This list is meant to serve as a starting point for investors. A lot of data has been provided so it should be relatively easy for an investor to scroll down the list and decide if the stock warrants further attention or not. If you decide that you like the stock, you can dig deeper and see if it meets with your investment criteria. We do provide detailed analysis on individual stocks under the dividend investment, basic material and other various categories. To help the novice investor we have put out this guideline which could prove to be useful in the selection process. "Our suggested guidelines when searching for new investment ideas."
Company: Abbott Labs (ABT)
Brief Overview
- Levered free cash flow = $8.85 billion
- Profit Margin = 13%
- Operating Margin = 21%
- Quarterly Revenue Growth = 4.6%
- Quarterly Earnings Growth = 43%
- Operating Cash Flow = $9.18 Billion
- Beta = 0.38
- Percentage Held by Institutions = 67%
- Short Percentage of Float = 1.5%
Growth
- Net Income ($mil) 12/2011 = 4728
- Net Income ($mil) 12/2010 = 4626
- Net Income ($mil) 12/2009 = 5746
- EBITDA ($mil) 12/2011 = 8773
- EBITDA ($mil) 12/2010 = 8890
- EBITDA ($mil) 12/2009 = 9803
- Cash Flow ($/share) 12/2011 = 6.66
- Cash Flow ($/share) 12/2010 = 5.9
- Cash Flow ($/share) 12/2009 = 5.1
- Sales ($mil) 12/2011 = 38851
- Sales ($mil) 12/2010 = 35167
- Sales ($mil) 12/2009 = 30765
- Annual EPS before NRI 12/2007 = 2.84
- Annual EPS before NRI 12/2008 = 3.32
- Annual EPS before NRI 12/2009 = 3.73
- Annual EPS before NRI 12/2010 = 4.17
- Annual EPS before NRI 12/2011 = 4.67
Dividend history
- Dividend Yield = 3.3
- Dividend Yield 5 Year Average = 3.00
- Dividend 5 year Growth = 9.7
Dividend sustainability
- Payout Ratio = 0.59
- Payout Ratio 5 Year Average = 0.44
Performance
- Next 3-5 Year Estimate EPS Growth rate = 7.68
- 5 Year History EPS Growth = 13.58
- ROE 5 Year Average = 28.51
- Current Ratio = 1.50
- Current Ratio 5 Year Average = 1.43
- Quick Ratio = 1.00
- Cash Ratio = 0.83
- Interest Coverage = 12.00
Suggested strategy
Consider waiting for a test of the 59-60 ranges before jumping in.
Company: Telefonica S.A. (TEF)
Levered Free Cash Flow = 6.16B
Brief Overview
- Percentage Held by Insiders = 0.01
- Relative Strength 52 weeks = 21
- Cash Flow 5-year Average = 2.11
- Profit Margin = 7.06%
- Operating Margin = 17.82%
- Quarterly Revenue Growth = 0.7%
- Quarterly Earnings Growth = -53.9%
- Operating Cash Flow = 0.0164
- Beta = 1.56
- Short ratio = 1.8%
Growth
- Net Income ($mil) 12/2011 = 8617
- Net Income ($mil) 12/2010 = 13375
- Net Income ($mil) 12/2009 = 11072
- Net Income Reported Quarterly ($mil) = 969
- EBITDA ($mil) 12/2011 = 9036
- EBITDA ($mil) 12/2010 = 18459
- EBITDA ($mil) 12/2009 = 14490
- Cash Flow ($/share) 12/2011 = 1.55
- Cash Flow ($/share) 12/2010 = 2.18
- Cash Flow ($/share) 12/2009 = 2.32
- Sales ($mil) 12/2011 = 84277
- Sales ($mil) 12/2010 = 83649
- Sales ($mil) 12/2009 = 79140
- Annual EPS before NRI 12/2007 = 0.61
- Annual EPS before NRI 12/2002 = 2.03
- Annual EPS before NRI 12/2009 = 2.33
- Annual EPS before NRI 12/2010 = 6.6
- Annual EPS before NRI 12/2011 = 4.71
Dividend history
- Dividend Yield = 11.10
- Dividend Yield 5 Year Average = 5.8
- Dividend 5 year Growth = 19.4%
Dividend sustainability
- Payout Ratio = 1.27
- Payout Ratio 5 Year Average = 0.44
Performance
- Next 3-5 Year Estimate EPS Growth rate = 11.11
- ROE 5 Year Average = 40.33
- Current Ratio = 0.72
- Current Ratio 5 Year Average = 0.73
- Quick Ratio = 0.6
- Cash Ratio = 0.26
- Interest Coverage Quarterly = 2.20
Notes
At this point in time, only individuals willing to take on some risk should consider opening positions in this play. Its payout ratio has spiked significantly from its five year average. Its 5 year average payout ratio is 44%. The current payout ratio is 127%. It also has high long term debt to equity ratio of 2.61 and mediocre interest coverage ratio of 2.20. It also sports a rather weak current ratio of 0.60. If you are going to take a risk with this play, consider waiting for a test of the 10.00 ranges before deploying money into it.
