We found three high dividend stocks, from 3 different sectors, industries, and countries - all with a common thread - strong growth this past year, past quarter, and strong growth forecast for their next fiscal year. This trio consists of a large cap, mid-cap, and a small cap, all of whom are listed in our High-Dividend Stocks By Sector tables:
Growth & Valuations: All 3 firms had strong growth in their most recent fiscal years, and quarters. Growth for next fiscal year is also projected to be good, and, both City Telecom (CTEL), and Nucor (NUE) have low PEG valuations vs. next year's growth.
BGS Foods (BGS) has had a 69% price gain over the past 12 months, and is trading near the high end of its P/E range. CTEL is closer to its 5-year P/E low of 6.21 than its high 5-year high P/E of 39.65. NUE is also in the low end of its 5-year P/E range, which was very wide: 7.72 to 104.86. All 3 of these dividend stocks currently have above-average Price/Book ratios for their industries.
Dividends: NUE is a member of the Dividend Aristocrats, and has increased its dividends every year for the past 27 years. CTEL pays semi-annual dividends, and had ex-dividend dates in May and December in 2011, with equal payments of $0.386/share, a 53% increase over 2010's dividend. BGS increased its dividend from $0.21 to $0.23 in 2011.
Covered Calls: All 3 of these stocks have options available, which offer an opportunity to improve upon your dividend yields and improve your cash flow.
The options listed in the 2 tables below have the following expiration months:
- BGS: August
- CTEL: September
- NUE: July
As is often the case, these stocks' options offer much higher, short-term payouts than their dividends do. NUE has the juiciest call options payouts, which pay over 5 times the dividend payouts in this 5-month trade listed below. BGS's covered call options pay over 3 times more than its dividends pay over the next 6 months.
(You can see many more details for these and over 30 other trades in our Covered Calls table.)
Cash Secured Puts: Selling cash secured put options is another options strategy that also has high yield, quick cash payouts, such as those listed below. The put options for NUE outpay the quarterly dividends by over 7 to 1 in this 5-month trade.
The annualized yields below are based upon a 100% Cash Reserve, which is the amount your broker will set aside in your account when you sell put options. This amount equals 100 shares times the Put Strike Price. We covered more of the specifics of put selling in last week's article.
You can find more details on these and over 30 other Cash Secured Puts trades in our Cash Secured Puts table.
Financials: Although Nucor's mgt. ratios look lower than the other 2 firms, they're actually much better than its industry peers. Nucor also states on its website that its "5-year 371% return to shareholders beats all other S&P 500 firms". CTEL's ratios dwarf its industry peers, plus it's debt-free, and BGS has a superior ROE and in-line ROA and ROI to its peers.
Performance & Technical Data: All 3 stocks are far above their 52-week lows, but CTEL and NUE are actually down vs. 1 year ago, even though they greatly improved their earnings.
However, CTEL and NUE have been among the best stocks to buy in 2012 for price gains so far:
B&G Foods and its subsidiaries manufacture, sell and distribute a diversified portfolio of high-quality, shelf-stable foods across the United States, Canada and Puerto Rico. B&G Foods' products include hot cereals, fruit spreads, canned meats and beans, spices, seasonings, marinades, hot sauces, wine vinegar, maple syrup, molasses, salad dressings, Mexican-style sauces, taco shells and kits, salsas, pickles and peppers and other specialty food products. B&G Foods competes in the retail grocery, food service, specialty store, private label, club and mass merchandiser channels of distribution. Based in Parsippany, New Jersey, B&G Foods' products are marketed under many recognized brands, including Ac'cent, B&G, B&M, Brer Rabbit, Cream of Rice, Cream of Wheat, Don Pepino, Emeril's, Grandma's Molasses, Joan of Arc, Las Palmas, Maple Grove Farms of Vermont, Ortega, Polaner, Red Devil, Regina, San Del, Sa-són Ac'cent, Sclafani, Trappey's, Underwood, Vermont Maid and Wright's. (Source: B&G Website)
CTEL: Established in 1992, City Telecom (H.K.) Limited provides integrated telecommunications services in Hong Kong via its own self-built fibre network. City Telecom's wholly-owned subsidiary, Hong Kong Broadband Network Limited (HKBN), is the fastest growing broadband service provider in Hong Kong. HKBN offers a diversified portfolio of innovative products that service over 1,240,000 subscriptions for broadband, local telephony and IP-TV services. CTI participated in the investment for construction of submarine cables, including Japan-US Cable to connect the US and Japan across the Pacific Ocean, as well as Asia Pacific Cable Network 2, connecting us to eight districts in Asia and allows direct connection with the major fixed network operators in China. (Source: City Telecom website)
NUE: Founded in 1940, Nucor is the largest steel producer in the US, and is the largest recycler of scrap steel in the world. Nucor produces many steel products, such as structural steel, sheet steel, plate steel, cold finished steel, and wire mesh, and also acts as a raw materials broker in the steel industry. (Source: Nucor Corp. website)
Disclosure: Author is long BGS and short BGS call options.
Disclaimer: This article is written for informational purposes only and isn't intended as investment advice.