Dividend Champs With Yields As High As 14%

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Includes: EPD, NLY, PFE, RAI, SAN, TCAP, WFC
by: Tactical Investor

Our favorite play on this list is Enterprise Products Partners LP (NYSE:EPD). It has enterprise value of $56.2 billion, a quarterly revenue growth of 40.40%, a ROE of 14.55%, a five-year dividend growth rate of 6.03%, a total return of 144% for the past three years, and has been paying dividends since 1998. It has a levered free cash flow rate of -$1.01 billion. Out of a possible five stars, we would assign EPD four. The dividend was raised from $0.6050 to $0.6125. Net income for 2011 has surged and could potentially top the $1.7 billion mark. As a comparison net income for 2010 came in at $320.8 million.

Two other noteworthy players are Pfizer Inc (NYSE:PFE) and Wells Fargo & Co (NYSE:WFC), which have yields of 3.7% and 1.8%, respectively.

Pfizer Inc has been paying dividends since 1901, has increased them consecutively for 44 years, has a three-year total return of roughly 36.23%, a five-year dividend average of 4.9%, a quarterly earnings growth rate of 300%, a quarterly revenue growth rate of 7.5%, a ROE of 11.5%, and a very large levered free cash flow rate of $17.06 billion. In 2009 the dividend took a hit and dropped from 32 cents to 16 cents and even though it is now at 20 cents, it is still roughly 50% below its pre 2009 levels.

PFE per share data

  • Earnings 1.45
  • Sales 8.88
  • Cash Flow 2.62

Valuation ratios

  • Price Earnings 14.90
  • Price/Sales 2.44
  • Price/Book 1.85
  • Price/Cash Flow 8.30

Wells Fargo & Co has been paying dividends since 1939, has a three-year total return of 3.65%, a quarterly earnings growth rate of 21%, a quarterly revenue growth rate of 2.2%, a ROE of 11.74%, and a profit margin of 28.3%.

Wells Fargo & Co also sports the following ratios: price to tangible book of 1.53, price to cash flow of 9.70, price to free cash flow of 4.10 and a five-year sales growth rate of 20.3. Net income for the past three years is as follows: 2008 $2.65 billion, in 2009 it experienced a massive spike up to $12.2 billion and in 2010, it remained virtually unchanged at $12.3 billion. For 2011, net income so far stands at $12.1 billion.

Important facts investors should be aware in regards to investing in MLPs and REITs

  • Payout ratios are not that important when it comes to MLPs/REITs. Both are required by law to pay a majority of their cash flow as distributions. Payout ratios are calculated by dividing the dividend rate by the net income per share, and this is why the payout ratio for MLPs and REITS is often higher than 100%. The more important ratio to focus on 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/dividend declared per unit/share.
  • MLPs are not taxed like regular corporations because they pay out a large portion of their income to partners (as an investor you are basically a partner and are allocated units instead of shares) usually through quarterly distributions. The burden is thus shifted to the partners, who are taxed at their ordinary income rates. As ordinary income tax rates of investors are typically lower than the income tax assessed on corporations, this arrangement is advantageous to the MLPs and generally also to most investors.
  • MLPs issue a Schedule K-1 to their investors. If the MLP pays out distributions in excess of the income it generates, the distribution is classified as a "return of capital" and tax-deferred until you sell your shares or units. Income from MLPs is generally taxable even in retirement accounts like 401(k)s and IRAs if the income generated is in excess of $1,000.

Dividend investors should also familiarize themselves with the following metrics, as they could prove to be useful during the selection process.

Debt to Equity Ratio is found by dividing the company's total amount of long-term debt (debts with interest rates that have a maturity longer than one year) by the total amount of equity. A debt to equity ratio of 0.5 tells us that the company is using 50 cents of liabilities in addition to each $1 dollar of shareholders equity in the business.

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 searching for other investment ideas might find this article to be of interest 7 Stocks With Attractive Yields As High As 8.6%

Current Ratio is obtained by dividing the current assets by current liabilities. This ratio allows you to see if the company can pay its current debts without potentially jeopardising their future earnings. Ideally the company should have a ratio of 1 or higher.

