5 Attractive Dividend Candidates To Think About

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Includes: AA, BIDU, FCX, SCCO, TCPTF
by: Tactical Investor

"You are the only person on earth who can use your ability."

Zig Ziglar

Only stocks that met the following criteria were included in this list. Novice investors would be wise to focus on the following criteria instead of obsessing on the yield factor only. High yields are generally not associated with safe long-term investors, and unusually high yields are usually a sign that all is not well with the company.

  1. Net income should be trending upwards for the past 3 years.
  2. EBITDA has to be trending up for the past 3 years.
  3. Cash flow per share should be rising for the past 3 years.
  4. EPS has to be trending upwards for the past 3 years.
  5. Sales should be trending upwards for the past 3 years.
  6. In general the payout ratio should be below 100%.
  7. A 3-5 year projected EPS growth rate of at least 6%.
  8. If the company has a positive levered free cash flow, it should be viewed as "icing on the cake."

Company: Southern Copper (NYSE:SCCO)

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Basic Key ratios

  1. Percentage Held by Insiders = 0.05
  2. Relative Strength 52 weeks = 46
  3. Dividend 5-year Growth = 0.04
  4. Cash Flow 5 -year Average = 2.22
  5. Dividend Yield 5-Year Average = 5.81

Growth

  1. Net Income ($mil) 12/2011 = 2336
  2. Net Income ($mil) 12/2010 = 1554
  3. Net Income ($mil) 12/2009 = 929
  4. 12months Net Income this Quarterly/12 months Net Income 4Q's ago = 50.35
  5. Quarterly Net Income this Quarterly/same Quarter year ago = 9.1
  1. EBITDA ($mil) 12/2011 = 3923
  2. EBITDA ($mil) 12/2010 = 2873
  3. EBITDA ($mil) 12/2009 = 1776
  4. Net Income Reported Quarterlytr ($mil) = 537
  5. Annual Net Income this Yr/ Net Income last Yr = 50.34
  6. Cash Flow ($/share) 12/2011 = 3.09
  7. Cash Flow ($/share) 12/2010 = 2.14
  8. Cash Flow ($/share) 12/2009 = 1.4
  1. Sales ($mil) 12/2011 = 3193
  2. Sales ($mil) 12/2010 = 5150
  3. Sales ($mil) 12/2009 = 3734
  1. Annual EPS before NRI 12/2007 = 2.48
  2. Annual EPS before NRI 12/2008 = 1.58
  3. Annual EPS before NRI 12/2009 = 1.08
  4. Annual EPS before NRI 12/2010 = 1.81
  5. Annual EPS before NRI 12/2011 = 2.76

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Dividend history

  1. Dividend Yield = 2.42
  2. Dividend Yield 5 Year Average 12/2011 = 5.81
  3. Dividend Yield 5 Year Average 09/2011 = 5.81
  4. Annual Dividend 12/2011 = 2.43
  5. Annual Dividend 12/2010 = 2.09
  6. Forward Yield = 2.42
  7. Dividend 5 year Growth 12/2011 = 0.04

Dividend sustainability

  1. Payout Ratio 06/2011 = 1.01
  2. Payout Ratio 5 Year Average 12/2011 = 0.87
  3. Payout Ratio 5 Year Average 09/2011 = 0.87
  4. Payout Ratio 5 Year Average 06/2011 = 0.87
  5. Change in Payout Ratio = 0.14

Performance

  1. Percentage Change Price 52 Weeks Relative to S&P 500 = -16.61
  2. Next 3-5 Year Estimate EPS Growth rate = 17.58
  3. EPS Growth Quarterly(1)/Q(-3) = -115.51
  4. ROE 5 Year Average 12/2011 = 42.76
  5. ROE 5 Year Average 09/2011 = 42.76
  6. ROE 5 Year Average 06/2011 = 43.71
  7. Return on Investment 06/2011 = 34.47
  8. Debt/Total Cap 5 Year Average 12/2011 = 31.24
  9. Debt/Total Cap 5 Year Average 09/2011 = 31.24
  10. Debt/Total Cap 5 Year Average 06/2011 = 31.14
  1. Current Ratio 06/2011 = 3.12
  2. Current Ratio 5 Year Average = 3.5
  3. Quick Ratio = 2.47
  4. Cash Ratio = 1.58
  5. Interest Coverage Quarterly = 19.38

