7 Dividend Stocks With Yields As High As 19.9%

|
Includes: AGNC, DPM, EMR, MWE, ORI, SCCO, SID
by: Tactical Investor

Normally, individuals need to focus on Payout ratios, but in the case of MLPs the payout ratio is not really that important because MLPs are required by law to pay a majority of their cash flow as dividends. Payout ratios are calculated by dividing the dividend rate by the net income per share, and this is why the payout ratio for MLPs is often higher than 100%. The more important ratio to focus on as far as MLPs and REITs are concerned is the cash flow per unit. If one focuses on the cash flow per unit, one will see that in most cases, it exceeds the distribution declared per unit.

The following metrics have also been provided: Enterprise value, levered free cash flow rates and operating cash flows.

Enterprise value is a combination of the market cap, debt, minority interests, preferred shares less total cash and cash equivalents. This provides a better picture because it is a more accurate representation of a company's value contrary to simply looking at the market cap.

Levered free cash flow is the amount of cash available to stock holders after interest payments on debt are made. A company with a small amount of debt will only have to spend a modest amount of money on interest payments, which in turn means that there is more money to send to shareholders in the form of dividends and vice versa. (Individuals interested in small cap stocks that offer high yields might find this article to be of interest; 4 stocks with yields as high as 10% were examined.)

Operating cash flow is generally a better metric than earnings per share, because a company can show positive net earnings and still not be able to properly service its debt; the cash flow is what pays the bills.

Stock

Dividend

Market Cap

Forward PE

EBITDA

Beta

Quarterly revenue growth

Revenue

Operating

Cash flow

DPM

5.7%

2.11B

29

195.9M

0.76

29%

1.53B

152M

EMR

3.4%

34.3B

11

5.1B

1.40

12.1%

24.2B

3.23B

SID

10.5%

11.77B

3.57

3.40B

1.59

7.4%

8.52B

1.55B

SCCO

8.6%

25.18B

10.2

3.92B

1.69

38.8%

6.65B

2.14B

MWE

5.4%

4.76B

23

544.4M

0.94

24%

1.47B

446M

ORI

7.5%

2.38B

62

-255.5M

0.88

-6.12%

4.5B

-236M

AGNC

19.9%

5.19B

4.75

-----

0.97

320%

757M

509M

DCP Midstream Partners LP. (NYSE:DPM)

It has enterprise value of $2.86 billion, a quarterly revenue growth of 29.2%, a ROE of 14%, a five-year dividend growth rate of 17.3%, a five- year dividend yield average of 9.70%, a very strong total return of 424% for the past three years, and has increased its dividend consecutively for four years in a row. It has a levered free cash flow rate of $84.25 million.

DCP Midstream Partners LP per share data:

  • Earnings 1.72
  • Sales 33.28
  • Cash Flow 4.34

Net income for the past three years is as follows: in 2008 it was $125 million; in 2009 it turned negative to -$19 million; in 2010 it moved up to $48 million. For 2011, net income stands roughly at $102 million.

Key ratios:

  • Price to tangible book 5.23
  • Price to cash flow 10.40
  • Price to free cash flow -6.10
  • 5 year sales growth 11.62%
  • Inventory turnover 29.10
  • Asset turnover 0.90

  • ROE 14.35%
  • Return on assets 4.39%
  • Total debt $748 million
  • 200 day moving average $ 40.96
  • Book value $14.63
  • Dividend yield 5 year Average 9.70
  • Dividend rate $2.52
  • Payout ratio 144%
  • Dividend growth rate 5 year average 17.3%
  • Consecutive dividend increases 4 years
  • Paying dividends since 2006
  • Total return last 3 years 424%
  • Total return last 5 years 67%

Emerson Electric Co. (NYSE:EMR)

It has enterprise value of $37.46 billion and price/book value of 3.21. It has a quarterly revenue growth of 12%, a quarterly earnings growth rate of 1.6%, a ROE of 24%, a decent five-year dividend growth rate of 9.9%, a total return of 42.99% for the past three years, and has been paying dividends since 1947. It has a very healthy levered free cash flow rate of $2.43 billion.

