of 2.04, price to free cash flow -1.90, a beta of 0.38, and return on investment of 2.10.

Net income for the past three years is as follows; in 2008, it was $44 Million, in 2009 it rose to $61 million and in 2010, it dropped significantly to $16 million. For 2011, it stands at $16 million.

Insiders purchased 10,000 shares in November at $18.64-1$8.72. The full list of transactions can be accessed here.

REVENUE (Trailing 12 Quarters)

DIVIDENDS (Trailing 12 Quarters)

  1. ROE 5.32%
  2. Return on assets 3.4%
  3. Total debt $ 644 million
  4. 200 day moving average $ 19.70
  5. Book value -$10.35
  6. Dividend yield 5 year Average 11.7%
  7. Dividend rate $194
  8. Payout ratio 251%
  9. Dividend growth rate 5 year average 13.66%
  10. Consecutive dividend increases 1 year
  11. Paying dividends since 2006
  12. Total return last 3 years 181%
  13. Total return last 5 years -26%

If it can close above 20 on a weekly basis, it has a real chance of testing its highs. If the volume is strong during a break out past 20, then it could go on to put in a series of new 52-week highs. A weekly close below 18, would signal that a retest of the lows.

Resource Capital Corp (RSO)

Resource Capital Corp has an enterprise value of $2.054 Billion, a price/sales value of 6.2; a quarterly earnings growth rate of 6.3%, a ROE of 7.3%, a total three-year return of 98%, a EPS of 0.32, sales per share of 1.64, cash flow per share of 0.38, price/sales of 3.53, a price/book 1.04 and a price/cash flow of 16.10. RSO announced a dividend payment of $0.25 per common share for the quarter ending Dec 31, 2011.

Net income for the past three years is as follows; in 2008, it was -$3. Million, in 2009 it tripled to $6.3 million and in 2010, it tripled again to $19 million. For 2011, it stands at $37.2 million. Insiders have purchased over 56,000 shares since March at $.478-$7.13 a share. The full list of insider transactions can be accessed here.

The numbers of shares short for the previous month stood at 3.25 million and for the current month the number has moved up to 3.7 million shares.

EARNINGS ESTIMATES

Potential negatives

It has a rather lofty payout ratio of 312%

  1. ROE 7.32%
  2. Quarterly earnings growth (year over year) 6.3%
  3. Total debt $1.7 billion
  4. 200 day moving average $ 5.61
  5. Book value $5.76
  6. Dividend yield 5 year Average 22.5
  7. Dividend rate $1.00
  8. Payout ratio 312%
  9. Dividend growth rate 5 year average 2.13
  10. Consecutive dividend increases 0 years
  11. Paying dividends since 2006
  12. Total return last 3 years 98%
  13. Total return last 5 years -26

As long as it does not close below 5.00 on a weekly basis the outlook will remain bullish. Currently, it is projecting a test of the 6.50-6.60 ranges. A weekly close above 6 could propel it as high as 7.20-7.50 before a correction takes hold. A good point of entry would be in the 5.20-5.40 ranges.

All the graphs (earning estimates, dividend, revenue growth rates, earnings per share, etc) were provided courtesy of dailyfinance.com

Disclaimer: Do not treat this as a buying list. It is very important that you check the finer details in each of the mentioned plays before investing any capital in them. Some investors are happy with taking enormous amounts of risks, while others are bothered by the slightest degree risk; it is imperative that you do your due diligence and then determine if any of the above plays meet with your risk tolerance levels. The Latin maxim caveat emptor applies-let the buyer beware.

Source: 7 Dividend Champs With Yields As High As 18%, Part III