The payout ratio tells us what portion of the profit is being returned to investors. A payout ratio over 100% indicates that the company is paying out more money to shareholders, then they are making; this situation cannot last forever. In general if the company has a high operating cash flow and access to capital markets, they can keep this going on for a while. As companies usually only pay the portion of the debt that is coming due and not the whole debt, this technique can technically be employed to maintain the dividend for sometime.

Turnover Ratio lets you know the number of times a company's inventory is replaced in a given time period. It is calculated by dividing the cost of goods sold by average inventory during the time period studied. A high turn over ratio indicates that a company is producing and selling its good and services very quickly.

Stock

Dividend Yield

Market Cap

Forward PE

EBITDA

Quarterly Rev Growth

Beta

Revenue

Operating Cash flow

TCAP

9.20%

439.06M

9.16

44.55M

65.70%

0.54

55.48M

-170.11M

RAI

5.20%

23.47B

13.51

2.66B

-1.70%

0.63

8.54B

1.11B

EPD

5.4%

42.32B

21.3

3.68B

40.4%

0.53

42.3B

3.08B

NLY

14%

16.06B

7.2

N/A

N/A

0.31

1.39B

8.19B

STD

8.00%

69.14

6.4

9.65B

7.6%

1.86

41.68B

------

Click to enlarge

Triangle Capital Corp (NYSE:TCAP)

Industry: Holding and other Investment Offices

It has a current ratio of 23.5 and a levered free cash flow of rate of $23.6 million.

Net income for the past three years

  • 2008= $7.6 million
  • 2009=-$4.03 million
  • 2010= $25.3 million
  • 2011= it stands at roughly $44 million and could potentially top the $61 million mark.

Total cash flow from operating activities

  • 2008= -$60.6 million
  • 2009 = -$13.3 million
  • 2010 = -$97.4 million
  • 2011= It stands at- $94.4 million and it could top the -$131 million mark.

Key Ratios

  • Price to sale 8.5
  • Price to tangible book 0
  • Price to cash flow 9.7
  • Price to free cash flow N.A.
  • 5 year sales growth N.A.
  • Inventory turnover 0
  • Asset turnover 0
  • ROE 20.22%
  • Return on assets 6.33%
  • 200 day moving average 17.44
  • Total debt 224.19M
  • Book value 14.59
  • Qtrly Earnings Growth 143.20%
  • Dividend yield 5 year Average 9.90%
  • Dividend rate $ 1.88
  • Payout ratio 90.00%
  • Dividend growth rate 3 year average 7.35%
  • Dividend growth rate 5 year average 0.00%
  • Consecutive dividend increases 0 years
  • Paying dividends since 2007
  • Total return last 3 years 106.36%
  • Total return last 5 years N/A %

Reynolds American Inc (NYSE:RAI)

Industry: Tobacco Products

It has a strong levered free cash flow rate of 1.42 billion and a current ratio of 1.09

Net income for the past three years

  • 2008= $1.33 billion
  • 2009 =$962 million
  • 2010 = $1.13 billion
  • 2011= it stands at $1.024 billion and could potentially top the $1.4 billion mark.

Total cash flow from operating activities

  • 2008= $1.31 billion
  • 2009 =$1.45 billion
  • 2010 = $1.26 billion
  • 2011= It stands at roughly $841 million.

Key Ratios

  • Price to sale 16.3
  • Price to tangible book 0
  • Price to cash flow 5.4
  • Price to free cash flow 6.2
  • 5 year sales growth 1.95
  • Inventory turnover 0
  • Asset turnover 0

  • ROE 19.98%
  • Return on assets 9.36%
  • 200 day moving average 38.36
  • Total debt 3.67B
  • Book value 11.52
  • Qtrly Earnings Growth -3.70%
  • Dividend yield 5 year Average 6.10%
  • Dividend rate $ 2.24 %
  • Payout ratio 95.00%
  • Dividend growth rate 3 year average 8.33%
  • Dividend growth rate 5 year average 9.52%
  • Consecutive dividend increases 2 years
  • Paying dividends since 2004
  • Total return last 3 years 130.43%
  • Total return last 5 years 58.96%

Enterprise Products Partners LP

It has enterprise value of $57.2 billion, a quarterly revenue growth of 40.40%, a ROE of 14.55%, a five-year dividend growth rate of 6.03%, a total return of 144% for the past three years, and has been paying dividends since 1998. It has a levered free cash flow rate of -$1.01 billion and a current ratio of 0.83. Out of a possible five stars, we would assign EPD four. The dividend was raised from $0.6050 to $0.6125.