Key ratios

  • Price to tangible book -101
  • Price to cash flow 10.20
  • Price to free cash flow 24.40
  • 5 year sales growth 1.56

  • ROE 24.43%
  • Return on assets 11.32%
  • Total debt $5.2B
  • 200 day moving average $ 48.73
  • Book value $14.07
  • Dividend yield 5 year Average 2.80%
  • Dividend rate $1.60
  • Payout ratio 44%
  • Dividend growth rate 5 year average 9.19%
  • Paying dividends since 1947
  • Total return last 3 years 42.99%
  • Total return last 5 year 17.18%

Companhia Siderurgica Nacional (NYSE:SID)

SID has enterprise value of $18.19 billion, a five-year dividend growth rate of 12.36%, 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.

Companhia Siderurgica Nacional per share data:

  • Earnings 2.21
  • Sales 7.74
  • Cash Flow 1.69

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.

Potential negative

It has a negative levered free cash flow rate (-$1.32 billion).

Key ratios:

  • Price to tangible book 2.75
  • Price to cash flow 4.70
  • Price to free cash flow -6.70
  • 5 year sales growth 19.71%
  • Inventory turnover 2.90
  • Asset turnover 0.50

  1. ROE 40.16%
  2. Return on assets 8.26%
  3. Total debt 14.94B
  4. 200 day moving average $9.49
  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%

Southern Copper Corp. (NYSE:SCCO)

SCCO has an enterprise value of $26.15 billion, a very strong five-year dividend growth rate of 53.4%, an impressive quarterly earnings growth rate of 81.6%, a quarterly revenue growth rate of 38.8%, a five-year dividend average of 6.6%, a total rate of return for the last three years of 121%, and has been paying dividends since 1994.

Southern Copper Corp per share data:

  • Earnings 2.71
  • Sales 7.91
  • Cash Flow 3.08

Net income for the last three years is as follows: in 2008, it was $1.4 billion; in 2009 it dropped to $929 million; in 2010, it surged up to $1.5 billion. For 2011 so far, net income is $1.8 billion. SCCO also has a very strong levered free cash flow rate of $1.53 billion. The dividend was increased from $0.62 to $0.70.

Key ratios:

  • Price to tangible book 6.30
  • Price to cash flow 9.70
  • Price to free cash flow 250
  • 5 year sales growth -0.08
  • Inventory turnover 5.10
  • Asset turnover 0.90

  • ROE 57.32%
  • Return on assets 28.73%
  • Total debt $2.75B
  • 200 day moving average $30.79
  • Book value $4.89
  • Dividend yield 5 year Average 6.60%
  • Payout ratio 90%
  • Dividend rate $2.46
  • Dividend growth rate 5 year average 53.4%
  • Dividend growth rate 3 year average 83.9%
  • Consecutive dividend increases 0 years
  • Paying dividends since 1996
  • Total return last 3 years 129%
  • Total return last 5 years 113%

MarkWest Energy Partners LP. (NYSE:MWE)

It has enterprise value of $5.99 billion, a quarterly revenue growth of 37%, a ROE of 7.09%, a five-year dividend growth rate of 8.24%, a total return of 742% for the past three years, and has been paying dividends since 2002. It has a levered free cash flow rate of -$38 million.

MarkWest Energy Partners LP per share data:

  • Earnings 0.89
  • Sales 16.63
  • Cash Flow 3.22

Net income for the past three years is as follows: in 2008, it was $208 million; in 2009 it turned negative to -$118 million; in 2010 it turned positive to a very low figure of $467,000. For 2011, net income so far stands at $130 million. If the net income for next quarters matches that of the current quarter, net income for 2011 could soar well past the $270 million mark.