Company: Deere & Co (DE)
Growth
- Net Income ($mil) 12/2011 = 2800
- Net Income ($mil) 12/2010 = 1865
- Net Income ($mil) 12/2009 = 874
- EBITDA ($mil) 12/2011 = 5897
- EBITDA ($mil) 12/2010 = 4779
- EBITDA ($mil) 12/2009 = 3544
- Cash Flow ($/share) 12/2011 = 8.98
- Cash Flow ($/share) 12/2010 = 6.93
- Cash Flow ($/share) 12/2009 = 5.6
- Sales ($mil) 12/2011 = 32013
- Sales ($mil) 12/2010 = 26005
- Sales ($mil) 12/2009 = 23112
- Annual EPS before NRI 12/2007 = 4.01
- Annual EPS before NRI 12/2008 = 4.7
- Annual EPS before NRI 12/2009 = 2.84
- Annual EPS before NRI 12/2010 = 4.65
- Annual EPS before NRI 12/2011 = 6.63
Dividend history
- Dividend Yield = 2.5
- Dividend Yield 5 Year Average = 2.10
- Dividend 5 year Growth = 13.36
Dividend sustainability
- Payout Ratio = 0.23
- Payout Ratio 5 Year Average = 0.28
Performance
- Next 3-5 Year Estimate EPS Growth rate = 12.06
- 5 Year History EPS Growth = 9.62
- ROE 5 Year Average 28.45
- Current Ratio = 2.03
- Current Ratio 5 Year Average = 1.97
- Quick Ratio = 1.8
- Cash Ratio = 1.54
- Interest Coverage Quarterly = 6.4
Suggested strategy
Long term this is a pretty good play but on the short term, time frames consider waiting for a test of the 69-70 ranges before committing fresh money to this play.
Company : Philip Morris (PM)
Levered Free Cash Flow = 9.00B
Brief Overview
- Relative Strength 52 weeks = 86
- Cash Flow 5-year Average = 4.2
- Profit Margin = 27.82%
- Operating Margin = 43.55%
- Quarterly Revenue Growth = 9.7%
- Quarterly Earnings Growth = 12.6%
- Operating Cash Flow = 10.03B
- Beta = 0.87
- Percentage Held by Institutions = 1.1%
- Short Percentage of Float = 0.5%
Growth
- Net Income ($mil) 12/2011 = 8591
- Net Income ($mil) 12/2010 = 7259
- Net Income ($mil) 12/2009 = 6342
- Net Income Reported Quarterly ($mil) = 2161
- EBITDA ($mil) 12/2011 = 14325
- EBITDA ($mil) 12/2010 = 12132
- EBITDA ($mil) 12/2009 = 10893
- Cash Flow ($/share) 12/2011 = 5.55
- Cash Flow ($/share) 12/2010 = 4.46
- Cash Flow ($/share) 12/2009 = 3.83
- Sales ($mil) 12/2011 = 76346
- Sales ($mil) 12/2010 = 67713
- Sales ($mil) 12/2009 = 62080
- Annual EPS before NRI 12/2007 = 2.8
- Annual EPS before NRI 12/2008 = 3.24
- Annual EPS before NRI 12/2009 = 3.29
- Annual EPS before NRI 12/2010 = 3.87
- Annual EPS before NRI 12/2011 = 4.88
Dividend history
- Dividend Yield = 3.7
- Dividend Yield 5 Year Average = 4.26
Dividend sustainability
- Payout Ratio = 0.59
- Payout Ratio 5 Year Average = 0.66
Performance
- Next 3-5 Year Estimate EPS Growth rate = 9.33
- ROE 5 Year Average = 163.7
- Current Ratio = 1
- Current Ratio 5 Year Average = 1.28
- Quick Ratio = 0.46
- Cash Ratio = 0.24
- Interest Coverage Quarterly = 15.98
Suggested strategy
Consider waiting for a test of the $80.00 ranges before jumping in. Another strategy would be to sell Jan2013 puts at 80 or lower on a test of 81. If you are assigned the shares, your final cost is most likely to be well below $76.00. In fact, if you sold the Jan 2013, 80 puts right now, and the shares were assigned to your account, your cost would be roughly $76.00.
Conclusion
The markets are still in a corrective phase and there is a decent chance that this stock could test its recent lows again before trending higher. In general the markets should trend higher into the third quarter. Investors looking for other ideas might find this article to be of interest "Apache: A Great Low Risk Way To Open Up A Second Income stream."
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.
Disclaimer: It is imperative that you do your due diligence and then determine if the above plays meets with your risk tolerance levels. The Latin maxim caveat emptor applies-let the buyer beware
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
