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A lot of ratios will be used in this article, and it would be best for investors to get a handle on some of these ratios as they could prove to be very useful in the selection process. Some of the more important key ratios are listed below.

Stock

Dividend Yield (%)

Enterprise Value

Forward PE

EBITDA

Quarterly Revenue Growth

Beta

Revenue

Operating Cash flow

IVR

15.3%

14.41B

5.9

362M

91%

0.86

386M

231.42M

NCMI

6.00

1.57B

21.37

211.50M

8.20%

0.81

438.90M

152.10M

SJW

3.00

764.72M

18.13

75.40M

5.10%

0.59

227.37M

53.01M

AZN

8.60

7.17

15.02B

0.50%

0.60

33.59B

7.82B

AZN

VIP

12.40

41.91B

9.77

7.19B

115.70%

0.00

17.18B

5.00B

Long-term debt-to-equity ratio is the total long term debt divided by the total equity. The amount of long-term debt a company carries on its balances sheet is very important for it indicates the amount of money a company owes that it doesn't expect to pay off in the next year. A balance sheet that illustrates that long term debt has been decreasing for a few years is a sign that the company is doing well. When debt levels fall, and cash levels increase the balance sheet is said to be improving and vice versa. If a company has too much debt on its books, it could end up being overwhelmed with interest payments and risk having too little working capital which could in the worst case scenario lead to bankruptcy.

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.

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/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 low, look for similar companies with the same or higher yields, but with lower payout ratios. Individuals searching for other ideas might find this article to be of interest: Is Potash Corp. Of Saskatchewan A Good Long-Term Dividend play.

Interest coverage is usually calculated by dividing the earnings before interest and taxes for a period of one year by the interest expenses for the same time period. This ratio informs you of a company's ability to make its interest payments on its outstanding debt. Lower interest coverage ratios indicate that there is a larger debt burden on the company and vice versa. For example if a company has an interest ratio of 11.8, this means that it covers interest expenses 11.8 times with operating profits.

Inventory turnover is calculated by dividing sales by inventory. If a company generated $30 million in sales and had an average inventory of $6 million; the inventory turn over would be equal to 5. This value indicates that there are five inventory turnovers per year. This means that it takes roughly 2.4 months to sell the inventory. A low inventory turnover is a sign of inefficiency and vice versa.

Price to tangible book is obtained by dividing share price by tangible book value per share. The ratio gives investors some idea of whether they are paying too much for what would be left over if the company were to declare bankruptcy immediately. In general stocks that trade at higher price to tangible book value could leave investors facing a great percentage per share loss than those that trade at lower ratios. The price to tangible book value is theoretically the lowest possible price the stock would trade to Quick ratio or acid -test is obtained by adding cash and cash equivalents plus marketable securities and accounts receivable dividing them by current liabilities. It is a measure of a company's ability to use its quick assets (assets that can be sold of immediately at close to book value) to pay off its current liabilities immediately. A company with a quick ratio of less than 1 cannot pay back its current liabilities. Additional key metrics are addressed in this article: Linn Energy: A Long-Term Independent Oil And Gas Dividend play.

SJW Corp. (NYSE:SJW) is our favorite play on this list for the following reasons:

Net income has generally been trending upwards for the past few years.

It has a low payout ratio of 57.7%.

It has stellar history of consecutively increasing its dividend; 44 years and rising.

Earnings for 2012 are projected to come in at $1.04 and then rise to $1.35 in 2013.

It has a good quick and current ratio of 2.28 and 2.31 respectively.

100K invested for 10 years would have grown to 207K.

Invesco Mortgage Capital Inc. (NYSE:IVR)

Industry: REITs

Net income for the past three years

2009 = $15.1 million

2010 = $98.4 million

2011= it stands at $207 million and could come in as high as $288 million

Total cash flow from operating activities

1900 = $0 million

2009 = $11.48 million

2010 = $71.53 million

Key Ratios

P/E Ratio = 4.1

P/E High - Last 5 Yrs = N.A.

