6 Stocks With High Dividend Yields And Recent EPS Surprises

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 |  Includes: CTL, EVEP, IVR, NCT, NLY, RGP, T, VZ
by: Vytautas Drumelis

I have screened for stocks that have high dividend yields of more than 5% and recent EPS surprises of at least 10%. Additionally, I have picked only the stocks that have had average dividend yields for the last five years of 5% or more.

This list is a quick list only which requires further research into each of the stocks before making an investment decision. But I believe it can give some food for thought if you are looking for stocks with high dividend yield.

1) CenturyLink, Inc. (NYSE:CTL) operates as an integrated telecommunications company in the United States. The company provides local and long-distance, network access, private line, public access, broadband, data, managed hosting, colocation, wireless and video services to consumers and businesses. It offers video entertainment services under the CenturyLink Prism TV and DIRECTV brands.

The company has recently surprised analysts with Q1 2012 EPS results of $0.68 vs. $0.58 estimated (17.2% surprise). It has a solid trailing annual dividend yield of 7.4%, a forward annual dividend yield of 7.3%, and an average dividend yield of 6.5% over the last five years. CenturyLink, Inc. pays out 333% of its current earnings as dividends.

The median target price projected by analysts is $45, which means 16.5% upside potential from today's price.

Its biggest competitors AT&T, Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ) have dividend yield of 5.2% and 4.9% respectively.

2) Energy Transfer Equity, L.P. (NYSE:EPE), through its direct and indirect investments in the limited partner and general partner interests in Energy Transfer Partners, L.P., engages in midstream, intrastate, and interstate transportation of natural gas, as well as in storage of natural gas in the United States. The company’s Intrastate Transportation and Storage segment engages in the ownership and operation of natural gas transportation pipelines and natural gas storage facilities.

The company has recently surprised analysts with Q1 2012 EPS results of $0.73 vs. $0.38 estimated (92.1% surprise). It has failed to meet analyst estimates in the last 3 quarters, so this could be an indicator that fundamentals have changed recently. It has a solid trailing annual dividend yield of 6.2%, a forward annual dividend yield of 6.4%, and an average dividend yield of 6.9% over the last five years. Energy Transfer Equity pays out 170% of its current earnings as dividends.

The median target price projected by analysts is $46, which means 18.1% upside potential from today's price.

3) Regency Energy Partners LP (NYSE:RGP) engages in gathering, treating, processing, compressing, and transporting natural gas and natural gas liquids [NGLS]. It transports raw natural gas from the wellhead through gathering systems; processes raw natural gas to separate NGLs; and sells or delivers the pipeline-quality natural gas and NGLs to various markets and pipeline systems.

The company has recently surprised analysts with Q1 2012 EPS results of $0.14 vs. $0.10 estimated (40% surprise). It has a solid trailing and forward annual dividend yield of 8.1% and an average dividend yield of 9.8% over the last five years. Regency Energy Partners pays out 561% of its current earnings as dividends.

The median target price projected by analysts is $28, which means 23.9% upside potential from today's price.

4) EV Energy Partners, L.P. (NASDAQ:EVEP) engages in the acquisition, development, and production of oil and natural gas properties in the United States.

The company has recently surprised analysts with Q1 2012 EPS results of $0.63 vs. $0.42 estimated (50% surprise). It has a solid trailing annual dividend yield of 5.4%, a forward annual dividend yield of 5.2%, and an average dividend yield of 9.9% over the last five years. EV Energy Partners pays out 114% of its current earnings as dividends.

The median target price projected by analysts is $92, which means 62.2% upside potential from today's price.

5) Invesco Agency Securities Inc. (NYSE:IVR) operates as a mortgage real estate investment trust. The company was founded in 2008 and is based in Atlanta, Georgia.

The company has recently surprised analysts with Q1 2012 EPS results of $0.72 vs. $0.65 estimated (10.8% surprise). It has a solid trailing annual dividend yield of 17%, a forward annual dividend yield of 14.2%. Invesco Agency Securities pays out 100% of its current earnings as dividends. IVR has been founded in 2008 only, however, and does not have a long history of dividend payoffs.

6) Newcastle Investment Corp. (NYSE:NCT) operates as a real estate investment and finance company that invests in and manages a portfolio consisting primarily of real estate securities. The company’s portfolio of real estate securities includes commercial mortgage backed securities, senior unsecured debt issued by property REITs, real estate related asset backed securities, and agency residential mortgage backed securities.

The company has recently surprised analysts with Q1 2012 EPS results of $0.68 vs. $0.29 estimated (134.5% surprise). It has a solid trailing annual dividend yield of 8.6%, a forward annual dividend yield of 11.3%, and an average dividend yield of 42.2% over the last five years. Newcastle Investment Corp. pays out 13% of its current earnings as dividends.

The median target price projected by analysts is $8, which means 14% upside potential from today's price. It also looks undervalued in terms of multiples with P/E of 2.99 compared to industry 15.38 and it's biggest direct competitor Annaly Capital Management, Inc. (NYSE:NLY) having P/E of 29.17. NCT also has low P/S (4.14) compared to industry (5.66) and to NLY (18.64).

Financial data and business descriptions taken from Yahoo Finance.

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