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Our two favorite plays on this list are NuStar Energy L.P. (NYSE:NS) and Philip Morris International In (NYSE:PM) with yields of 7.6% and 3.8% respectively.

NS has an enterprise value of $6.26 billion, a quarterly revenue growth rate of 60%, a quarterly earnings growth rate of 2.7%, a ROE of 9.32%, a five-year distribution growth rate of 4.19%, a total three-year return of 62%, and has been paying dividends/distributions since 2001. It has a levered free cash flow rate of $49.9 million and a current ratio of 1.22. After dipping briefly in 2009, net income is on the rise again. Out of a possible five stars we would assign NS four stars.

PM has an enterprise value of $143.8 billion, a quarterly revenue growth rate of 26.4%, a quarterly earnings growth rate of 30.5%, a ROE of 178%, a three-year dividend growth rate of 23.2%, a total three-year return of 97%, and has been paying dividends/distributions since 2008. It has a levered free cash flow rate of $9.62 billion and a current ratio of 0.94. Net income has risen for 3 years in a row and is on course to increase for the 4th year in a row.

Investors should understand the following metrics as it could help with the selection process.

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

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.

Price to sales ratio is calculated by dividing the company's share price by its revenue per share. Generally, the smaller the ratio (less than 1.0) the better the investment since the investor is paying less for each unit of sales. However, there are exceptions as a company with a low price to sales ratio could be unprofitable. It is sometimes used to determine the relative valuation of a sector.

Price to cash flow ratio is obtained by dividing the share price by cash flow per share. It is a measure of the market's expectations of a company's future financial health. The effects of depreciation and other non cash factors are removed, and this makes it easier for investors to assess foreign companies in the same industry. This ratio also provides a measure of relative value like the price to earning's ratio.

Price to free cash flow is obtained by dividing the share price by free cash flow per share. Higher ratios are associated with more expensive companies and vice versa; lower ratios are generally more attractive. If a company generated 400 million in cash flow and then spent 100 million on capital expenditure, then its free flow is $300 million. If the share price is 100 and the free cash flow per share are $5, then company trades at 20 times-free cash flow. This ratio is also useful because it can be used as a comparison to the average within the industry; this gives you an idea of how the company you are interested in holds up to other companies within the industry.

The payout ratio tells us what portion of the profit is being returned to investors. A pay out 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/trick can technically be employed to maintain the dividend for sometime. If the payout ratio continues to increase, the situation warrants close monitoring as this cannot last forever; if your tolerance for risk is a low, look for similar companies with the same or higher yields, but with lower payout ratios

Three other notable plays are Chimera Investment Corporation (NYSE:CIM), Martin Midstream Partners L.P. (NASDAQ:MMLP) and Vector Group Ltd. (NYSE:VGR) with yields of 15.10%,8.4%and 9.1 % respectively.

Chimera Investment Corporation has a quarterly revenue growth rate of -37%, a ROE of 17%, a three-year dividend growth rate of 1.24%, a total three-year return of 54%, and has been paying dividends since 2007.

Net income for the past three years

2008= -$119 million

2009= $322.9 million

2010= $532.8 million

2011= it stands at $371.96 million and could top the $461 million mark.

Total cash flow from operating activities

2008= $30.6 million

2009 =$168.6 million

2010 = -$305.5 million

2011= It stands at $337.9 million and could top the $457 million mark.

Potential warning signs

The dividend has been cut from $0.13 to $0.11 and it sports a negative quarterly revenue growth of -37%. On the positive side net income has been increasing for the past 3 years.

MMLP has an enterprise value of $1.01 billion, a quarterly earning's growth rate of 16.5%, a quarterly revenue growth of 61.90%, a ROE of 9.6%, a five-year dividend growth rate of 4.6%, and the total three-year return of 127%. It has a levered free cash flow rate of -$22.69 million and a current ratio of 1.26.

Net income for the past three years is as follows:

2008= $42 million

2009 = $22 million

2010= $16 million.

