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Reasons to be bullish on CenturyLink Inc (CTL)

  • A strong levered free cash flow of $2.82 billion
  • A good yield of 7.5%
  • Sales surged from $4.9 billion in 2009 to $15.3 billion in 2011
  • A five-year dividend growth rate of 72%
  • A very strong quarterly revenue growth rate of 171%
  • EBITDA increased from $2.15 billion in 2009 to $6.04 billion in 2011
  • Cash flow per share increased from $5.70 in 2009 to $8.43 in 2011
  • A strong five-year sales growth rate of 46%
  • Operating margins of 15%
  • Year over year projected growth rate of 12% for 2012
  • Decent total three year return of 57%
  • A five-year dividend average yield of 6.5%
  • A great free cash flow yield of 9.37%
  • $100K invested for 10 years would have grown to $172K; if the dividends were reinvested the rate of return would be much higher

Company: CenturyLink Inc

Levered Free Cash Flow = $2.82B

Basic Key ratios

  1. Relative Strength 52 weeks = 57
  2. Cash Flow 5 -year Average = 7.02

Growth

  1. Net Income ($mil) 12/2011 = 573
  2. Net Income ($mil) 12/2010 = 948
  3. Net Income ($mil) 12/2009 = 647
  1. EBITDA ($mil) 12/2011 = 6046
  2. EBITDA ($mil) 12/2010 = 3509
  3. EBITDA ($mil) 12/2009 = 2155
  1. Cash Flow ($/share) 12/2011 = 8.43
  2. Cash Flow ($/share) 12/2010 = 8.12
  3. Cash Flow ($/share) 12/2009 = 5.7
  1. Sales ($mil) 12/2011 = 15351
  2. Sales ($mil) 12/2010 = 7042
  3. Sales ($mil) 12/2009 = 4974
  1. Annual EPS before NRI 12/2009 = 3.6
  2. Annual EPS before NRI 12/2010 = 3.39
  3. Annual EPS before NRI 12/2011 = 2.21

Dividend history

  1. Dividend Yield = 7.5
  2. Dividend Yield 5 Year Average = 6.5
  3. Dividend 5 year Growth = 72.26

Dividend sustainability

  1. Payout Ratio = 1.27
  2. Payout Ratio 5 Year Average = 0.68
  3. Change in Payout Ratio = 0.59

Performance

  1. Next 3-5 Year Estimate EPS Growth rate = 4.09
  2. EPS Growth Quarterly(1)/Q(-3) = 127.63
  3. ROE 5 Year Average 12/2011 = 10.29
  1. Current Ratio 06/2011 = 0.88
  2. Current Ratio 5 Year Average = 0.76
  3. Quick Ratio = 0.88
  4. Cash Ratio = 0.38
  5. Interest Coverage Quarterly = 1.9

Company: ITT Corp (ITT)

Basic Key ratios

  1. Relative Strength 52 weeks = 6
  2. Cash Flow 5-year Average = 8.9

Growth

  1. Net Income ($mil) 12/2011 = -130
  2. Net Income ($mil) 12/2010 = 804
  3. Net Income ($mil) 12/2009 = 629
  4. Net Income Reported Quarterly ($mil) = 3
  1. EBITDA ($mil) 12/2011 = -168
  2. EBITDA ($mil) 12/2010 = -113
  3. EBITDA ($mil) 12/2009 = -45
  4. Cash Flow ($/share) 12/2011 = 1.16
  5. Cash Flow ($/share) 12/2010 = 9.63
  6. Cash Flow ($/share) 12/2009 = 8.33
  1. Sales ($mil) 12/2011 = 2119
  2. Sales ($mil) 12/2010 = 10995
  3. Sales ($mil) 12/2009 = 10905
  1. Annual EPS before NRI 12/2007 = 7.06
  2. Annual EPS before NRI 12/2008 = 8.08
  3. Annual EPS before NRI 12/2009 = 7.56
  4. Annual EPS before NRI 12/2010 = 8.82
  5. Annual EPS before NRI 12/2011 = 0.36

