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Only stocks that met the following criteria were included on this list. Novice investors would do well to follow some of the suggested guidelines when it comes to looking for new investment ideas. In terms of stocks that pay dividends investors would do well not to obsess on the yield factor only. Unusually high yields are generally not associated with safe long-term investors, and they can sometimes be a sign that all is not well with the company. We also included one stock that did not meet the criteria listed below and labeled it as "average" to illustrate which stocks investors should shy away from unless they are willing to take on a bit more risk.

  1. Net income should be generally trending upwards for the past 3 years
  2. EPS should be trending upwards for the past 3 years
  3. Sales should be trending upwards for the past 3 years
  4. Cash flow per share should be trending upwards for the past 3 years
  5. Annual EPS before NRI should be generally trending upwards for the past 3 years
  6. A payout ratio of 45% or lower when applicable; if no dividends are paid then this criteria is not applicable
  7. EBITDA should be generally trending upwards for the past 3 years
  8. 3-5 year projected EPS growth rate of 7.6% or higher
  9. If the company has a positive levered free cash flow, it should be viewed as "icing on the cake"

Denbury Resources Inc (NYSE:DNR), for example, fulfills and exceeds the above listed criteria.

  • Net income increased from $-75 million in 2009 to $573 in 2011
  • EBITDA increased from $171 million in 2009 to $1.5 billion in 2011
  • Sales surged from $889 million in 2009 to $2.3 billion in 2011
  • Annual EPS before NRI increased from $0.7 in 2009 to $1.43 in 2011
  • It has a projected 3-5 year EPS growth rate of 40%
  • A good five year average ROE of 14%
  • A good interest coverage ratio of 3.2
  • A strong 5 year sales growth rate of 22%
  • A good long-term debt to equity ratio of 0.56
  • A strong quarterly revenue growth rate of 25%
  • Year over year growth rate for 2012 of 16%
  • $100K invested for 10 years would have grown to $606K

For investors looking for other investment ideas extensive data has been provided on four additional companies to get you started. Additionally, investors might find our latest article to be of interest - Seadrill Among 5 Growth Candidates To Reflect On.

Company: Denbury Resources Inc.

Growth

  1. Net Income ($mil) 12/2011 = 573
  2. Net Income ($mil) 12/2010 = 272
  3. Net Income ($mil) 12/2009 = -75
  1. EBITDA ($mil) 12/2011 = 1515
  2. EBITDA ($mil) 12/2010 = 1107
  3. EBITDA ($mil) 12/2009 = 171
  4. Cash Flow ($/share) 12/2011 = 2.55
  5. Cash Flow ($/share) 12/2010 = 1.71
  6. Cash Flow ($/share) 12/2009 = 1.68
  1. Sales ($mil) 12/2011 = 2309
  2. Sales ($mil) 12/2010 = 1922
  3. Sales ($mil) 12/2009 = 889
  4. Annual EPS before NRI 12/2009 = 0.7
  5. Annual EPS before NRI 12/2010 = 0.62
  6. Annual EPS before NRI 12/2011 = 1.43

Performance

  1. Next 3-5 Year Estimate EPS Growth rate = 40.5
  2. EPS Growth Quarterly(1)/Q(-3) = -157.69
  3. ROE 5 Year Average 12/2011 = 13.59
  4. Return on Investment 06/2011 = 8.06
  5. Current Ratio 06/2011 = 1.04
  6. Current Ratio 5 Year Average = 0.99
  7. Quick Ratio = 1.04
  8. Cash Ratio = 0.34
  9. Interest Coverage Quarterly = 3.23

Valuation

  1. Book Value Quarterly = 12.27
  2. Price/ Book = 1.57
  3. Price/ Cash Flow = 7.54

Company: Pioneer Nat Res (NYSE:PXD)