Valuation

  1. Book Value Quarterly = 4.75
  2. Price/ Book = 6.61
  3. Price/ Cash Flow = 10.17
  4. Price/ Sales = 3.92
  5. EV/EBITDA 12 Mo = 7.15

Company: Alcoa Inc (NYSE:AA)

Basic Key ratios

  1. Percentage Held by Insiders = 0.08
  2. Relative Strength 52 weeks = 24
  3. Dividend 5-year Growth = -39.4
  4. Cash Flow 5 -year Average = 2.6
  5. Dividend Yield 5-Year Average = 2.06

Growth

  1. Net Income ($mil) 12/2011 = 611
  2. Net Income ($mil) 12/2010 = 254
  3. Net Income ($mil) 12/2009 = -1151
  4. 12months Net Income this Quarterly/12 months Net Income 4Q's ago = -47.97
  5. Quarterly Net Income this Quarterly/same Quarter year ago = -69.48
  1. EBITDA ($mil) 12/2011 = 3068
  2. EBITDA ($mil) 12/2010 = 2493
  3. EBITDA ($mil) 12/2009 = 283
  4. Net Income Reported Quarterlytr ($mil) = 94
  5. Annual Net Income this Yr/ Net Income last Yr = 140.55
  6. Cash Flow ($/share) 12/2011 = 2.16
  7. Cash Flow ($/share) 12/2010 = 1.97
  8. Cash Flow ($/share) 12/2009 = 0.58
  1. Sales ($mil) 12/2011 = 24951
  2. Sales ($mil) 12/2010 = 21013
  3. Sales ($mil) 12/2009 = 18439
  1. Annual EPS before NRI 12/2007 = 2.65
  2. Annual EPS before NRI 12/2008 = 1.15
  3. Annual EPS before NRI 12/2009 = -0.8
  4. Annual EPS before NRI 12/2010 = 0.55
  5. Annual EPS before NRI 12/2011 = 0.72

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Dividend history

  1. Dividend Yield = 1.21
  2. Dividend Yield 5 Year Average 12/2011 = 2.06
  3. Dividend Yield 5 Year Average 09/2011 = 2.06
  4. Annual Dividend 12/2011 = 0.12
  5. Annual Dividend 12/2010 = 0.12
  6. Forward Yield = 1.21
  7. Dividend 5 year Growth 12/2011 = -39.4

Dividend sustainability

  1. Payout Ratio 09/2011 = 0.23
  2. Payout Ratio 06/2011 = 0.17
  3. Payout Ratio 5 Year Average 12/2011 = 0.46
  4. Payout Ratio 5 Year Average 09/2011 = 0.46
  5. Payout Ratio 5 Year Average 06/2011 = 0.46
  6. Change in Payout Ratio = -0.23

Performance

  1. Percentage Change Price 52 Weeks Relative to S&P 500 = -42.57
  2. Next 3-5 Year Estimate EPS Growth rate = 10
  3. EPS Growth Quarterly(1)/Q(-3) = 164.29
  4. 5 Year History EPS Growth 12/2011 = -29.73
  5. 5 Year History EPS Growth 09/2011 = -29.73
  6. ROE 5 Year Average 12/2011 = 5.28
  7. ROE 5 Year Average 09/2011 = 5.28
  8. ROE 5 Year Average 06/2011 = 6
  9. Return on Investment 12/2011 = 2.24
  10. Return on Investment 09/2011 = 2.24
  11. Return on Investment 06/2011 = 3.01
  12. Debt/Total Cap 5 Year Average 12/2011 = 35.28
  1. Current Ratio 12/2011 = 1.25
  2. Current Ratio 09/2011 = 1.25
  3. Current Ratio 06/2011 = 1.28
  4. Current Ratio 5 Year Average = 1.3
  5. Quick Ratio = 0.8
  6. Cash Ratio = 0.48
  7. Interest Coverage Quarterly = 2.12

Valuation

  1. Book Value Quarterly = 16.48
  2. Price/ Book = 0.6
  3. Price/ Cash Flow = 4.62
  4. Price/ Sales = 0.42
  5. EV/EBITDA 12 Mo = 5.71

Company: Freeport-McMoRan Copper & Gold Inc (NYSE:FCX)

Basic Key ratios

  1. Percentage Held by Insiders = 0.86
  2. Number of Institutional Sellers 12 Weeks = 1
  3. Relative Strength 52 weeks = 33
  4. Dividend 5-year Growth = 5.07
  5. Cash Flow 5 -year Average = 5.17
  6. Dividend Yield 5-Year Average = 1.52

