Investors like high dividend stocks - they help offset losses or boost returns and can even be used as a source of income if they are stable enough. Between 1927 and 2009, high dividend stocks on average returned 13.04%, beating the market by 1.36% per year.
However, if companies don't grow, or the stocks themselves don't otherwise produce consistent returns, then all those dividends will count for nothing. High growth stocks tend to lose more than the market during recessions, but quickly rebound when the economy recovers. Since we hold a positive outlook for the stock market in 2012, the best time to buy high growth stocks is right now.
We compiled a list of 9 large cap dividend stocks with high earnings growth. They each offer more than 5% dividend yield and their earnings are expected to grow at more than 10% annually over the long term.
EPS growth next 5 years
Health Care REIT, Inc.
Mobile Telesystems OJSC
Koninklijke Philips Electronics NV
Southern Copper Corp.
Companhia Siderurgica Nacional
1. Health Care REIT, Inc. is a real estate investment trust which focuses on senior housing and healthcare real estate. The company has a market cap of more than $10 billion and a dividend yield of 5.19%. Its EPS is expected to grow at 11% annually over the next five years. Over the last year, HCN has returned 20.38%. Jason Gottlieb's Visium Asset Management and Israel Englander's Millennium Management are fans of HCN.
2. Mobile Telesystems OJSC is a Russian telecommunication company that offers mobile and telecommunication services. It has a market cap of $16 billion and offers a 6.36% dividend yield. It has an expected EPS growth rate of 13.7%. MBT lost 29% in the past year. Hugh Sloane, John Kleinheinz, and Jim Simons each own significant positions in the company.
3. Koninklijke Philips Electronics NV is the parent company of Philips, which offers a range of healthcare, lifestyle and lighting products. PHG has a market cap of nearly $20 billion and pays a dividend yield of 5.65%. Its EPS is expected to grow at 22.6% over the long term. Mason Hawkins has more than 23 million shares of PHG, according to his latest filing.
4. Southern Copper Corp. is a copper producer which also produces molybdenum, zinc and silver. The company has a market cap of $30 billion and has a dividend yield of 6.84%. It also has an expected EPS growth rate of nearly 11%. SCCO lost 34% in the year 2011. John Burbank had more than 1 million shares of SCCO in the third quarter. Ken Fisher and Jim Simons also invested in SCCO last year.
5. SeaDrill Ltd.: Based in Bermuda, SeaDrill is an oil & gas company that focuses on oil & gas drilling operations. It has a nearly $17 billion market cap and a dividend yield of 8.49%. Its EPS is expected to grow every year at 10.2%. SDRL managed to beat the S&P 500 in terms of return, advancing 8% over the past year. Bain Capital's Brookside Capital revealed a position of 1.44 million shares of SDRL last year, according to the firm's Q3 filing.
6. Companhia Siderurgica Nacional is a steel producer which engages in mining, steel production, logistics, cement and energy operations. The company has a market cap of $15 billion. It has a dividend yield of 6.11% and an expected EPS growth rate of 14%. SID lost a whopping 47% last year. Noam Gottesman, Howard Marks, and Jim Simons are invested in SID.
7. Banco Santander, S.A. offers a range of financial products to European countries, Latin American countries and the United States. It has a market cap of $66 billion, a dividend yield of 11% and an expected EPS growth rate of 12.4%. The stock lost 23% in 2011. Ken Fisher was a huge fan of STD last year, and he had nearly 29 million shares of STD at the end of September. Jim Simons and Bruce Berkowitz picked STD during the third quarter, each initiating a new position.
8. Verizon Communications Inc. is a communications services company that provides wireless and wire line products. It has a market cap of about $109 billion and offers a dividend yield of 5.21%. Its EPS is expected to grow at 10.58% over the long run. Verizon gained 19% last year and was in many hedge fund portfolios, including Cliff Asness, D. E. Shaw, George Soros, and Steven Cohen.
9. YPF S.A. is an oil and gas company that engages in oil and gas exploration, production and refining. It has a market cap of $16 billion and a dividend yield of 8.25%. Its EPS is expected to grow at 15.36%. YPF lost 25% over the past year. Eric Mindich had 9.78 million ADRs in YPF during Q3. Jim Simons, George Soros, and Clint Carlson also invested in the stock.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.