Basic Key ratios

  1. Percentage Held by Insiders = 1.5
  2. Number of Institutional Sellers 12 Weeks = 7

Growth

  1. Net Income ($mil) 12/2011 = 834
  2. Net Income ($mil) 12/2010 = 605
  3. Net Income ($mil) 12/2009 = -52
  1. EBITDA ($mil) 12/2011 = 1450
  2. EBITDA ($mil) 12/2010 = 1422
  3. EBITDA ($mil) 12/2009 = 410
  4. Cash Flow ($/share) 12/2011 = 10.52
  5. Cash Flow ($/share) 12/2010 = 5.37
  6. Cash Flow ($/share) 12/2009 = 3.96
  1. Sales ($mil) 12/2011 = 2787
  2. Sales ($mil) 12/2010 = 2472
  3. Sales ($mil) 12/2009 = 1712
  1. Annual EPS before NRI 12/2009 = -0.04
  2. Annual EPS before NRI 12/2010 = 1.33
  3. Annual EPS before NRI 12/2011 = 5.55

Dividend history

  1. Dividend Yield = 0.10
  2. Dividend Yield 5 Year Average 12/2011 = 0.41
  3. Dividend 5 year Growth 12/2011 = -29.18

Dividend sustainability

  1. Payout Ratio 06/2011 = 0.01
  2. Payout Ratio 5 Year Average 12/2011 = 0.08
  3. Change in Payout Ratio = -0.07

Performance

  1. Next 3-5 Year Estimate EPS Growth rate = 10
  2. EPS Growth Quarterly(1)/Q(-3) = -177.94
  3. ROE 5 Year Average 12/2011 = 7.21
  4. Return on Investment 12/2011 = N/A
  5. Current Ratio 06/2011 = 1.46
  6. Current Ratio 5 Year Average = 1.07
  7. Quick Ratio = 1.22
  8. Cash Ratio = 0.94
  9. Interest Coverage Quarterly = N/A

Valuation

  1. Book Value Quarterly = 46.38
  2. Price/ Book = 2.43
  3. Price/ Cash Flow = 10.71

Company: Range Resources (NYSE:RRC)

Basic Key ratios

Percentage Held by Insiders = 1.8

Growth

  1. Net Income ($mil) 12/2011 = 58
  2. Net Income ($mil) 12/2010 = -239
  3. Net Income ($mil) 12/2009 = -54
  1. EBITDA ($mil) 12/2011 = 609
  2. EBITDA ($mil) 12/2010 = 522
  3. EBITDA ($mil) 12/2009 = 437
  4. Cash Flow ($/share) 12/2011 = 2.85
  5. Cash Flow ($/share) 12/2010 = 2.18
  6. Cash Flow ($/share) 12/2009 = 2.8
  1. Sales ($mil) 12/2011 = 1219
  2. Sales ($mil) 12/2010 = 910
  3. Sales ($mil) 12/2009 = 907
  1. Annual EPS before NRI 12/2009 = 1.04
  2. Annual EPS before NRI 12/2010 = 0.36
  3. Annual EPS before NRI 12/2011 = 0.34

Dividend history

  1. Dividend Yield = 0.3
  2. Dividend Yield 5 Year Average 12/2011 = 0.33
  3. Forward Yield = 0.25
  4. Dividend 5 year Growth 12/2011 = 3.16

Dividend sustainability

  1. Payout Ratio 09/2011 = 0.18
  2. Payout Ratio 5 Year Average 12/2011 = 0.17

Performance

  1. Next 3-5 Year Estimate EPS Growth rate = 35.76
  2. EPS Growth Quarterly(1)/Q(-3) = 131.82
  3. 5 Year History EPS Growth 12/2011 = -21.35
  4. ROE 5 Year Average 12/2011 = 8.96
  5. Return on Investment 12/2011 = 3.35
  1. Current Ratio 12/2011 = 0.84
  2. Current Ratio 5 Year Average = 1.09
  3. Quick Ratio = 0.59
  4. Cash Ratio = 0.34
  5. Interest Coverage Quarterly = 0.93

