Small-cap stocks tend to offer investors greater growth opportunities than large-cap alternatives, although this comes with its fair share of added risk. Are you looking for small-caps? Do you like stocks with high dividend yield? Looking for ways to dig deeper into a company's profitability? Do you prefer investing in stocks that analysts rate as 'strong buy'? If so, you'll probably like this list.
The Operating Profit Margin is a profitability ratio that measures the effectiveness of the company's operating efficiency. This metric allows investors to see how much profit is left after all variable costs are covered. If the company's margin is increasing over time this means that it's earning more per dollar of sales. Finding trends in the Operating Profit Margin helps investors identify companies that are improving profitability over time and managing the economic landscape better than competitors.
The Net Margin is a profitability metric that illustrates, by percentage, how much of every dollar earned gets turned into a bottom line profit. This is just one of many profitability metrics used by investors and analysts to better understand what the company is being left with at the end of the day. Generally, a firm that can expand its net profit margins over a period of time will see its stock price rise as well due to the trend of increasing profitability. Net Margin = Net Income/Total Revenue
We first looked for small cap stocks with a very high yield (more than 5%). We then looked for businesses with strong profit margins (1-year operating margin>15%)(Net Margin [TTM] >10%). We then looked for businesses that analysts rate as "Strong Buy" (mean recommendation < 2). We did not screen out any sectors.
Do you think these small-cap stocks have more value to price in? Please use our list to assist with your own analysis.
1) W. P. Carey & Co. LLC (WPC)
|Industry:||Real Estate Development|
W. P. Carey & Co. LLC has a Dividend Yield of 5.11% and Payout Ratio of - and Operating Profit Margin of 49.96% and Net Margin of 40.46% and Analysts' Rating of 1.00. The short interest was 0.22% as of 05/24/2012. W. P. Carey & Co. LLC, together with its subsidiaries, provides long-term sale-leaseback and build-to-suit transactions for companies worldwide and manages a global investment portfolio. It invests primarily in commercial properties that are each triple-net leased to single corporate tenants, which requires each tenant to pay substantially all of the costs associated with operating and maintaining the property. The company also operates as an advisor to publicly owned, non-actively traded real estate investment trusts, which are sponsored by it under the Corporate Property Associates brand name, as well as invests in similar properties.
2) Monmouth Real Estate Investment Corp. (MNR)
|Industry:||REIT - Industrial|
Monmouth Real Estate Investment Corp. has a Dividend Yield of 5.84% and Payout Ratio of 139.53% and Operating Profit Margin of 48.21% and Net Margin of 38.56% and Analysts' Rating of 1.50. The short interest was 4.22% as of 05/24/2012. Monmouth Real Estate Investment Corporation (MREIC) is a real estate investment trust. It owns, manages, and leases properties to investment-grade tenants on long-term leases. The firm invests in the public equity and real estate markets of the United States. It primarily invests in industrial properties and holds a portfolio of REIT securities.
3) Breitburn Energy Partners L.P. (BBEP)
|Industry:||Oil & Gas Drilling & Exploration|
Breitburn Energy Partners L.P. has a Dividend Yield of 10.85% and Payout Ratio of 68.74% and Operating Profit Margin of 36.99% and Net Margin of 28.16% and Analysts' Rating of 1.50. The short interest was 0.74% as of 05/24/2012. BreitBurn Energy Partners L.P. engages in the acquisition, exploitation, and development of oil and gas properties in the United States. The company's properties include natural gas, oil, and midstream assets comprising fields in the Antrim Shale in Michigan, and the New Albany Shale in Indiana and Kentucky; and fields in the Evanston and Green River basins in southwestern Wyoming, the Wind river and Big Horn basins in central Wyoming, the Powder River basin in eastern Wyoming, the Los Angeles basin in California, and fields in Florida's Sunniland Trend. As of December 31, 2011, its total estimated proved reserves were 151.
4) Colony Financial, Inc. (CLNY)
|Industry:||REIT - Diversified|
Colony Financial, Inc. has a Dividend Yield of 8.14% and Payout Ratio of 92.79% and Operating Profit Margin of 66.66% and Net Margin of 64.10% and Analysts' Rating of 1.50. The short interest was 4.30% as of 05/24/2012. Colony Financial, Inc. operates as a real estate finance and investment company that focuses primarily on acquiring, originating, and managing commercial mortgage loans, and other commercial real estate-related debt investments. The company has elected to be taxed as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders.
5) Triangle Capital Corporation (TCAP)
Triangle Capital Corporation has a Dividend Yield of 9.52% and Payout Ratio of 64.14% and Operating Profit Margin of 63.67% and Net Margin of 81.42% and Analysts' Rating of 1.50. The short interest was 3.29% as of 05/24/2012. Triangle Capital Corporation is a business development company specializing in private equity and venture capital investments. It focuses on leveraged buyouts, management buyouts, ESOPs, change of control transactions, acquisition financings, growth financing, and recapitalizations in lower middle market companies. The firm prefers to make investments in many business sectors including manufacturing, distribution, transportation, energy, communications, health services, restaurants, media, and others.
*Company profiles were sourced from Finviz. Financial data was sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.