P/E Low - Last 5 Yrs = N.A.

Price to Sales = 4.68

Price to Book = 0.95

Price to Tangible Book = 0.95

Price to Cash Flow = 7.4

Price to Free Cash Flow = 60.6

Quick Ratio = N.A.

Current Ratio = N.A.

LT Debt to Equity = N/A

Total Debt to Equity = N/A

Interest Coverage = 3.2

Inventory Turnover = N.A.

Asset Turnover = 0

ROE = 19.32%

Return on Assets = 2.78%

Total debt = 12.65B

Book value = 16.40

Qtrly Earnings Growth = 91%

Dividend yield 5 year average = 0%

Dividend rate = $ 3.42

Payout ratio = 89%

Paying dividends since = 2009

Notes

The divided was cut from 80 cents to 65 cents. On the positive side net income has been trending upwards strongly and at 15% it pays a rather strong yield. As the stock has taken a beating the risk to the downside appears to be limited; the worst news is most likely already priced in.

National CineMedia Inc (NASDAQ:NCMI)

Industry : Advertising

Levered Free Cash Flow : 97.03M

Net income for the past three years

Net Income ($mil) 2009 = $26

Net Income ($mil) 2010 = $29

Net Income ($mil) 2011 = $N/A

Total cash flow from operating activities

2009 = $124.5 million

2009 = $138.3 million

2010 = $143.7 million

Key Ratios

P/E Ratio = 23.3

P/E High - Last 5 Yrs = N.A.

P/E Low - Last 5 Yrs = N.A.

Price to Sales = 1.84

Price to Book = N/A

Price to Tangible Book = -1.19

Price to Cash Flow = 11.99

Price to Free Cash Flow = 106.4

Quick Ratio = 1.69

Current Ratio = 1.50

Total Debt to Equity = -2.24

Interest Coverage = 1.90

Inventory Turnover = N/A

Asset Turnover = 0.54

ROE = N/A%

Return on Assets = 4.5%

Qtrly Earnings Growth = 42.4%

Dividend yield 5 year average = 4.07%

Payout ratio = 145%

Dividend growth rate 3 year avg = 10.8%

Dividend growth rate 5 year avg = 9.77%

Consecutive dividend increases = 4 years

Paying dividends since = 2007

Total return last 3 years = 56.67%

Total return last 5 years = -35.2%

Notes

It has a positive levered free cash flow of $97 million, a decent quick ratio of 1.69, and an acceptable interest coverage ratio of 1.90. It also sports a good five year average dividend growth rate of 9.77% and a total three-year return of 56%. On the negative side, the payout ratio is too high for our liking.

SJW Corp.

Industry: Water Utilities

Levered Free Cash Flow: -54.78M

Net income for the past three years

Net income ($mil) 2008 = $21.4

Net Income ($mil) 2009 = $15

Net Income ($mil) 2010 = $24

Net Income ($mil) 2011 = $N/A

Total cash flow from operating activities

2008 = $51.8 million

2009 = $54.55 million

2010 = $37.17 million

Key Ratios

P/E Ratio = 19.7

P/E High - Last 5 Yrs = 41.3

P/E Low - Last 5 Yrs = 10.6

Price to Sales = 1.91

Price to Book = 1.75

Price to Tangible Book = 1.67

Price to Cash Flow = 10.33

Price to Free Cash Flow = -9.3

Quick Ratio = 2.28

Current Ratio = 2.31

LT Debt to Equity = 1.32

Total Debt to Equity = 1.32

Interest Coverage = 2.70

Inventory Turnover = 94.49

Asset Turnover = 0.24

ROE = 6.34%

Return on Assets = 1.66%

Qtrly Earnings Growth = -23.8%

Dividend yield 5 year average = 2.51%

Payout ratio = 57.7%

Dividend growth rate 3 year avg = 2.32%

Dividend growth rate 5 year avg = 3.09%

Consecutive dividend increases = 44 years

Total return last 3 years = 6.07%

Total return last 5 years = -24.93%

AstraZeneca Plc (NYSE:AZN)