Net income for the past 3 years is as follows:

  • 2008= -$954 million
  • 2009 = $204 million
  • 2010 = $320.8 million
  • 2011= It stands at-$1.32 b illion and it could top the $1.7 billion mark.

Total cash flow from operating activities

  • 2008= $1.23 billion
  • 2009 = $2.4 billion
  • 2010 = $2.3 billion
  • 2011= It stands at- $2.24 billion and it could potentially top the $2.6-$3 billion mark.

New Developments

Enterprise Products Partners LP and Genesis Energy LP have formed an agreement to build a crude oil pipeline in the Gulf of Mexico. These two companies have made transportation agreements with six crude oil producers. The pipeline is will be roughly 149 miles long and is expected to transport 115,000 barrels of oil a day. In the 50/50 joint venture, the pipeline is expected to be operational sometime in 2014.

Key ratios

  • Price to sales 0.97
  • Price to tangible book 5.37
  • Price to cash flow 26.40
  • Price to free cash flow - 32.40
  • 5 year sales growth 23.27%
  • Inventory turnover 29.80
  • Asset turnover 1.40

  • ROE 14.55%
  • Return on assets 5.23%
  • Total debt 15.4B
  • 200 day moving average $43.43
  • Book value $13.14
  • Dividend yield 5 year Average 6.5%
  • Dividend rate $2.40
  • Payout ratio 190%
  • Dividend growth rate 5 year average 6.03%
  • Consecutive dividend increases 12 years
  • Paying dividends since 1998
  • Total return last 3 years 152%
  • Total return last 5 years 104%

Annaly Capital Management Inc (NYSE:NLY)

It has a profit margin of 80.62%, a ROE of 8.73%, a five-year dividend growth rate of 40%, a five-year dividend average of 12.8%, a total return of 55% for the past three years, and has been paying dividends since 1997. It also sports a current ratio of 0.06.

The dividend was cut from 60 cents to 57 cents; the most likely reason for this is that NLY is taking action now and de leveraging its positions. It has one of the most astute management teams in the industry, and they are taking preventive action now for they feel that long-term rates may have put in a bottom.

Net income for the past three years is as follows: in 2008, it came in at $346 million, in 2009 it surged by more than 600% to $1.9 billion, and in 2010, it dropped to $1.26 billion. Net income for 2011 stands at $820 million and could potentially top the $1.27 billion mark

Total cash flow from operating activities

  • 2008= $1.1billion
  • 2009 = $10.8 billion
  • 2010 = $10.86 billion
  • 2011= It stands at $2.4 billion.

Key ratios

  • Price to sales 6.85
  • Price to tangible book 0.99
  • Price to cash flow 14.20
  • Price to free cash flow 2.50
  • 5 year sales growth 14.76%
  • Inventory turnover N/A
  • Asset turnover 0.0

  • ROE 8.73%
  • Return on assets 1.14%
  • 200 day moving average $ 17.07
  • Total debt $90.5B
  • Book value $16.91
  • Dividend yield 5 year Average 12.80%
  • Dividend rate $2.44
  • Dividend pay out ratio 120%
  • Dividend growth rate 5 year average 40.2%
  • Consecutive dividend increases 0 years
  • Paying dividends since 1997
  • Total return last 3 years 58%
  • Total return last 5 years 97%

Banco Santander SA (STD)

It has a price/sales value of 1.46, a revenue growth of 7.6%, a quarterly earnings growth rate of 10.3%, 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. STD is trading $2.60 below book value.

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.

Total cash flow from operating activities

  • 2008= $22.3 billion
  • 2009 = -$25 billion
  • 2010 = $65.9 billion

Potential warnings

Divided was cut from $0.1373 to $0.1182

Key ratios

  • Price to tangible book 0.96
  • Price to cash flow 6.80
  • Price to free cash flow 0.80
  • Price to book 0.62
  • 5 year average PE ratio 9.4

  • ROE 10.73%
  • Return on assets 0.67%
  • Total debt $420B
  • 200 day moving average $ 8.41
  • Book value $10.62
  • Dividend yield 5 year Average 7.10%
  • Dividend rate $0.69
  • Payout ratio 75%
  • Dividend growth rate 5 year average 13.25%
  • Paying dividends since 1990
  • Total return last 3 years 22%
  • Total return last 5 year -33%

Conclusion

The markets are overbought, and the charts are indicating that a top could be place any day now. Long term dividend investors would be best served by waiting for a strong pull back before committing large sums of money to this market. There are two ways to hedge and potentially open up new streams of income. The first technique is to sell covered calls. The second technique should only be employed if you are bullish on the stock and would not mind owning it at a lower price; in this instance, investors would sell naked puts.