2011= it stands at $21.3 million; total net income for 2011 could top the $26-$29 million ranges.

Profitability ratios

  1. Gross Margin 22.00
  2. Gross Margin 5 Yr Average 21.70
  3. EBITD Margin 8.20
  4. EBITD - Yr Average 12.34
  5. Pre-Tax Margin 2.50
  6. Pre-Tax Margin 5 Yr Average 3.20

VGR has an enterprise value of $1.52 Billion, a quarterly earning's growth rate of 60.9%, a five year EPS growth of 5.28%, a total three-year return of 93%, a EPS of 0.94, cash flow per share of11.18, price/sales of 1.24, and a price/cash flow of 14.90. VGR also has a levered free cash flow rate of 58.19 million. Out of a possible five stars, we would assign VGR 4 stars. The dividend was increased from $0.3809 to $.4000

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.

Key ratios

  1. Price to tangible book - 7.98
  2. Price to cash flow 14.90
  3. Price to free cash flow -11.10
  4. 5 year sales growth 19.45
  5. Inventory turnover 8.20
  6. Asset turnover 1.20

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

  1. 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.
  2. 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 most investors.
  1. 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 401KS and IRAs if the income generated is in excess of $1000.

Stock

Dividend Yield

Market Cap

Forward PE

EBITDA

Quarterly Revenue Growth

Beta

Revenue

Operating Cash flow

PM

3.80%

129.44B

14.39

14.22B

26.40%

0.93

30.46B

11.15B

CIG

8.50%

13.41B

12.44

2.91B

10.70%

0.66

8.04B

2.06B

NS

7.61%

3.73

17

500.03M

60.3%

0.47

5.84B

283.5M

FLY

6.10%

337.83M

7.89

169.48M

-8.40%

1.92

201.38M

113.65M

Philip Morris International (PM)

Industry: Tobacco Products

Net income for the past three years

2008 = 6.89 billion

2009 = 6.34 billion

2010 = 7.25 billion

Total cash flow from operating activities

2008 = 7.935 billion

2009 = 7.884 billion

2010 = 9.437 billion

Key Ratios

  1. P/E Ratio 15.8
  2. P/E High - Last 5 Yrs N.A.
  3. P/E Low - Last 5 Yrs N.A.
  4. Price to Sales 4.25
  5. Price to Book6 0.77
  6. Price to Tangible Book -11.03
  7. Price to Cash Flow 13.7
  8. Price to Free Cash Flow 23
  9. Quick Ratio 0.4
  10. Current Ratio 0.9
  11. LT Debt to Equity 6.04
  12. Total Debt to Equity 8.34
  13. Interest Coverage 15.5
  14. Inventory Turnover 1.2
  15. Asset Turnover 0.8

  1. ROE 178.87%
  2. Return on Assets 22.62%
  3. 200 day moving average70.54
  4. Current Ratio 0.94
  5. Total debt 17.76B
  6. Book value1.22
  7. Qtrly Earnings Growth 30.50%
  8. Dividend yield 5 year average 0.00%
  9. Dividend rate $3.08 %
  10. Payout ratio 60.00%
  11. Dividend growth rate 3 year average 23.2%
  12. Dividend growth rate 5 year average ----
  13. Consecutive dividend increases 3 years
  14. Paying dividends since 2008
  15. Total return last 3 years 97.73%
  16. Total return last 5 years N/A %

Companhia Energetica de Minas (NYSE:CIG)

Industry: Electric Utilities

Net income for the past three years

2008 = 752 million

2009 = 1.26 billion

2010 = 1.36 billion

Total cash flow from operating activities

2008 = 1.27 billion

2009 = 1.47 billion

2010 = 2.08 billion

Key Ratios

  1. P/E Ratio 7.1
  2. P/E High - Last 5 Yrs 26.9
  3. P/E Low - Last 5 Yrs 4.9
  4. Price to Sales 2.19
  5. Price to Book 1.9
  6. Price to Tangible Book 3.37
  7. Price to Cash Flow 7.8
  8. Price to Free Cash Flow -668
  9. Quick Ratio 0.9
  10. Current Ratio 1.2
  11. LT Debt to Equity 0.78
  12. Total Debt to Equity 1.07
  13. Interest Coverage N.A.
  14. Inventory Turnover N.A.
  15. Asset Turnover 0