Key ratios:

  • Price to tangible book 6.60
  • Price to cash flow 16.80
  • Price to free cash flow -9.60
  • 5 year sales growth 17.23%
  • Inventory turnover 18.50
  • Asset turnover 0.40

.

  • ROE 7.09%
  • Return on assets 6.12%
  • Total debt $1.48B
  • 200 day moving average $ 48.62
  • Book value $17.42
  • Dividend yield 5 year Average 11%
  • Dividend rate $2.75
  • Payout ratio 299%
  • Dividend growth rate 5 year average 8.24%
  • Consecutive dividend increases 0 years
  • Paying dividends since 2002
  • Total return last 3 years 742%
  • Total return last 5 years 128%

Old Republic International Corp (NYSE:ORI)

It has an enterprise value of $1.89 billion and price/sales value of 0.63. It has a quarterly revenue growth (yoy) of 12.9%, a five-year dividend growth rate of 3.52%, an anaemic total return of 5.25%% for the past three years, and has been paying dividends since 1942. It has a rather large negative levered free cash flow rate of -$1.18 billion, and it is trading over $6 below book value.

Old Republic International Corp per share data:

  • Earnings -.082
  • Sales 17.41
  • Cash Flow -0.81

After dropping for two years in a row, net income is started to rise again. In 2008, it was -$558 million; in 2009 it was -$99 million; in 2010, net income turned positive to $30.1 million. For 2011, things are not looking bright so far; net income has experienced another huge drop and turned negative once again; for 2011, net income so far is -$194 million.

Key ratios:

  • Price to tangible book 5.23
  • Price to cash flow 10.40
  • Price to free cash flow -6.10
  • 5 year sales growth 11.62%
  • Inventory turnover 29.10
  • Asset turnover 0.90

  • ROE -5.32%
  • Return on assets -1.15%
  • Total debt $912M
  • 200 day moving average $9.73
  • Book value $14.98
  • Dividend yield 5 year Average 5.90%
  • Dividend rate $ 0.70
  • Payout ratio 532%
  • Dividend growth rate 5 year average 3.51%
  • Paying dividends since 1942
  • Total return last 3 years 5.26%
  • Total return last 5 year -45%

American Capital Agency Corp (NASDAQ:AGNC)

It has enterprise value of $43.8 billion, a price/sales value of 7.00, a revenue growth (of 322%, a quarterly earning's growth rate of 317%, a total return of 116% for the past three years, and a three-year dividend growth rate of 97%.

American Capital Agency Corp per share data:

  • Earnings 7.15
  • Sales 5.32
  • Cash Flow 7.40

Net income for the past three years is as follows: for 2008, it was $35 million; in 2009 it came in at $118 million; in 2010; it soared to $288 million.

Key ratios:

  • Price to tangible book 1.05
  • Price to cash flow 7.40
  • Price to free cash flow 111
  • 5 year sales growth N/A
  • Inventory turnover N/A
  • Asset turnover 0.00

  • ROE 23.9%
  • Quarterly earnings growth (year over year) 317%
  • Total debt $40.16 billion
  • 200 day moving average $28.48
  • Book value $26.91
  • Dividend yield 5 year Average N/A
  • Dividend rate $ 5.60
  • Pay out ratio 78%
  • Dividend growth rate 3 year average 97%
  • Consecutive dividend increases 2 years
  • Paying dividends since 2008
  • Total return last 3 years 116%
  • Total return last 5 years N/A

Conclusion

Our favorite play on the list is SCCO, followed closely by MWE. We like SCCO because it has a very strong five-year dividend growth rate of 53.4%, an impressive quarterly earnings growth rate of 81.6%, a quarterly revenue growth rate of 38.8%, a five-year dividend average of 6.6%, a total rate of return for the last three years of 121%, and has been paying dividends since1994. Investors seeking stocks with stellar histories of consecutively increasing their dividends for more than 30 years in a row might find this article to be of interest.

All charts were sourced from dividata.com

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

Disclaimer: This list of stocks is meant to serve as a starting point. Please 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.