Are you looking for mid-sized companies that still have room to grow? Looking for dividends you can rely on? Do you prefer companies with strong profits and that analysts rate as 'Buy', or better? Keeping these ideas in mind, we ran a screen you might be interested in.
Return on Assets [ROA] illustrates how much a company is generating in earnings from its assets alone. This metric gives investors a picture of how profitable the company is relative to the assets in current possession. As well, it lets investors see how efficient and effective management is at generating earnings from the company's assets. While most management teams can probably make money by throwing money at an issue, very few can make very large profits with little investment.
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.
We first looked for mid cap stocks that have a high dividend yield (Div. Yield > 5%). We then screened for businesses that have strong profitability relative to their asset base (ROA [TTM]>10%)(1-year fiscal EPS growth rate>10%). From here we looked for companies that analysts rate as "Buy" or "Strong Buy" (mean recommendation < 3). We did not screen out any sectors.
Do you think these mid-cap stocks hold value that has yet to be priced in? Use our list to help with your own analysis.
1) Linn Energy, LLC (LINE)
| Sector: | Basic Materials |
| Industry: | Independent Oil & Gas |
| Market Cap: | $7.51B |
| Beta: | 0.70 |
Linn Energy, LLC has a Dividend Yield of 7.70%, Payout Ratio of 57.07%, Return on Assets of 11.24%, Earnings Per Share Growth Rate of 413.15% and Analysts' Rating of 1.50. The short interest was 0.98% as of 05/14/2012. Linn Energy, LLC, an independent oil and natural gas company, engages in the acquisition and development of oil and gas properties. The company's properties are primarily located in the Mid-Continent, the Permian Basin, Michigan, California, and the Williston Basin in the United States. As of December 31, 2011, it had proved reserves of 3,370 billion cubic feet equivalent of oil and gas, and natural gas liquids, as well as operated 7,759 gross productive wells.
2) Alliance Resource Partners LP (ARLP)
| Sector: | Basic Materials |
| Industry: | Industrial Metals & Minerals |
| Market Cap: | $2.15B |
| Beta: | 0.79 |
Alliance Resource Partners LP has a Dividend Yield of 7.02%, Payout Ratio of 49.02%, Return on Assets of 22.74%, Earnings Per Share Growth Rate of 21.60% and Analysts' Rating of 2.00. The short interest was 0.92% as of 05/14/2012. Alliance Resource Partners, L.P. engages in the production and marketing of coal primarily to utilities and industrial users in the United States.
3) Alliance Holdings GP, L.P. (AHGP)
| Sector: | Basic Materials |
| Industry: | Nonmetallic Mineral Mining |
| Market Cap: | $2.60B |
| Beta: | 0.74 |
Alliance Holdings GP, L.P. has a Dividend Yield of 6.15%, Payout Ratio of 67.36%, Return on Assets of 22.54%, Earnings Per Share Growth Rate of 22.83% and Analysts' Rating of 2.00. The short interest was 0.37% as of 05/14/2012. Alliance Holdings GP, L.P., through its subsidiaries, produces and markets coal primarily to utilities and industrial users in the United States. It produces a range of steam coal with varying sulfur and heat contents. The company operates nine underground mining complexes in Illinois, Indiana, Kentucky, Maryland, and West Virginia.
*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.