Valuation

  1. Book Value Quarterly = 14.8
  2. Price/ Book = 4.4
  3. Price/ Cash Flow = 22.87

Company: Cabot Oil & Gas (NYSE:COG)

Basic Key ratios

Percentage Held by Insiders = 2

Growth

  1. Net Income ($mil) 12/2011 = 122
  2. Net Income ($mil) 12/2010 = 103
  3. Net Income ($mil) 12/2009 = 148
  1. EBITDA ($mil) 12/2011 = 654
  2. EBITDA ($mil) 12/2010 = 597
  3. EBITDA ($mil) 12/2009 = 537
  4. Cash Flow ($/share) 12/2011 = 2.21
  5. Cash Flow ($/share) 12/2010 = 2.08
  6. Cash Flow ($/share) 12/2009 = 2.01
  1. Sales ($mil) 12/2011 = 980
  2. Sales ($mil) 12/2010 = 844
  3. Sales ($mil) 12/2009 = 879
  1. Annual EPS before NRI 12/2009 = 0.78
  2. Annual EPS before NRI 12/2010 = 0.49
  3. Annual EPS before NRI 12/2011 = 0.55

Dividend history

  1. Dividend Yield = 0.2
  2. Dividend Yield 5 Year Average 12/2011 = 0.3
  3. Annual Dividend 12/2011 = 0.06
  4. Dividend 5 year Growth 12/2011 = -2.29

Dividend sustainability

  1. Payout Ratio 09/2011 = 0.07
  2. Payout Ratio 5 Year Average 12/2011 = 0.09
  3. Change in Payout Ratio = -0.02

Performance

  1. EPS Growth Quarterly(1)/Q(-3) = -146.67
  2. 5 Year History EPS Growth 12/2011 = -13.73
  3. ROE 5 Year Average 12/2011 = 10.22
  4. Return on Investment 12/2011 = 3.94
  5. Current Ratio 12/2011 = 1.05
  6. Current Ratio 5 Year Average = 1.02
  7. Quick Ratio = 0.95
  8. Cash Ratio = 0.61
  9. Interest Coverage Quarterly = 2.76

Company: Cobalt International Energy (NYSE:CIE)

Basic Key ratios

  1. Percentage Held by Insiders = 2.81
  2. Number of Institutional Sellers 12 Weeks = 7

Growth

  1. Net Income ($mil) 12/2011 = -134
  2. Net Income ($mil) 12/2010 = -136
  3. Net Income ($mil) 12/2009 = -81
  1. EBITDA ($mil) 12/2011 = -111
  2. EBITDA ($mil) 12/2010 = -134
  3. Cash Flow ($/share) 12/2011 = -0.17
  4. Cash Flow ($/share) 12/2010 = -0.22
  5. Cash Flow ($/share) 12/2009 = -0.19
  1. Annual EPS before NRI 12/2009 = -0.26
  2. Annual EPS before NRI 12/2010 = -0.23
  3. Annual EPS before NRI 12/2011 = -0.23

Performance

  1. Percentage Change Price 52 Weeks Relative to S&P 500 = 69.85
  2. EPS Growth Quarterly(1)/Q(-3) = -101
  3. ROE 5 Year Average 12/2011 = -9.13
  4. Return on Investment 06/2011 = -4.86
  5. Current Ratio 06/2011 = 5.61
  6. Current Ratio 5 Year Average = 24.99
  7. Quick Ratio = 5.46
  8. Cash Ratio = 5.22
  9. Interest Coverage Quarterly = N/A

Valuation

  1. Book Value Quarterly = 5.3
  2. Price/ Book = 4
  3. Price/ Cash Flow = N/A

Notes

This would fall under the category of "average."

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.

Source: 3 Dividend And 2 Interesting Growth Plays To Consider

Additional disclosure: EPS and price Vs industry charts obtained from zacks.com. A major portion of the historical data used in this article was obtained from zacks.com.