Growth

  1. Net Income ($mil) 12/2011 = 4560
  2. Net Income ($mil) 12/2010 = 4336
  3. Net Income ($mil) 12/2009 = 2749
  4. 12months Net Income this Quarterly/12 months Net Income 4Q's ago = -21.78
  5. Quarterly Net Income this Quarterly/same Quarter year ago = -49.03
  1. EBITDA ($mil) 12/2011 = 10152
  2. EBITDA ($mil) 12/2010 = 10010
  3. EBITDA ($mil) 12/2009 = 7416
  4. Net Income Reported Quarterlytr ($mil) = 764
  5. Annual Net Income this Yr/ Net Income last Yr = 5.17
  6. Cash Flow ($/share) 12/2011 = 5.95
  7. Cash Flow ($/share) 12/2010 = 5.77
  8. Cash Flow ($/share) 12/2009 = 4.4
  1. Sales ($mil) 12/2011 = 20880
  2. Sales ($mil) 12/2010 = 18982
  3. Sales ($mil) 12/2009 = 15040
  1. Annual EPS before NRI 12/2007 = 4.94
  2. Annual EPS before NRI 12/2008 = 3.43
  3. Annual EPS before NRI 12/2009 = 2.96
  4. Annual EPS before NRI 12/2010 = 4.64
  5. Annual EPS before NRI 12/2011 = 4.84

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Dividend history

  1. Dividend Yield = 3.27
  2. Dividend Yield 5 Year Average 12/2011 = 1.52
  3. Dividend Yield 5 Year Average 09/2011 = 1.52
  4. Annual Dividend 12/2011 = 1
  5. Annual Dividend 12/2010 = 0.45
  6. Forward Yield = 3.27
  7. Dividend 5 year Growth 12/2011 = 5.07

Dividend sustainability

  1. Payout Ratio 06/2011 = 0.21
  2. Payout Ratio 5 Year Average 12/2011 = 0.11
  3. Payout Ratio 5 Year Average 09/2011 = 0.11
  4. Payout Ratio 5 Year Average 06/2011 = 0.12
  5. Change in Payout Ratio = 0.09

Performance

  1. Percentage Change Price 52 Weeks Relative to S&P 500 = -31
  2. Next 3-5 Year Estimate EPS Growth rate = 6.9
  3. EPS Growth Quarterly(1)/Q(-3) = 138.85
  4. ROE 5 Year Average 12/2011 = 32.34
  5. ROE 5 Year Average 09/2011 = 32.34
  6. ROE 5 Year Average 06/2011 = 33.04
  7. Return on Investment 06/2011 = 22
  8. Debt/Total Cap 5 Year Average 12/2011 = 31.21
  9. Debt/Total Cap 5 Year Average 09/2011 = 31.21
  10. Debt/Total Cap 5 Year Average 06/2011 = 31.9
  1. Current Ratio 06/2011 = 3.42
  2. Current Ratio 5 Year Average = 2.33
  3. Quick Ratio = 2.1
  4. Cash Ratio = 1.71
  5. Interest Coverage Quarterly = 21.21

Valuation

  1. Book Value Quarterly = 19.57
  2. Price/ Book = 1.96
  3. Price/ Cash Flow = 6.44
  4. Price/ Sales = 1.83
  5. EV/EBITDA 12 Mo = 3.45

Company: Thompson Creek (TC)

Basic Key ratios

  1. Percentage Held by Insiders = 0.2
  2. Relative Strength 52 weeks = 20
  3. Cash Flow 5 -year Average = 1.54
  4. Dividend Yield 5-Year Average = 0

Growth

  1. Net Income ($mil) 12/2011 = 292
  2. Net Income ($mil) 12/2010 = 114
  3. Net Income ($mil) 12/2009 = -56
  4. 12months Net Income this Quarterly/12 months Net Income 4Q's ago = 156.9
  5. Quarterly Net Income this Quarterly/same Quarter year ago = 101.78
  1. EBITDA ($mil) 12/2011 = 380
  2. EBITDA ($mil) 12/2010 = 186
  3. EBITDA ($mil) 12/2009 = -8
  4. Net Income Reported Quarterlytr ($mil) = 1
  5. Annual Net Income this Yr/ Net Income last Yr = 156.9
  6. Cash Flow ($/share) 12/2011 = 1.16
  7. Cash Flow ($/share) 12/2010 = 1.31
  8. Cash Flow ($/share) 12/2009 = 0.59
  1. Sales ($mil) 12/2011 = 669
  2. Sales ($mil) 12/2010 = 595
  3. Sales ($mil) 12/2009 = 373
  1. Annual EPS before NRI 12/2007 = N/A
  2. Annual EPS before NRI 12/2008 = 2.1
  3. Annual EPS before NRI 12/2009 = 0.29
  4. Annual EPS before NRI 12/2010 = 1.07
  5. Annual EPS before NRI 12/2011 = 0.73