  1. ROE 19.26%
  2. Return on Assets7.67%
  3. 200 day moving average17.48
  4. Current Ratio1.19
  5. Total debt7.98B
  6. Book value10.92
  7. Qtrly Earnings Growth-0.40%
  8. Dividend yield 5 year average5.50%
  9. Dividend rate$ 1.08
  10. Payout ratio 58%
  11. Dividend growth rate 3 year average46.08%
  12. Dividend growth rate 5 year average17.49%
  13. Consecutive dividend increases0 years
  14. Total return last 3 years143.83%
  15. Total return last 5 years 128.22%

NuStar Energy L.P.

It has an enterprise value of $6.24 billion, a quarterly revenue growth rate of 60%, a quarterly earnings growth rate of 2.7%, a ROE of 9.32%, a five-year distribution growth rate of 4.19%, a total three-year return of 62%, and has been paying dividends/distributions since 2001. It has a levered free cash flow rate of $49.9 million and a current ratio of 1.22

Net income for the past three years

2008 = 254 million

2009 = 224 million

2010 = 238 million

2011= It stands roughly at $191 million and could potentially top the $260 million mark.

Total cash flow from operating activities

2008 = 485 million

2009 = 180.6 million

2010 = 362.5 million

Key ratios

  1. Price to tangible book 2.26
  2. Price to sales 0.63
  3. Price to cash flow 9.30
  4. Price to free cash flow -8.30
  5. 5 year sales growth 37.8%
  6. Inventory turnover 6.10
  7. Asset turnover 1.10

  1. ROE 9.32%
  2. Return on assets 3.8%
  3. 200 day moving average $57.28
  4. Total debt $2.97B
  5. Book value $37.98
  6. Dividend yield 5 year Average 7.30%
  7. Dividend rate $4.34
  8. Payout ratio 138%
  9. Dividend growth rate 5 year average 4.19%
  10. Consecutive dividend increases 10 years
  11. Paying dividends since 2001
  12. Total return last 3 years 62%
  13. Total return last 5 years 39%

Fly Leasing Ltd. (NYSE:FLY)

Industry: Airlines/Air Freight

Net income for the past three years

2008 = 6.89 billion

2009 = 6.34 billion

2010 = 7.25 billion

Total cash flow from operating activities

2008 = 7.935 billion

2009 = 7.884 billion

2010 = 9.437 billion

Key ratios

  1. Price to tangible book .75
  2. Price to sales 1.67
  3. Price to cash flow 2.80
  4. Price to free cash flow 37.00
  5. 5 year sales growth N/A
  6. Inventory turnover N/A
  7. Asset turnover 0.10

  1. ROE 4.66%
  2. Return on assets 2.68%
  3. 200 day moving average $12.04
  4. Qrtly earnings growth -72%
  5. Total debt $1.35B
  6. Book value $17.52
  7. Dividend yield 5 year Average N/A
  8. Dividend rate $0.80
  9. Payout ratio 101%
  10. Dividend growth rate 5 year average N/A
  11. Consecutive dividend increases 0 years
  12. Paying dividends since 2008
  13. Total return last 3 years 196%
  14. Total return last 5 years N/A

Conclusion

The markets remain overbought, and long term dividend investors should wait for more opportune moments before committing large sums of money to this market. The most astute investors usually wait for strong pullbacks before deploying large sums of money into stocks. This is a general rule as there are times when a great stock can pull back while the market is trending higher and in such instances, it would be fine to take a long term position.

All charts were sourced from dividata.com

Source: 7 Dividend Stocks With Yields As High As 15%

Additional disclosure: 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. 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