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. 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.

44 years, has a three-year total return of roughly 36.23%, a five-year dividend average of 4.9%, a quarterly earnings growth rate of 300%, a quarterly revenue growth rate of 7.5%, a ROE of 11.5%, and a very large levered free cash flow rate of $17.06 billion. In 2009 the dividend took a hit and dropped from 32 cents to 16 cents and even though it is now at 20 cents, it is still roughly 50% below its pre 2009 levels.

PFE per share data

  • Earnings 1.45
  • Sales 8.88
  • Cash Flow 2.62

Valuation ratios

  • Price Earnings 14.90
  • Price/Sales 2.44
  • Price/Book 1.85
  • Price/Cash Flow 8.30

Wells Fargo & Co has been paying dividends since 1939, has a three-year total return of 3.65%, a quarterly earnings growth rate of 21%, a quarterly revenue growth rate of 2.2%, a ROE of 11.74%, and a profit margin of 28.3%.

Wells Fargo & Co also sports the following ratios: price to tangible book of 1.53, price to cash flow of 9.70, price to free cash flow of 4.10 and a five-year sales growth rate of 20.3. Net income for the past three years is as follows: 2008 $2.65 billion, in 2009 it experienced a massive spike up to $12.2 billion and in 2010, it remained virtually unchanged at $12.3 billion. For 2011, net income so far stands at $12.1 billion.

Important facts investors should be aware in regards to investing in MLPs and REITs

  • Payout ratios are not that important when it comes to MLPs/REITs. Both are required by law to pay a majority of their cash flow as distributions. Payout ratios are calculated by dividing the dividend rate by the net income per share, and this is why the payout ratio for MLPs and REITS is often higher than 100%. The more important ratio to focus on 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/dividend declared per unit/share.
  • MLPs are not taxed like regular corporations because they pay out a large portion of their income to partners (as an investor you are basically a partner and are allocated units instead of shares) usually through quarterly distributions. The burden is thus shifted to the partners, who are taxed at their ordinary income rates. As ordinary income tax rates of investors are typically lower than the income tax assessed on corporations, this arrangement is advantageous to the MLPs and generally also to most investors.
  • MLPs issue a Schedule K-1 to their investors. If the MLP pays out distributions in excess of the income it generates, the distribution is classified as a "return of capital" and tax-deferred until you sell your shares or units. Income from MLPs is generally taxable even in retirement accounts like 401(k)s and IRAs if the income generated is in excess of $1,000.

Dividend investors should also familiarize themselves with the following metrics, as they could prove to be useful during the selection process.

Debt to Equity Ratio is found by dividing the company's total amount of long-term debt (debts with interest rates that have a maturity longer than one year) by the total amount of equity. A debt to equity ratio of 0.5 tells us that the company is using 50 cents of liabilities in addition to each $1 dollar of shareholders equity in the business.

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 searching for other investment ideas might find this article to be of interest 7 Stocks With Attractive Yields As High As 8.6%

Current Ratio is obtained by dividing the current assets by current liabilities. This ratio allows you to see if the company can pay its current debts without potentially jeopardising their future earnings. Ideally the company should have a ratio of 1 or higher.

The payout ratio tells us what portion of the profit is being returned to investors. A payout ratio over 100% indicates that the company is paying out more money to shareholders, then they are making; this situation cannot last forever. In general if the company has a high operating cash flow and access to capital markets, they can keep this going on for a while. As companies usually only pay the portion of the debt that is coming due and not the whole debt, this technique can technically be employed to maintain the dividend for sometime.

Turnover Ratio lets you know the number of times a company's inventory is replaced in a given time period. It is calculated by dividing the cost of goods sold by average inventory during the time period studied. A high turn over ratio indicates that a company is producing and selling its good and services very quickly.

