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5 Diverse Dividend Plays To Look At For Your Portfolio

Jul 6 2012, 11:53 by: Tactical Investor  |  includes: CLF, COST, DIS, LINE, POT

Only stocks that met the following criteria were included in this list. Novice investors would be wise to focus on the following criteria instead of obsessing on the yield factor only. High yields are generally not associated with safe long-term investors, and unusually high yields are usually a sign that all is not well with the company. In addition "our suggested guidelines when searching for new investment ideas" could prove to be useful for novice investors. Almost all the stocks in this article fulfilled the criteria listed in our guide.

  1. Net income should be trending upwards for the past 3 years
  2. Cash flow per share should be rising for the past 3 years
  3. EPS has to be trending upwards for the past 3 years
  4. Sales should be trending upwards for the past 3 years
  5. In general the payout ratio should be below 100%
  6. Interest coverage rate of at least 4.00
  7. A yield of 4.5% or higher or an a 3-5 year projected EPS growth rate of at least 12%
  8. If the company has a positive levered free cash flow, it should be viewed as "icing on the cake"

Company: Cliffs Natural (CLF)

Levered Free Cash Flow = 776.16M

Brief Overview

  1. Percentage Held by Insiders = 0.57
  2. Relative Strength 52 weeks = 19
  3. Cash Flow 5-year Average = 6.08
  4. Profit Margin = 22.86%
  5. Operating Margin = 31.3%
  6. Quarterly Revenue Growth = 6.9%
  7. Quarterly Earnings Growth = -11.2%
  8. Operating Cash Flow = 2.05B
  9. Beta = 2.41
  10. Percentage Held by Institutions = 87.3%
  11. Short Percentage of Float = 7.7%

Growth

  1. Net Income ($mil) 12/2011 = 1619
  2. Net Income ($mil) 12/2010 = 1020
  3. Net Income ($mil) 12/2009 = 205
  4. Net Income Reported Quarterly ($mil) = 376
  5. EBITDA ($mil) 12/2011 = 2913
  6. EBITDA ($mil) 12/2010 = 1695
  7. EBITDA ($mil) 12/2009 = 572
  8. Cash Flow ($/share) 12/2011 = 14.76
  9. Cash Flow ($/share) 12/2010 = 9.91
  10. Cash Flow ($/share) 12/2009 = 2.89
  11. Sales ($mil) 12/2011 = 6794
  12. Sales ($mil) 12/2010 = 4682
  13. Sales ($mil) 12/2009 = 2342
  14. Annual EPS before NRI 12/2007 = 2.57
  15. Annual EPS before NRI 12/2008 = 6.55
  16. Annual EPS before NRI 12/2009 = 1.13
  17. Annual EPS before NRI 12/2010 = 7.49
  18. Annual EPS before NRI 12/2011 = 11.74

Dividend history

  1. Dividend Yield = 5.00
  2. Dividend Yield 5 Year Average = 1.00
  3. Dividend 5 year Growth = 27

Dividend sustainability

  1. Payout Ratio = 0.09
  2. Payout Ratio 5 Year Average 12/2011 = 0.1

Performance

  1. Next 3-5 Year Estimate EPS Growth rate = 7.43
  2. ROE 5 Year Average = 28.06
  3. Current Ratio = 1.15
  4. Current Ratio 5 Year Average = 1.94
  5. Quick Ratio = 0.88
  6. Cash Ratio = 0.68
  7. Interest Coverage = 9.2

Company: Potash Corp. of Saskatchewan, Inc (POT)

  1. Levered free cash flow = $61.1M
  2. Relative Strength 52 weeks = 39
  3. Long term debt to equity ratio = 0.41
  4. Capital spending 5 year growth rate = 38.5%
  5. Sales vs 1 year ago = 33.30%
  6. Short ratio = 1.80%
  7. Quarterly earnings growth = - 32%
  8. Quarterly revenue growth = 20%
  9. Profit Margins = 36.3%
  10. Operating margins = 45.3%
  11. Beta = 0.97
  12. Operating cash flow = $3.17B
  13. Cash Flow 5-year Average = 2.32
  14. 5 year sales growth = 10.2%
  15. EPS 5 year growth rate = 24.5%

