6 Dividend Stocks With 10%+ Yields Backed By High Profits And Analyst Confidence

|
 |  Includes: AGNC, ANH, ARI, BBEPQ, CMO, DX
by: ZetaKap

If you are a dividend investor, it's all about yield. But what good is yield if the company can't sustain it's dividends? A smart dividend investor not only tracks yield, but also looks for sustainable payout ratios, among other important signs that the company is not breaking the bank. Profits are telling. As are analyst ratings. Keeping these ideas in mind, we ran a screen you might be interested in.

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

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.

We first looked for stocks that have a very high dividend yield (Div. Yield > 10%). We next screened for businesses that have strong bottom line profitability (Net Margin [TTM]>10%)(1-year operating margin>15%). We then looked for businesses that analysts rate as "Buy" (2 < mean recommendation < 3). We did not screen out any market caps or sectors.

Do you think these stocks should be trading higher? Use this list as a starting-off point for your own analysis.

1) American Capital Agency Corp. (NASDAQ:AGNC)

Sector: Financial
Industry: REIT - Residential
Market Cap: $9.69B
Beta: 0.42
Click to enlarge

American Capital Agency Corp. has a Dividend Yield of 15.48% and Payout Ratio of 81.17% and Net Margin of 87.63% and Operating Profit Margin of 88.19% and Analysts' Rating of 2.00. The short interest was 1.88% as of 06/04/2012. American Capital Agency Corp. operates as a real estate investment trust (REIT). It invests in residential mortgage pass-through securities and collateralized mortgage obligations for which the principal and interest payments are guaranteed by government-sponsored entities or by the United States government agency. The company funds its investments primarily through short-term borrowings structured as repurchase agreements.

2) Breitburn Energy Partners L.P. (BBEP)

Sector: Basic Materials
Industry: Oil & Gas Drilling & Exploration
Market Cap: $1.14B
Beta: 0.87
Click to enlarge

Breitburn Energy Partners L.P. has a Dividend Yield of 11.06% and Payout Ratio of 68.74% and Net Margin of 28.16% and Operating Profit Margin of 36.99% and Analysts' Rating of 1.60. The short interest was 0.73% as of 06/04/2012. 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.

3) Dynex Capital Inc. (NYSE:DX)

Sector: Financial
Industry: Mortgage Investment
Market Cap: $499.93M
Beta: 0.45
Click to enlarge

Dynex Capital Inc. has a Dividend Yield of 12.17% and Payout Ratio of 105.02% and Net Margin of 49.91% and Operating Profit Margin of 50.23% and Analysts' Rating of 2.20. The short interest was 5.91% as of 06/04/2012. Dynex Capital, Inc. operates as a mortgage real estate investment trust (REIT). It invests in residential and commercial mortgage-backed securities issued or guaranteed by a federally chartered corporation, non-agency mortgage-backed securities, and securitized mortgage loans, as well as unsecuritized single-family and commercial mortgage loans. The company finances its investments through a combination of repurchase agreements, and non-recourse collateralized financing, such as securitization financing.

4) Anworth Mortgage Asset Corporation (NYSE:ANH)

Sector: Financial
Industry: REIT - Diversified
Market Cap: $910.94M
Beta: 0.20
Click to enlarge

Anworth Mortgage Asset Corporation has a Dividend Yield of 12.65% and Payout Ratio of 104.15% and Net Margin of 54.81% and Operating Profit Margin of 54.81% and Analysts' Rating of 2.20. The short interest was 3.80% as of 06/04/2012. Anworth Mortgage Asset Corporation is a publicly owned real estate investment trust. The firm invests in the fixed income and real estate markets of the United States. It primarily invests in United States agency mortgage-backed securities issued or guaranteed by United States government sponsored entities including mortgage pass-through certificates, collateralized mortgage obligations, and other real estate securities, on a leveraged basis.

5) Apollo Commercial Real Estate Finance, Inc. (NYSE:ARI)

Sector: Financial
Industry: REIT - Diversified
Market Cap: $326.24M
Beta: -
Click to enlarge

Apollo Commercial Real Estate Finance, Inc. has a Dividend Yield of 10.09% and Payout Ratio of 107.95% and Net Margin of 52.82% and Operating Profit Margin of 54.63% and Analysts' Rating of 2.10. The short interest was 4.47% as of 06/04/2012. Apollo Commercial Real Estate Finance, Inc. operates as a commercial real estate finance company in the United States. It originates, acquires, invests in, and manages performing commercial first mortgage loans, commercial mortgage-backed securities, mezzanine financings, and other commercial real estate-related debt investments. The company is qualified as a real estate investment trust (REIT) under the Internal Revenue Code.

6) Capstead Mortgage Corp. (NYSE:CMO)

Sector: Financial
Industry: REIT - Diversified
Market Cap: $1.27B
Beta: 0.47
Click to enlarge

Capstead Mortgage Corp. has a Dividend Yield of 12.68% and Payout Ratio of 103.26% and Net Margin of 66.67% and Operating Profit Margin of 66.67% and Analysts' Rating of 2.20. The short interest was 4.58% as of 06/04/2012. Capstead Mortgage Corporation operates as a self-managed real estate investment trust. It invests in leveraged portfolio of residential mortgage pass-through securities consisting of adjustable-rate mortgage securities issued and guaranteed by government-sponsored enterprises or by an agency of the federal government. The company qualifies 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.

*Company profiles were sourced from Finviz. Financial data was sourced from Google Finance and Yahoo Finance.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.