Industry: Pharmaceuticals

Levered Free Cash Flow: $6.22B

Net income for the past three years

2008 = $6.13 billion

2009 = $7.55 billion

2010 = $8.09 billion

Total cash flow from operating activities

2008 = $8.75 billion

2009 = $11.74 billion

2010 = $10.68 billion

Key Ratios

P/E Ratio = 6.2

P/E High - Last 5 Yrs = 15.9

P/E Low - Last 5 Yrs = 5.6

Price to Sales = 1.78

Price to Book = 2.5

Price to Tangible Book = 24.92

Price to Cash Flow = 4.6

Price to Free Cash Flow = 11.6

Quick Ratio = 1.4

Current Ratio = 1.5

LT Debt to Equity = 0.31

Total Debt to Equity = 0.39

Interest Coverage = 13.5

Inventory Turnover = 1.7

Asset Turnover = 0.6

ROE = 42.73%

Return on Assets = 14.94%

Total debt = 9.34B

Book value = 17.99

Qtrly Earnings Growth = -8.3%

Dividend yield 5 year average = 5.4%

Dividend rate = $ 2.80

Payout ratio = 37%

Dividend growth rate 3 year avg = 10.96%

Dividend growth rate 5 year avg = 12.71%

Consecutive dividend increases = 9 years

Paying dividends since = 1993

Total return last 3 years = 42.93%

Total return last 5 years = -1.32%

Notes

Net income and operating cash flow is generally trending upwards for the past few years. It has a very strong levered free cash flow of $6.22 billion, a decent quick ratio of 1.4, a very good LT debt to equity of 0.31, and a good interest coverage ratio of 13.5. It also sports a decent five-year dividend average of 5.4%, a five year dividend growth rate of 12.71% and has consecutively increased dividends for nine years in a row. AZN is a good long term play.

VimpelCom Ltd. (NASDAQ:VIP)

Levered Free Cash Flow: 1.82B

Net income for the past three years

2009 = $1.13 billion

2010 = $1.68 billion

Total cash flow from operating activities

2009 = $3.52 billion

2010 = $3.68 billion

Key Ratios

P/E Ratio = 11

P/E High - Last 5 Yrs = N.A.

P/E Low - Last 5 Yrs = N.A.

Price to Sales = 1.07

Price to Book = 1.2

Price to Tangible Book = -1.41

Price to Cash Flow = 2.8

Price to Free Cash Flow = -33.70

Quick Ratio = 0.7

Current Ratio = 1.1

LT Debt to Equity = 1.6

Total Debt to Equity = 1.71

Interest Coverage = 2.2

Inventory Turnover = 19

Asset Turnover = 0.4

ROE = 9.75%

Return on Assets = 5.85%

Total debt = 26.00B

Book value = 9.41

Qtrly Earnings Growth = -79%

Dividend rate = $ 0.84

Payout ratio = 70%

Consecutive dividend increases = 1 years

Paying dividends since = 2010

Total return last 3 years = N/A

Total return last 5 years = N/A

Notes

Its quarterly earnings growth has taken a beating (-79%), and dividend history is short and erratic. Only individuals willing to take on extra risk should consider this play. On the positive side, it has a very strong levered free cash flow of $1.82 billion, and earnings are projected to rise in 2013. This could prove to be a good play for individuals willing to take on some risk.

Conclusion

It is our view that investors would be best served now by waiting for the markets to pull back strongly. The markets are extremely overbought on the short to intermediate time frames, and a healthy pullback could provide the market with the impetus to trade significantly higher in the months to come.

Earnings and growth estimate charts sourced from dailyfinance.com, dividend history charts sourced from dividata.com and free cash flow charts sourced from ycharts.com

Source: 5 Interesting Plays With Strong Yields

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 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.