Do you like to be able to rely on a stock's dividend income as a source of return? Do you prefer stocks that analysts rate as "Buy," or better? In search of companies that can manage their debt well? Interested in companies with minimal long term debt? For ideas on where to look, we ran a screen you may be interested in.
The Debt/Equity Ratio illustrates how aggressively a company is financing its growth via debt. The more debt financing that is used in a capital structure, the more volatile earnings can become due to the additional interest expense. Should a company's potentially enhanced earnings fail to exceed the cost associated with debt financing over time, this can lead the company toward substantial trouble.
The Long Term Debt/Equity Ratio is a variation of the traditional debt-to-equity ratio; this value computes the proportion of a company's long-term debt compared to its available capital. By using this ratio, investors can identify the amount of leverage utilized by a specific company and compare it to others to help analyze the company's risk exposure. Generally, companies that finance a greater portion of their capital via debt are considered riskier than those with lower leverage ratios.
We first looked for stocks with a very high yield (more than 5%). Next, we then screened for businesses that analysts rate as "Buy" or "Strong Buy" (mean recommendation < 3). Next, we then screened for businesses that operate with little to no debt (D/E Ratio<.3). We then screened for businesses that have maintained a sound long term capital structure (Long Term D/E Ratio<.1). We did not screen out any market caps or sectors.
Do you think these stocks deserve to grow higher? Use our list to help with your own analysis.
1) Colony Financial, Inc. (CLNY)
|Industry:||REIT - Diversified|
Colony Financial, Inc. has a Dividend Yield of 7.97% and Payout Ratio of 92.79% and Analysts' Rating of 1.50 and Debt/Equity Ratio of 0.02 and Long Term Debt/Equity Ratio of 0.02. The short interest was 4.07% as of 05/12/2012. 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.
2) Electro Rent Corp. (ELRC)
|Industry:||Rental & Leasing Services|
Electro Rent Corp. has a Dividend Yield of 5.29% and Payout Ratio of 70.50% and Analysts' Rating of 1.00 and Debt/Equity Ratio of 0.00 and Long Term Debt/Equity Ratio of 0.00. The short interest was 2.19% as of 05/12/2012. 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.
3) A. H. Belo Corporation (AHC)
|Industry:||Publishing - Newspapers|
A. H. Belo Corporation has a Dividend Yield of 5.62% and an Analysts' Rating of 2.00 and Debt/Equity Ratio of 0.00 and Long Term Debt/Equity Ratio of 0.00. The Payout Ratio information could not be determined. The short interest was 3.43% as of 05/12/2012. A. H. Belo Corporation operates as a newspaper publishing, and local news and information company primarily in the United States. It owns and operates four metropolitan daily newspapers and associated Web sites. The company's newspapers comprise The Dallas Morning News, The Providence Journal, The Press-Enterprise, and The Denton Record-Chronicle.
4) Anworth Mortgage Asset Corporation (ANH)
|Industry:||REIT - Diversified|
Anworth Mortgage Asset Corporation has a Dividend Yield of 12.41% and Payout Ratio of 104.15% and Analysts' Rating of 2.30 and Debt/Equity Ratio of 0.04 and Long Term Debt/Equity Ratio of 0.04. The short interest was 3.22% as of 05/12/2012. Anworth Mortgage Asset Corporation is a publicly owned real estate investment trust. The firm invests in the fixed income and real estate markets of the United States. It primarily invests in United States agency mortgage-backed securities issued or guaranteed by United States government sponsored entities including mortgage pass-through certificates, collateralized mortgage obligations, and other real estate securities, on a leveraged basis.
5) Crown Crafts Inc. (CRWS)
|Industry:||Textile - Apparel Clothing|
Crown Crafts Inc. has a Dividend Yield of 5.77% and Payout Ratio of 25.93% and Analysts' Rating of 1.50 and Debt/Equity Ratio of 0.00 and Long Term Debt/Equity Ratio of 0.00. The short interest was 0.08% as of 05/12/2012. Crown Crafts, Inc., through its subsidiaries, offers infant and toddler products in the United States, Canada, and internationally. It offers crib and toddler bedding; blankets; nursery accessories; room decor; disposable and reusable bibs and floor mats; burp cloths; bathing accessories; disposable placemats, cup labels, toilet seat covers, and changing mats; diaper bags; pet beds and blankets; and other infant, toddler, juvenile, and pet soft goods. The company sells its products primarily to mass merchants, mid-tier retailers, juvenile specialty stores, value channel stores, grocery and drug stores, restaurants, Internet accounts, wholesale clubs, and catalog retailers through sales force, independent commissioned sales representatives, and distributors.
6) Ellington Financial LLC (EFC)
Ellington Financial LLC has a Dividend Yield of 7.46% and Payout Ratio of 261.37% and Analysts' Rating of 2.00 and Debt/Equity Ratio of 0.00 and Long Term Debt/Equity Ratio of 0.00. The short interest was 0.08% as of 05/12/2012. Ellington Financial LLC based in United States.
*Company profiles were sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.