Are you looking for mid-sized companies that still have room to grow? Are you after very high dividend yield stocks, with yields over 10%? Are you after stocks that analysts are calling 'buy' or 'strong buy'? Looking for undervalued stocks? For ideas on how to start your own search, we ran a screen.
The forward P/E is a price multiple valuation metric, which is similar to the current P/E ratio, except that it uses the forecasted earnings instead. While this number might not be as accurate because it uses "forecasted" numbers, it does offer the benefit of illustrating analysts' expectations of a firm. If the market believes that earnings will grow moving forward, then the forward P/E should be lower than the current P/E. Financial Leverage, also known as the Equity Multiplier, illustrates how a firm is financing its assets. The lower the number the more a firm is financing its assets internally through stockholder equity. The higher this metric is the more the firm is relying on debt to finance its assets.
The Price/Book Value Ratio is a great price-multiple valuation metric to find companies that could be potentially undervalued or overvalued. If a firm has a Price/Book Value Ratio of less than 1 it is stated to be trading below "break up" value. A lower P/BV Ratio can indicate a potentially mispriced company or indicate that something is fundamentally wrong with it.
We first looked for mid cap stocks that have a very high dividend yield (Div. Yield > 10%). We next screened for businesses that analysts rate as "Buy" or "Strong Buy" (mean recommendation < 3). We then looked for businesses with a low price-multiple premium (forward P/E<10)(P/BV<1). We did not screen out any sectors.
Do you think these mid-cap stocks have strong operations? Use our list to help with your own analysis.
1) Invesco Mortgage Capital Inc. (IVR)
Invesco Mortgage Capital Inc. has a Dividend Yield of 17.41% and Payout Ratio of 100.25% and Analysts' Rating of 2.20 and Forward Price/Earnings Ratio of 6.32 and Price/Book Value Ratio of 0.96. The short interest was 4.50% as of 05/20/2012. Invesco Agency Securities Inc. operates as a mortgage real estate investment trust. The company was founded in 2008 and is based in Atlanta, Georgia..
2) Ares Capital Corporation (ARCC)
Ares Capital Corporation has a Dividend Yield of 10.09% and Payout Ratio of 99.35% and Analysts' Rating of 1.80 and Forward Price/Earnings Ratio of 9.00 and Price/Book Value Ratio of 0.95. The short interest was 2.11% as of 05/20/2012. Ares Capital Corporation is a private equity firm specializing in acquisition, recapitalization, mezzanine debt, restructurings, rescue financing, and leveraged buyout transactions of middle market companies. It also makes growth capital and general refinancing. It prefers to make investments in companies engaged in the basic and growth manufacturing, business services, consumer products, health care products and services, and information technology service sectors.
3) MFA Financial, Inc. (MFA)
|Industry:||REIT - Diversified|
MFA Financial, Inc. has a Dividend Yield of 13.04% and Payout Ratio of 116.77% and Analysts' Rating of 2.20 and Forward Price/Earnings Ratio of 7.83 and Price/Book Value Ratio of 0.95. The short interest was 3.30% as of 05/20/2012. MFA Financial, Inc., a real estate investment trust (REIT), invests in residential agency and non-agency mortgage-backed securities [MBS]. Its MBS are secured by hybrid mortgages, adjustable-rate mortgages, and 15-year and longer term fixed-rate mortgages, as well as by mortgages that have interest rates that reset more frequently. The company has elected to be taxed as a REIT for U.
*Company profiles were sourced from Finviz. Financial data was sourced from Finviz and Google Finance.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.