Are you looking for mid-sized companies that still have room to grow? Do you prefer stocks that pay high dividend yields, but also have sustainable payout ratios to boot? Today we focused on basic materials stocks with these traits, but ones that also have strong profits fueling their growth. If stocks of this nature seem interesting, we think you'll like the list we came up with.
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.
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 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 mid cap basic materials stocks with a very high yield (more than 5%). We then screened for businesses with projected high growth, measured by 1-year projected EPS growth above 25%. From here, we then looked for companies that have strong profitability (1-year fiscal EPS Growth Rate>10%)(Net Margin [TTM]>10%).
Do you think these mid-cap stocks have strong operations? Use our list along with your own analysis.
1) Linn Energy, LLC (NASDAQ:LINE)
|Industry:||Independent Oil & Gas|
Linn Energy, LLC has a Dividend Yield of 7.95%, a Payout Ratio of 57.07%, a 1-Year Projected Earnings Per Share Growth Rate of 31.11%, a Earnings Per Share Growth Rate of 413.15%, and a Net Margin of 41.79%. The short interest was 1.03% as of 06/07/2012. Linn Energy, LLC, an independent oil and natural gas company, engages in the acquisition and development of oil and gas properties. The company's properties are primarily located in the Mid-Continent, the Permian Basin, Michigan, California, and the Williston Basin in the United States. As of December 31, 2011, it had proved reserves of 3,370 billion cubic feet equivalent of oil and gas, and natural gas liquids, as well as operated 7,759 gross productive wells.
2) Companhia Siderurgica Nacional (NYSE:SID)
|Industry:||Steel & Iron|
Companhia Siderurgica Nacional has a Dividend Yield of 6.28%, a Payout Ratio of 183.39%, a 1-Year Projected Earnings Per Share Growth Rate of 45.70%, a Earnings Per Share Growth Rate of 47.28%, and a Net Margin of 26.99%. The short interest was 1.40% as of 06/07/2012. Companhia Siderurgica Nacional primarily operates as an integrated steel producer in Brazil and Latin America. The company principally produces carbon steel and various steel products. Its products include slabs, which are semi-finished products used for processing hot-rolled, cold-rolled, or coated coils and sheet products; hot-rolled products that comprise heavy-gauge hot-rolled coils and sheets, and light-gauge hot-rolled coils and sheets; cold-rolled products, including cold-rolled coils and sheets; and galvanized products consisting of flat-rolled steel coated with zinc or a zinc-based alloy.
3) MarkWest Energy Partners LP (NYSE:MWE)
|Industry:||Oil & Gas Drilling & Exploration|
MarkWest Energy Partners LP has a Dividend Yield of 6.47%, a Payout Ratio of 159.32%, a 1-Year Projected Earnings Per Share Growth Rate of 40.59%, a Earnings Per Share Growth Rate of 6353.29%, and a Net Margin of 12.38%. The short interest was 0.39% as of 06/07/2012. Markwest Energy Partners, L.P., together with its subsidiaries, engages in the gathering, processing, and transportation of natural gas in the southwest, Gulf Coast, and northeast regions of the United States.
4) Cliffs Natural Resources Inc. (NYSE:CLF)
|Industry:||Steel & Iron|
Cliffs Natural Resources Inc. has a Dividend Yield of 5.15%, a Payout Ratio of 8.82%, a 1-Year Projected Earnings Per Share Growth Rate of 25.48%, a Earnings Per Share Growth Rate of 54.55%, and a Net Margin of 26.16%. The short interest was 5.95% as of 06/07/2012. Cliffs Natural Resources Inc., a mining and natural resources company, engages in the production of iron ore pellets, fines and lump ore, and metallurgical coal. It operates five iron ore mines located in Michigan and Minnesota; five metallurgical coal mines located in West Virginia and Alabama; and one thermal coal mine located in West Virginia. The company also operates two iron ore mines in eastern Canada that primarily provide iron ore to steel producers in Asia; and two iron ore mining complexes in Western Australia.
5) Alumina Ltd. (AWC)
Alumina Ltd. has a Dividend Yield of 6.06%, a Payout Ratio of 134.91%, a 1-Year Projected Earnings Per Share Growth Rate of 3450.00%, a Earnings Per Share Growth Rate of 266.01%, and a Net Margin of 63300.00%. The short interest was 0.13% as of 06/07/2012. Alumina Limited, through its 40% equity interest in Alcoa World Alumina and Chemicals, engages in the bauxite mining, alumina refining, and aluminum smelting businesses. It has interests in eight alumina refineries and eight bauxite mines, as well as operates two aluminum smelters in Victoria, Australia. The company also owns interests in a network of mines, refineries, and smelters in the United States, Guinea, Suriname, Jamaica, Brazil, and Spain. In addition, it owns and operates a shipping operation that transports alumina, aluminum, and raw materials worldwide.
*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.