Growth

  1. Net Income ($mil) 12/2011 = 3081
  2. Net Income ($mil) 12/2010 = 1775
  3. Net Income ($mil) 12/2009 = 981
  4. Net Income Reported Quarterly ($mil) = 491
  5. EBITDA ($mil) 12/2011 = 4787
  6. EBITDA ($mil) 12/2010 = 3043
  7. EBITDA ($mil) 12/2009 = 1503
  8. Cash Flow ($/share) 12/2011 = 4.16
  9. Cash Flow ($/share) 12/2010 = 2.58
  10. Cash Flow ($/share) 12/2009 = 1.46
  11. Sales ($mil) 12/2011 = 8715
  12. Sales ($mil) 12/2010 = 6539
  13. Sales ($mil) 12/2009 = 3977
  14. Annual EPS before NRI 12/2007 = 1.13
  15. Annual EPS before NRI 12/2008 = 3.67
  16. Annual EPS before NRI 12/2009 = 1.08
  17. Annual EPS before NRI 12/2010 = 2.04
  18. Annual EPS before NRI 12/2011 = 3.51

Dividend history

  1. Dividend Yield = 1.2
  2. Dividend Yield 5 Year Average = 0.4
  3. Dividend 5 year Growth = 24.6%

Dividend sustainability

  1. Payout Ratio = 0.09
  2. Payout Ratio 5 Year Average = 0.08

Performance

  1. Next 3-5 Year Estimate EPS Growth rate = 12.6
  2. 5 Year History EPS Growth = 18.88
  3. ROE 5 Year Average = 33.28
  4. Return on Investment = 24.64
  5. Debt/Total Cap 5 Year Average = 28.56
  6. Current Ratio = 1.10
  7. Current Ratio 5 Year Average = 1.25
  8. Quick Ratio = 0.70
  9. Interest Coverage = 27.7
  10. Retention rate = 91%

Company: Disney Walt (DIS)

Brief Overview

  1. Percentage Held by Insiders = 0.09
  2. 5 year sales growth rate = 2.8%
  3. 5 year EPS growth rate= 2.9%
  4. 5 year Capital spending growth rate = 20.63%
  5. Levered Free Cash Flow = 3.30B
  6. Number of Institutional Sellers 12 Weeks = 2
  7. 3 Month Percentage Chg Short Interest = n/a
  8. Short Ratio = 5.3%
  9. Relative Strength 52 weeks = 87
  10. Cash Flow 5-year Average = 2.88
  11. Profit Margin = 12.46%
  12. Operating Margin = 20.07%
  13. Quarterly Revenue Growth = 6.1%
  14. Quarterly Earnings Growth = 21.3%
  15. Operating Cash Flow = 7.47B
  16. Beta = 114%
  17. Percentage Held by Institutions = 67.1%
  18. Short Percentage of Float = 2.9%

Growth

  1. Net Income ($mil) 12/2011 = 4807
  2. Net Income ($mil) 12/2010 = 3963
  3. Net Income ($mil) 12/2009 = 3307
  4. Net Income Reported Quarterly ($mil) = 1143
  5. EBITDA ($mil) 12/2011 = 10227
  6. EBITDA ($mil) 12/2010 = 8749
  7. EBITDA ($mil) 12/2009 = 7755
  8. Cash Flow ($/share) 12/2011 = 3.6
  9. Cash Flow ($/share) 12/2010 = 3.01
  10. Cash Flow ($/share) 12/2009 = 2.72
  11. Sales ($mil) 12/2011 = 40893
  12. Sales ($mil) 12/2010 = 38063
  13. Sales ($mil) 12/2009 = 36149
  14. Annual EPS before NRI 12/2007 = 1.91
  15. Annual EPS before NRI 12/2008 = 2.27
  16. Annual EPS before NRI 12/2009 = 1.82
  17. Annual EPS before NRI 12/2010 = 2.07
  18. Annual EPS before NRI 12/2011 = 2.54

Dividend history

  1. Dividend Yield = 1.2
  2. Dividend Yield 5 Year Average 12/2011 = 1.18
  3. Annual Dividend 12/2011 = 0.4
  4. Dividend 5 year Growth = 8.22

Dividend sustainability

  1. Payout Ratio 03/2012 = 0.22
  2. Payout Ratio 5 Year Average 12/2011 = 0.18

Performance

  1. Next 3-5 Year Estimate EPS Growth rate = 12.00
  2. ROE 5 Year Average 12/2011 = 11.86
  3. Current Ratio = 1.14
  4. Current Ratio 5 Year Average = 1.14
  5. Quick Ratio = 1.01
  6. Cash Ratio = 0.5
  7. Interest Coverage Quarterly = 20.75

Company: Costco (COST)