Stock

Dividend Yield

Market Cap

Forward PE

EBITDA

Quarterly Revenue Growth

Beta

Revenue

Operating Cash flow

TCAP

9.20%

439.06M

9.16

44.55M

65.70%

0.54

55.48M

-170.11M

RAI

5.20%

23.47B

13.51

2.66B

-1.70%

0.63

8.54B

1.11B

EPD

5.4%

42.32B

21.3

3.68B

40.4%

0.53

42.3B

3.08B

NLY

14%

16.06B

7.2

N/A

N/A

0.31

1.39B

8.19B

STD

8.00%

69.14

6.4

9.65B

7.6%

1.86

41.68B

------

Click to enlarge

Triangle Capital Corp (TCAP)

Industry: Holding and other Investment Offices

It has a current ratio of 23.5 and a levered free cash flow of rate of $23.6 million.

Net income for the past three years

  • 2008= $7.6 million
  • 2009=-$4.03 million
  • 2010= $25.3 million
  • 2011= it stands at roughly $44 million and could potentially top the $61 million mark.

Total cash flow from operating activities

  • 2008= -$60.6 million
  • 2009 = -$13.3 million
  • 2010 = -$97.4 million
  • 2011= It stands at- $94.4 million and it could top the -$131 million mark.

Key Ratios

  • Price to sale 8.5
  • Price to tangible book 0
  • Price to cash flow 9.7
  • Price to free cash flow N.A.
  • 5 year sales growth N.A.
  • Inventory turnover 0
  • Asset turnover 0
  • ROE 20.22%
  • Return on assets 6.33%
  • 200 day moving average 17.44
  • Total debt 224.19M
  • Book value 14.59
  • Qtrly Earnings Growth 143.20%
  • Dividend yield 5 year Average 9.90%
  • Dividend rate $ 1.88
  • Payout ratio 90.00%
  • Dividend growth rate 3 year average 7.35%
  • Dividend growth rate 5 year average 0.00%
  • Consecutive dividend increases 0 years
  • Paying dividends since 2007
  • Total return last 3 years 106.36%
  • Total return last 5 years N/A %

Reynolds American Inc (RAI)

Industry: Tobacco Products

It has a strong levered free cash flow rate of 1.42 billion and a current ratio of 1.09

Net income for the past three years

  • 2008= $1.33 billion
  • 2009 =$962 million
  • 2010 = $1.13 billion
  • 2011= it stands at $1.024 billion and could potentially top the $1.4 billion mark.

Total cash flow from operating activities

  • 2008= $1.31 billion
  • 2009 =$1.45 billion
  • 2010 = $1.26 billion
  • 2011= It stands at roughly $841 million.

Key Ratios

  • Price to sale 16.3
  • Price to tangible book 0
  • Price to cash flow 5.4
  • Price to free cash flow 6.2
  • 5 year sales growth 1.95
  • Inventory turnover 0
  • Asset turnover 0

  • ROE 19.98%
  • Return on assets 9.36%
  • 200 day moving average 38.36
  • Total debt 3.67B
  • Book value 11.52
  • Qtrly Earnings Growth -3.70%
  • Dividend yield 5 year Average 6.10%
  • Dividend rate $ 2.24 %
  • Payout ratio 95.00%
  • Dividend growth rate 3 year average 8.33%
  • Dividend growth rate 5 year average 9.52%
  • Consecutive dividend increases 2 years
  • Paying dividends since 2004
  • Total return last 3 years 130.43%
  • Total return last 5 years 58.96%

Enterprise Products Partners LP

It has enterprise value of $57.2 billion, a quarterly revenue growth of 40.40%, a ROE of 14.55%, a five-year dividend growth rate of 6.03%, a total return of 144% for the past three years, and has been paying dividends since 1998. It has a levered free cash flow rate of -$1.01 billion and a current ratio of 0.83. Out of a possible five stars, we would assign EPD four. The dividend was raised from $0.6050 to $0.6125.

Net income for the past 3 years is as follows:

  • 2008= -$954 million
  • 2009 = $204 million
  • 2010 = $320.8 million
  • 2011= It stands at-$1.32 b illion and it could top the $1.7 billion mark.

Total cash flow from operating activities

  • 2008= $1.23 billion
  • 2009 = $2.4 billion
  • 2010 = $2.3 billion
  • 2011= It stands at- $2.24 billion and it could potentially top the $2.6-$3 billion mark.

