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 that are rearing to grow, due to their reliable profitability? Are you also in search of attractive dividends along the way? If the answer is 'yes', here are some interesting ideas to get you started.
EPS growth (earnings per share growth) illustrates the growth of earnings per share over time. EPS growth rates help investors identify stocks that are increasing or decreasing in profitability. This profitability metric is generally a key driver in the price of the stock as it directly correlates to the profitability of the company as a whole.
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.
EPS growth (earnings per share growth) illustrates the growth of earnings per share over time. The 1-Year Expected EPS Growth Rate is an annual growth estimate, where the growth projections are made by analysts, the company or other credible sources.
We first looked for small cap stocks with a very high yield (more than 10%). We then looked for businesses that have strong profitability (1-year fiscal EPS Growth Rate>10%)(1-year operating margin>15%). We then looked for businesses with projected high growth, measured by 1-year projected EPS growth above 25%. We did not screen out any sectors.
Do you think these small-cap stocks have what it takes to grow? Use our list to help with your own analysis.
1) Breitburn Energy Partners L.P. (BBEP)
|Industry:||Oil & Gas Drilling & Exploration|
Breitburn Energy Partners L.P. has a Dividend Yield of 10.90% and Payout Ratio of 68.74% and Earnings Per Share Growth Rate of 193.60% and Operating Profit Margin of 36.99% and 1-Year Projected Earnings Per Share Growth Rate of 102.86%. The short interest was 0.73% as of 05/29/2012.
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.
2) NorthStar Realty Finance Corp. (NRF)
|Industry:||REIT - Retail|
NorthStar Realty Finance Corp. has a Dividend Yield of 11.30% and Payout Ratio of - and Earnings Per Share Growth Rate of 39.81% and Operating Profit Margin of 29.98% and 1-Year Projected Earnings Per Share Growth Rate of 175.00%. The short interest was 8.08% as of 05/29/2012.
NorthStar Realty Finance Corp. operates as a real estate investment trust in the United States. It invests in real estate debt business, which acquires, originates, and structures debt investments secured primarily by income-producing real estate properties; real estate securities business that invests in commercial real estate debt securities, including commercial mortgage backed securities, REIT unsecured debt, and credit tenant loans; and net lease properties business, which acquires properties that are primarily net leased to corporate tenants. The company has elected to be taxed as a REIT and it would not be subject to federal income tax, provided it distributes at least 90% of its taxable income to its shareholders.
3) QR Energy, LP (QRE)
|Industry:||Independent Oil & Gas|
QR Energy, LP has a Dividend Yield of 11.23% and Payout Ratio of 420.63% and Earnings Per Share Growth Rate of 160.19% and Operating Profit Margin of 21.33% and 1-Year Projected Earnings Per Share Growth Rate of 91.70%. The short interest was 0.41% as of 05/29/2012.
QR Energy, LP, through its subsidiary, QRE Operating, LLC, engages in the acquisition, exploitation, development, and production of onshore crude oil and natural gas properties in the United States. As of December 31, 2011, its properties consisted of working interests in 3,867 gross producing wells located in Texas, New Mexico, Arkansas, Louisiana, southwestern Kansas, Oklahoma, Florida, and Alabama. It also had estimated net proved reserves of 34.
*Company profiles were sourced from Finviz. Financial data was sourced from Yahoo Finance.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.