Levered Free Cash Flow = 1.30B

Brief Overview

  1. Percentage Held by Insiders = 0.95
  2. Number of Institutional Sellers 12 Weeks = 3
  3. 5 year sales growth rate= 7.49%
  4. 5 year EPS growth rate = 7.29%
  5. Relative Strength 52 weeks = 81
  6. Cash Flow 5-year Average = 4.33
  7. Profit Margin = 1.66%
  8. Operating Margin = 2.7%
  9. Capital Spending rate =- 4.03%
  10. Quarterly Revenue Growth = 8.2%
  11. Quarterly Earnings Growth = 19.1%
  12. Operating Cash Flow = 3.27B
  13. Beta = 0.5
  14. Percentage Held by Institutions = 78.1%
  15. Short Percentage of Float = 1.6%

Growth

  1. Net Income ($mil) 12/2011 = 1462
  2. Net Income ($mil) 12/2010 = 1303
  3. Net Income ($mil) 12/2009 = 1086
  4. Net Income Reported Quarterly ($mil) = 386
  5. EBITDA ($mil) 12/2011 = 3354
  6. EBITDA ($mil) 12/2010 = 2960
  7. EBITDA ($mil) 12/2009 = 2563
  8. Cash Flow ($/share) 12/2011 = 5.29
  9. Cash Flow ($/share) 12/2010 = 4.81
  10. Cash Flow ($/share) 12/2009 = 4.25
  11. Sales ($mil) 12/2011 = 88915
  12. Sales ($mil) 12/2010 = 77946
  13. Sales ($mil) 12/2009 = 71422
  14. Annual EPS before NRI 12/2007 = 2.63
  15. Annual EPS before NRI 12/2008 = 2.91
  16. Annual EPS before NRI 12/2009 = 2.54
  17. Annual EPS before NRI 12/2010 = 2.95
  18. Annual EPS before NRI 12/2011 = 3.3

Dividend history

  1. Dividend Yield = 1.2
  2. Dividend Yield 5 Year Average = 1.2
  3. Dividend 5 year Growth = 12.28

Dividend sustainability

  1. Payout Ratio 03/2012 = 0.3
  2. Payout Ratio 5 Year Average 03/2012 = 0.26

Performance

  1. Next 3-5 Year Estimate EPS Growth rate = 12.85
  2. 5 Year History EPS Growth 03/2012 = 5.99
  3. ROE 5 Year Average 03/2012 = 12.86
  4. ROE 5 Year Average 12/2011 = 12.88
  5. Return on Investment 03/2012 = 11.42
  6. Debt/Total Cap 5 Year Average 03/2012 = 16.06
  7. Current Ratio 03/2012 = 1.18
  8. Current Ratio 12/2011 = 1.16
  9. Current Ratio 5 Year Average = 1.12
  10. Quick Ratio = 0.59
  11. Cash Ratio = 0.51
  12. Interest Coverage Quarterly = 33.74
  13. Retention rate= 70%

Company: Lin Energy LLC (LINE)

Brief Overview

  1. Levered free cash flow = $127 million
  2. Percentage Held by Insiders = 1.24
  3. 5 year sales growth rate= 32.84%
  4. Profit Margin = 68.5%
  5. Operating Margin = 92.5%
  6. Capital Spending rate =- 4.03%
  7. Quarterly Revenue Growth = 44.9%
  8. 5 year capital spending growth rate = 9.09%
  9. Long term debt to equity = 1.22
  10. Operating Cash Flow = $446 million
  11. Beta = 0.91
  12. Percentage Held by Institutions = 78.1%
  13. Short Percentage of Float = 0.8%

Growth

  1. Net Income ($mil) 12/2011 = 438
  2. Net Income ($mil) 12/2010 = -114
  3. Net Income ($mil) 12/2009 = -298
  4. Cash Flow ($/share) 12/2011 = 3.8
  5. Cash Flow ($/share) 12/2010 = 3.08
  6. Cash Flow ($/share) 12/2009 = 3.31
  7. Sales ($mil) 12/2011 = 1162
  8. Sales ($mil) 12/2010 = 690
  9. Sales ($mil) 12/2009 = 273
  10. Annual EPS before NRI 12/2009 = 1.73
  11. Annual EPS before NRI 12/2010 = 1.54
  12. Annual EPS before NRI 12/2011 = 1.79

Dividend history

  1. Dividend Yield = 7.5%
  2. Dividend Yield 5 Year Average = 9.9
  3. Dividend 5 year Growth = 7.44
  4. Payout ratio = 0.56

Performance

  1. Next 3-5 Year Estimate EPS Growth rate = 4.9
  2. Current Ratio = 1.4
  3. Current Ratio 5 Year Average = 1.9
  4. Quick Ratio = 0.5
  5. Interest = 4.2
  6. Retention rate = 44%

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.

Additional disclosure: 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.

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