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Performance

  1. Percentage Change Price 52 Weeks Relative to S&P 500 = -49.06
  2. Next 3-5 Year Estimate EPS Growth rate = N/A
  3. EPS Growth Quarterly(1)/Q(-3) = -101
  4. ROE 5 Year Average 12/2011 = 21.32
  5. ROE 5 Year Average 09/2011 = 21.32
  6. ROE 5 Year Average 06/2011 = 21.41
  7. Return on Investment 06/2011 = 5.51
  8. Debt/Total Cap 5 Year Average 12/2011 = 12.07
  9. Debt/Total Cap 5 Year Average 09/2011 = 12.07
  10. Debt/Total Cap 5 Year Average 06/2011 = 13.8
  1. Current Ratio 06/2011 = 2.3
  2. Current Ratio 5 Year Average = 6.46
  3. Quick Ratio = 1.94
  4. Cash Ratio = 1.54
  5. Interest Coverage Quarterly = N/A

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Valuation

  1. Book Value Quarterly = 10.3
  2. Price/ Book = 0.63
  3. Price/ Cash Flow = 5.58
  4. Price/ Sales = 1.62
  5. EV/EBITDA 12 Mo = 4.01

Company: Baidu Inc (NASDAQ:BIDU)

Free cash flow= $565 million

Growth

  1. Net Income ($mil) 12/2011 = 1026
  2. Net Income ($mil) 12/2010 = 522
  3. Net Income ($mil) 12/2009 = 218
  4. 12months Net Income this Quarterly/12 months Net Income 4Q's ago = 97
  5. Quarterly Net Income this Quarterly/same Quarter year ago = 85.09
  6. EBITDA ($mil) 12/2010 = 668
  7. EBITDA ($mil) 12/2009 = 293
  8. Net Income Reported Quarterly ($mil) = 326
  9. Annual Net Income this Yr/ Net Income last Yr = 96.68
  10. Cash flow ($/share) 12/2011= 3.42
  11. Cash Flow ($/share) 12/2010 = 2.35
  12. Cash Flow ($/share) 12/2009 = 1.01
  1. Sales ($mil) 12/2011 = 2304
  2. Sales ($mil) 12/2010 = 1202
  3. Sales ($mil) 12/2009 = 652
  1. Annual EPS before NRI 12/2007 = 0.25
  2. Annual EPS before NRI 12/2008 = 0.44
  3. Annual EPS before NRI 12/2009 = 0.63
  4. Annual EPS before NRI 12/2010 = 1.53
  5. Annual EPS before NRI 12/2011 = 3.02

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Performance

  1. Percentage Change Price 52 Weeks Relative to S&P 500 = 2.89
  2. Next 3-5 Year Estimate EPS Growth rate = 45.35
  3. EPS Growth Quarterly(1)/Q(-3) = -186
  4. ROE 5 Year Average 06/2011 = 41.72
  5. Return on Investment 06/2011 = 47.92
  6. Debt/Total Cap 5 Year Average 06/2011 = 3.35
  1. Current Ratio 06/2011 = 3.6
  2. Current Ratio 5 Year Average = 3.43
  3. Quick Ratio = 3.6
  4. Cash Ratio = 3.46
  5. Interest Coverage Quarterly = N/A

Valuation

  1. Book Value = 6.95
  2. Price/ Book = 20.07
  3. Price/ Cash Flow = 40.80
  4. Price/ Sales = 21.16

Conclusion

Long-term investors should wait for the market to let out some more steam before committing large amounts of money to this market as it is still rather overbought. A pullback in the 7%-12% from the peak would qualify as a strong pullback. In the meantime, long-term investors can either sell covered calls, or if you are bullish on the stock naked puts to open up additional streams of income.

Disclaimer

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.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Additional disclosure: EPS, Price, EPS surprise charts obtained from zacks.com. A major portion of the historical data used in this article was obtained from zacks.com.