New Developments

Enterprise Products Partners LP and Genesis Energy LP have formed an agreement to build a crude oil pipeline in the Gulf of Mexico. These two companies have made transportation agreements with six crude oil producers. The pipeline is will be roughly 149 miles long and is expected to transport 115,000 barrels of oil a day. In the 50/50 joint venture, the pipeline is expected to be operational sometime in 2014.

Key ratios

  • Price to sales 0.97
  • Price to tangible book 5.37
  • Price to cash flow 26.40
  • Price to free cash flow - 32.40
  • 5 year sales growth 23.27%
  • Inventory turnover 29.80
  • Asset turnover 1.40

  • ROE 14.55%
  • Return on assets 5.23%
  • Total debt 15.4B
  • 200 day moving average $43.43
  • Book value $13.14
  • Dividend yield 5 year Average 6.5%
  • Dividend rate $2.40
  • Payout ratio 190%
  • Dividend growth rate 5 year average 6.03%
  • Consecutive dividend increases 12 years
  • Paying dividends since 1998
  • Total return last 3 years 152%
  • Total return last 5 years 104%

Annaly Capital Management Inc (NLY)

It has a profit margin of 80.62%, a ROE of 8.73%, a five-year dividend growth rate of 40%, a five-year dividend average of 12.8%, a total return of 55% for the past three years, and has been paying dividends since 1997. It also sports a current ratio of 0.06.

The dividend was cut from 60 cents to 57 cents; the most likely reason for this is that NLY is taking action now and de leveraging its positions. It has one of the most astute management teams in the industry, and they are taking preventive action now for they feel that long-term rates may have put in a bottom.

Net income for the past three years is as follows: in 2008, it came in at $346 million, in 2009 it surged by more than 600% to $1.9 billion, and in 2010, it dropped to $1.26 billion. Net income for 2011 stands at $820 million and could potentially top the $1.27 billion mark

Total cash flow from operating activities

  • 2008= $1.1billion
  • 2009 = $10.8 billion
  • 2010 = $10.86 billion
  • 2011= It stands at $2.4 billion.

Key ratios

  • Price to sales 6.85
  • Price to tangible book 0.99
  • Price to cash flow 14.20
  • Price to free cash flow 2.50
  • 5 year sales growth 14.76%
  • Inventory turnover N/A
  • Asset turnover 0.0

  • ROE 8.73%
  • Return on assets 1.14%
  • 200 day moving average $ 17.07
  • Total debt $90.5B
  • Book value $16.91
  • Dividend yield 5 year Average 12.80%
  • Dividend rate $2.44
  • Dividend pay out ratio 120%
  • Dividend growth rate 5 year average 40.2%
  • Consecutive dividend increases 0 years
  • Paying dividends since 1997
  • Total return last 3 years 58%
  • Total return last 5 years 97%

Banco Santander SA (STD)

It has a price/sales value of 1.46, a revenue growth of 7.6%, a quarterly earnings growth rate of 10.3%, 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. STD is trading $2.60 below book value.

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.

Total cash flow from operating activities

  • 2008= $22.3 billion
  • 2009 = -$25 billion
  • 2010 = $65.9 billion

Potential warnings

Divided was cut from $0.1373 to $0.1182

Key ratios

  • Price to tangible book 0.96
  • Price to cash flow 6.80
  • Price to free cash flow 0.80
  • Price to book 0.62
  • 5 year average PE ratio 9.4

  • ROE 10.73%
  • Return on assets 0.67%
  • Total debt $420B
  • 200 day moving average $ 8.41
  • Book value $10.62
  • Dividend yield 5 year Average 7.10%
  • Dividend rate $0.69
  • Payout ratio 75%
  • Dividend growth rate 5 year average 13.25%
  • Paying dividends since 1990
  • Total return last 3 years 22%
  • Total return last 5 year -33%

Conclusion

The markets are overbought, and the charts are indicating that a top could be place any day now. Long term dividend investors would be best served by waiting for a strong pull back before committing large sums of money to this market. There are two ways to hedge and potentially open up new streams of income. The first technique is to sell covered calls. The second technique should only be employed if you are bullish on the stock and would not mind owning it at a lower price; in this instance, investors would sell naked puts.

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. 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.