Dividend history

  1. Dividend Yield = 1.7
  2. Dividend Yield 5 Year Average 12/2011 = 1.54
  3. Annual Dividend 12/2011 = 1.34
  4. Dividend 5 year Growth 12/2011 = -7.69
  5. Payout Ratio 09/2011 = 0.07

Performance

  1. Next 3-5 Year Estimate EPS Growth rate = 9.77
  2. 5 Year History EPS Growth 12/2011 = 2.2
  3. ROE 5 Year Average 12/2011 = 18.97
  4. Return on Investment 12/2011 = 14.72
  5. Current Ratio 12/2011 = 2.01
  6. Quick Ratio = 1.81
  7. Cash Ratio = 1.33
  8. Interest Coverage Quarterly = 18.5

Company: Ferrellgas Partners LP (FGP))

Basic Key ratios

  1. Percentage Held by Insiders = 0.48
  2. Relative Strength 52 weeks = 27
  3. Dividend 5-year Growth = 0
  4. Cash Flow 5-year Average = 1.82
  5. Dividend Yield 5-Year Average = 9.71

Growth

  1. Net Income ($mil) 12/2011 = -44
  2. Net Income ($mil) 12/2010 = 33
  3. Net Income ($mil) 12/2009 = 53
  4. Net Income Reported Quarterly ($mil) = 36
  1. EBITDA ($mil) 12/2011 = 142
  2. EBITDA ($mil) 12/2010 = 219
  3. EBITDA ($mil) 12/2009 = 228
  1. Cash Flow ($/share) 12/2011 = 0.95
  2. Cash Flow ($/share) 12/2010 = 1.85
  3. Cash Flow ($/share) 12/2009 = 2.07
  1. Sales ($mil) 12/2011 = 2423
  2. Sales ($mil) 12/2010 = 2099
  3. Sales ($mil) 12/2009 = 2070
  1. Annual EPS before NRI 12/2007 = 0.6
  2. Annual EPS before NRI 12/2008 = 0.4
  3. Annual EPS before NRI 12/2009 = 0.89
  4. Annual EPS before NRI 12/2010 = 0.67
  5. Annual EPS before NRI 12/2011 = -0.14

Dividend history

  1. Dividend Yield = 12.50
  2. Dividend Yield 5 Year Average 12/2011 = 9.71
  3. Payout Ratio 06/2011 = 9.52
  4. Payout Ratio 5 Year Average 12/2011 = 5.04

Performance

  1. Next 3-5 Year Estimate EPS Growth rate = 4
  2. 5 Year History EPS Growth 12/2011 = -10.65
  3. ROE 5 Year Average 12/2011 = 27.39
  4. Current Ratio 12/2011 = 0.99
  5. Current Ratio 5 Year Average = 1.11
  6. Quick Ratio = 0.64
  7. Cash Ratio = 0.11
  8. Interest Coverage Quarterly = 2.56

Conclusion

The markets are extremely oversold, and some sort of relief rally could take hold soon. However, we still believe there is more downside to this market before a multi-month bottom takes hold. Long-term investors can use strong pullbacks to slowly start deploying money into long-term investments. A great way to get into a stock at a price of your choosing is to sell puts at strikes you would not mind owning the stock at. Investors looking for even more investment ideas might find these articles to be of interest: General Electric: An Option Strategy That Could Potentially triple your yield and Johnson & Johnson 1 Of 5 Long-Term Prospects To Consider.

Disclaimer

This list of stocks is meant to serve as a starting point. Please do not treat this as a buying list. It is imperative that you do your due diligence and then determine if any of the above plays meet with your risk tolerance levels. The Latin maxim caveat emptor applies - let the buyer beware.

Source: CenturyLink 1 Of 3 Dividend Plays To Take A Deeper Look At

Additional disclosure: EPS and Price Vs industry charts obtained from zacks.com. A major portion of the historical data used in this article was obtained from zacks.com.