Interested in following smaller companies? Are you after stocks with high dividend yield? Looking for ways to dig deeper into a company's profitability? Do you prefer stocks that analysts rate as 'Strong Buy'? If so, here are some interesting ideas for you.
EPS growth (earnings per share growth) illustrates the growth of earnings per share over time. EPS growth rates help investors identify stocks that are increasing or decreasing in profitability. This profitability metric is generally a key driver in the price of the stock as it directly correlates to the profitability of the company as a whole.
The Net Margin is a profitability metric that illustrates, by percentage, how much of every dollar earned gets turned into a bottom line profit. This is just one of many profitability metrics used by investors and analysts to better understand what the company is being left with at the end of the day. Generally, a firm that can expand its net profit margins over a period of time will see its stock price rise as well due to the trend of increasing profitability. Net Margin = Net Income/Total Revenue
We first looked for small cap stocks with a very high yield (more than 5%). We next screened for businesses that have shown strong bottom line growth over the last year (1-year fiscal EPS growth rate>10%)(Net Margin [TTM]>10%). We then looked for companies that analysts rate as a "Strong Buy" (mean recommendation < 2). We did not screen out any sectors.
Do you think these small-cap stocks are worth more than their current valuations? Please use our list to assist with your own analysis.
1) Breitburn Energy Partners L.P. (BBEP)
|Industry:||Oil & Gas Drilling & Exploration|
Breitburn Energy Partners L.P. has a Dividend Yield of 10.46% and Payout Ratio of 90.47% and Earnings Per Share Growth Rate of 193.60% and Net Margin of 23.04% and Analysts' Rating of 1.50. The short interest was 0.81% as of 05/11/2012. BreitBurn Energy Partners L.P. engages in the acquisition, exploitation, and development of oil and gas properties in the United States. The company's properties include natural gas, oil, and midstream assets comprising fields in the Antrim Shale in Michigan, and the New Albany Shale in Indiana and Kentucky; and fields in the Evanston and Green River basins in southwestern Wyoming, the Wind river and Big Horn basins in central Wyoming, the Powder River basin in eastern Wyoming, the Los Angeles basin in California, and fields in Florida's Sunniland Trend. As of December 31, 2011, its total estimated proved reserves were 151.
2) Colony Financial, Inc. (CLNY)
|Industry:||REIT - Diversified|
Colony Financial, Inc. has a Dividend Yield of 7.95% and Payout Ratio of 92.79% and Earnings Per Share Growth Rate of 23.35% and Net Margin of 64.10% and Analysts' Rating of 1.50. The short interest was 4.07% as of 05/11/2012. Colony Financial, Inc. operates as a real estate finance and investment company that focuses primarily on acquiring, originating, and managing commercial mortgage loans, and other commercial real estate-related debt investments. The company has elected to be taxed as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders.
3) Electro Rent Corp. (ELRC)
|Industry:||Rental & Leasing Services|
Electro Rent Corp. has a Dividend Yield of 5.15% and Payout Ratio of 70.50% and Earnings Per Share Growth Rate of 104.27% and Net Margin of 10.53% and Analysts' Rating of 1.00. The short interest was 2.19% as of 05/11/2012. Electro Rent Corporation engages in the rental, lease, and sale of new and used electronic test and measurement equipment. Its equipment portfolio consists of general purpose test and measurement instruments; personal computers, workstations, and servers; and electrical test equipment and inspection equipment. The company rents or leases its equipment primarily to companies operating in the aerospace, defense, telecommunications, electronics, and semiconductor industries. Electro Rent Corporation serves its customers through sales offices, and calibration and service centers in the United States, Canada, China, and Europe.
4) LRR Energy, L.P. (LRE)
|Industry:||Independent Oil & Gas|
LRR Energy, L.P. has a Dividend Yield of 11.14% and Payout Ratio of 0.00% and Earnings Per Share Growth Rate of 472.00% and Net Margin of 11.61% and Analysts' Rating of 1.30. The short interest was 0.21% as of 05/11/2012. LRR Energy, L.P. acquires, exploits, develops, and operates oil and natural gas properties in North America. The company's properties are located in the Permian Basin region in west Texas and southeast New Mexico; the Mid-Continent region in Oklahoma and east Texas; and the Gulf Coast region in Texas. As of March 31, 2011, its total estimated proved reserves were approximately 30.
5) Monmouth Real Estate Investment Corp. (MNR)
|Industry:||REIT - Industrial|
Monmouth Real Estate Investment Corp. has a Dividend Yield of 5.67% and Payout Ratio of 185.00% and Earnings Per Share Growth Rate of 11.04% and Net Margin of 32.42% and Analysts' Rating of 1.50. The short interest was 4.15% as of 05/11/2012. Monmouth Real Estate Investment Corporation (MREIC) is a real estate investment trust. It owns, manages, and leases properties to investment-grade tenants on long-term leases. The firm invests in the public equity and real estate markets of the United States. It primarily invests in industrial properties and holds a portfolio of REIT securities.
6) W. P. Carey & Co. LLC (WPC)
|Industry:||Real Estate Development|
W. P. Carey & Co. LLC has a Dividend Yield of 5.04% and Payout Ratio of 62.45% and Earnings Per Share Growth Rate of 62.35% and Net Margin of 42.03% and Analysts' Rating of 1.00. The short interest was 0.23% as of 05/11/2012. W. P. Carey & Co. LLC, together with its subsidiaries, provides long-term sale-leaseback and build-to-suit transactions for companies worldwide and manages a global investment portfolio. It invests primarily in commercial properties that are each triple-net leased to single corporate tenants, which requires each tenant to pay substantially all of the costs associated with operating and maintaining the property. The company also operates as an advisor to publicly owned, non-actively traded real estate investment trusts, which are sponsored by it under the Corporate Property Associates brand name, as well as invests in similar properties.
*Company profiles were sourced from Finviz. Financial data was sourced from Google Finance and Yahoo Finance.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.