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Investors should not base their decision on yield alone. There are many stocks that offer extremely high yields but their performance over the years has been dismal. In fact, in some cases even with the yield the total rate of return has been negative for the past 3-5 years. One should look at the robustness of the company, the dividend growth rate, the sustainability of the dividend and finally one should take a look at the company's dividend history. Companies with stellar records will do everything possible to avoid cutting the dividend in order to maintain this record.

Company: Enterprise Products Partners (NYSE:EPD)

Basic Key ratios

  1. Percentage Held by Insiders = 34.7
  2. Number of Institutional Sellers 12 Weeks = 1
  3. Relative Strength 52 weeks = 85
  4. Dividend 5-year Growth = 5.73
  5. Cash Flow 5-year Average = 2.37
  6. Dividend Yield 5-Year Average = 6.72

Growth

  1. Net Income ($mil) 12/2011 = 2047
  2. Net Income ($mil) 12/2010 = 321
  3. Net Income ($mil) 12/2009 = 204
  4. Net Income Reported Quarterly ($mil) = 651
  1. EBITDA ($mil) 12/2011 = 3867
  2. EBITDA ($mil) 12/2010 = 3137
  3. EBITDA ($mil) 12/2009 = 2690
  1. Cash Flow ($/share) 12/2011 = 3.34
  2. Cash Flow ($/share) 12/2010 = 1.63
  3. Cash Flow ($/share) 12/2009 = 3.15
  1. Sales ($mil) 12/2011 = 44313
  2. Sales ($mil) 12/2010 = 33739
  3. Sales ($mil) 12/2009 = 25511
  1. Annual EPS before NRI 12/2007 = 0.96
  2. Annual EPS before NRI 12/2008 = 1.85
  3. Annual EPS before NRI 12/2009 = 1.81
  4. Annual EPS before NRI 12/2010 = 1.39
  5. Annual EPS before NRI 12/2011 = 2.21

Dividend history

  1. Dividend Yield = 5.10
  2. Dividend Yield 5 Year Average 12/2011 = 6.72
  3. Dividend 5 year Growth 12/2011 = 5.73

Dividend sustainability

  1. Payout Ratio 09/2011 = 1.06
  2. Payout Ratio 5 Year Average 12/2011 = 1.32

Performance

  1. Next 3-5 Year Estimate EPS Growth rate = 6.4
  2. 5 Year History EPS Growth 12/2011 = 15.17
  3. ROE 5 Year Average 12/2011 = 12.81
  4. Return on Investment 12/2011 = 7.94
  5. Current Ratio 12/2011 = 0.79
  6. Current Ratio 5 Year Average = 0.93
  7. Quick Ratio = 0.67
  8. Cash Ratio = 0.06
  9. Interest Coverage Quarterly = 4.33

Company: Honeywell Intl (NYSE:HON)

Basic Key ratios

  1. Relative Strength 52 weeks = 60
  2. Cash Flow 5-year Average = 4.27

Growth

  1. Net Income ($mil) 12/2011 = 2067
  2. Net Income ($mil) 12/2010 = 2022
  3. Net Income ($mil) 12/2009 = 1548
  4. Net Income Reported Quarterly ($mil) = 823
  1. EBITDA ($mil) 12/2011 = 3615
  2. EBITDA ($mil) 12/2010 = 4095
  3. EBITDA ($mil) 12/2009 = 3379
  4. Cash Flow ($/share) 12/2011 = 5.09
  5. Cash Flow ($/share) 12/2010 = 3.86
  6. Cash Flow ($/share) 12/2009 = 4.08
  1. Sales ($mil) 12/2011 = 36529
  2. Sales ($mil) 12/2010 = 33370
  3. Sales ($mil) 12/2009 = 30908
  1. Annual EPS before NRI 12/2007 = 3.16
  2. Annual EPS before NRI 12/2008 = 3.76
  3. Annual EPS before NRI 12/2009 = 2.85
  4. Annual EPS before NRI 12/2010 = 2.59
  5. Annual EPS before NRI 12/2011 = 3.79

Dividend history

  1. Dividend Yield = 2.6
  2. Dividend Yield 5 Year Average = 2.64
  3. Dividend 5 year Growth = 7.72

Dividend sustainability

  1. Payout Ratio 09/2011 = 0.36
  2. Payout Ratio 5 Year Average 12/2011 = 0.39

Performance

  1. Next 3-5 Year Estimate EPS Growth rate = 13.2
  2. 5 Year History EPS Growth 12/2011 = 0.2
  3. ROE 5 Year Average 12/2011 = 26.95
  4. Current Ratio 12/2011 = 1.31
  5. Quick Ratio = 0.97
  6. Cash Ratio = 0.38
  7. Interest Coverage Quarterly = 13.61

Valuation

  1. Book Value Quarterly = 15.26
  2. Price/ Book = 3.62
  3. Price/ Cash Flow = 10.84

Company: Ares Cap Cp (NASDAQ:ARCC)

Growth

  1. Net Income ($mil) 12/2011 = 319
  2. Net Income ($mil) 12/2010 = 692
  3. Net Income ($mil) 12/2009 = 203
  1. EBITDA ($mil) 12/2011 = 437
  2. EBITDA ($mil) 12/2010 = 318
  3. EBITDA ($mil) 12/2009 = 163
  4. Cash Flow ($/share) 12/2011 = 1.68
  5. Cash Flow ($/share) 12/2010 = 1.41
  6. Cash Flow ($/share) 12/2009 = 1.3
  1. Sales ($mil) 12/2011 = 634
  2. Sales ($mil) 12/2010 = 483
  3. Sales ($mil) 12/2009 = 245
  1. Annual EPS before NRI 12/2007 = 1.43
  2. Annual EPS before NRI 12/2008 = 1.42
  3. Annual EPS before NRI 12/2009 = 1.35
  4. Annual EPS before NRI 12/2010 = 1.43
  5. Annual EPS before NRI 12/2011 = 1.56

Dividend history

  1. Dividend Yield = 9.7
  2. Dividend Yield 5 Year Average = 13.00
  3. Dividend 5 year Growth = - 2.65

Dividend sustainability

  1. Payout Ratio = 0.99
  2. Payout Ratio 5 Year Average = 1.08

Performance

  1. Next 3-5 Year Estimate EPS Growth rate = 11.5
  2. ROE 5 Year Average 12/2011 = 10.03
  3. Current Ratio 06/2011 = 1.3
  4. Quick Ratio = 1.32
  5. Cash Ratio = 0.73
  6. Interest Coverage Quarterly = 3.91

Conclusion

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 Is It Worth Taking The Leap Into RIMM?

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: Enterprise Products Partners 1 Of 3 Interesting Long Term Prospects To Reflect On

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.