Are you interested in stocks paying moderate, sustainable dividend income? Are you searching for stocks with solid yields of 3% and greater? One great place to search is among companies that can sustain their payouts due to strong sources of profitability, matched with positive analyst recommendations. Today we screened for stocks with these traits, and came up with a diverse list.
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. 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.
We first looked for dividend stocks. We then looked for businesses that analysts rate as "Buy" (2 < mean recommendation < 3). From here, we then looked for companies with strong profit margins (1-year operating margin>15%)(1-year fiscal EPS growth rate>10%). We did not screen out any market caps or sectors.
Do you think these stocks should have higher valuations? Please use our list to assist with your own analysis.
1) US Ecology, Inc. (ECOL)
US Ecology, Inc. has a Dividend Yield of 4.08%, a Payout Ratio of 66.92%, an Analysts' Rating of 2.50, an Operating Profit Margin of 22.24%, and an Earnings Per Share Growth Rate of 45.71%. The short interest was 3.82% as of 07/09/2012. US Ecology, Inc., through its subsidiaries, provides waste treatment, disposal, recycling, and transportation services to commercial and government entities in the United States. The company offers treatment and disposal services for radioactive, hazardous, polychlorinated biphenyl, and non-hazardous industrial wastes. Its customers include oil refineries, chemical production facilities, manufacturers, electric utilities, steel mills, biotechnology companies, military installations, waste brokers/aggregators and medical and academic institutions.
2) Provident Financial Services, Inc. (PFS)
|Industry:||Savings & Loans|
Provident Financial Services, Inc. has a Dividend Yield of 3.35%, a Payout Ratio of 43.74%, an Analysts' Rating of 2.50, an Operating Profit Margin of 33.50%, and an Earnings Per Share Growth Rate of 14.77%. The short interest was 3.85% as of 07/09/2012. Provident Financial Services, Inc. operates as the holding company for The Provident Bank that provides banking services to individuals, families and businesses in New Jersey. The company accepts various deposit products, including savings, checking, interest-bearing checking, money market deposit, certificate of deposit, and KEOGH accounts, as well as IRAs. It also originates commercial real estate loans that are secured by income-producing properties, such as multifamily residences, office buildings, and retail and industrial properties; commercial business loans; construction loans for single family and condominium projects; fixed-rate and adjustable-rate mortgage loans collateralized by one- to four-family residential real estate; and other consumer loans consisting of home equity loans and home equity lines of credit.
3) BlackRock, Inc. (BLK)
BlackRock, Inc. has a Dividend Yield of 3.50%, a Payout Ratio of 33.39%, an Analysts' Rating of 2.40, an Operating Profit Margin of 36.10%, and an Earnings Per Share Growth Rate of 17.26%. The short interest was 1.19% as of 07/09/2012. BlackRock, Inc. is a publicly owned investment manager. The firm primarily provides its services to institutional, intermediary, and individual investors. It also manages accounts for corporate, public, union and industry pension plans, insurance companies, third-party mutual funds, endowments, foundations, charities, corporations, official institutions and banks.
4) American National Bankshares Inc. (AMNB)
|Industry:||Regional - Mid-Atlantic Banks|
American National Bankshares Inc. has a Dividend Yield of 3.90%, a Payout Ratio of 49.10%, an Analysts' Rating of 2.30, an Operating Profit Margin of 34.39%, and an Earnings Per Share Growth Rate of 21.53%. The short interest was 1.21% as of 07/09/2012. American National Bankshares Inc. operates as the bank holding company for American National Bank and Trust Company that provides various financial products and services to individuals and businesses in Virginia, and North Carolina. Its deposit products primarily include checking, money market, savings, demand, and consumer time deposits, as well as certificates of deposit. The company's loan portfolio consists primarily of commercial and residential real estate loans, commercial loans to small and medium-sized businesses, construction and land development loans, home equity loans, residential first and second mortgage loans, consumer loans and agricultural loans.
5) Spectra Energy Corp. (SE)
|Industry:||Oil & Gas Pipelines|
Spectra Energy Corp. has a Dividend Yield of 3.84%, a Payout Ratio of 62.19%, an Analysts' Rating of 2.30, an Operating Profit Margin of 32.65%, and an Earnings Per Share Growth Rate of 10.61%. The short interest was 1.37% as of 07/09/2012. Spectra Energy Corp engages in the ownership and operation of a portfolio of natural gas-related energy assets in North America. The company's U.S. Transmission segment engages in the transportation and storage of natural gas for customers in various regions of the northeastern and southeastern United States and the Maritime provinces in Canada.
6) CNB Financial Corp. (CCNE)
|Industry:||Regional - Northeast Banks|
CNB Financial Corp. has a Dividend Yield of 3.94%, a Payout Ratio of 50.53%, an Analysts' Rating of 2.50, an Operating Profit Margin of 36.10%, and an Earnings Per Share Growth Rate of 15.34%. The short interest was 3.21% as of 07/09/2012. CNB Financial Corporation operates as the bank holding company for CNB Bank that provides various banking products and services in Pennsylvania. It accepts a range of deposit products, which comprise checking, savings, time deposit, and demand accounts, as well as certificates of deposit. The company's loan portfolio includes commercial, industrial, agricultural, commercial mortgage, residential real estate, and consumer loans, as well as overdrafts and credit cards. It also provides trust and asset management services comprising the administration of trusts and estates, retirement plans, and other employee benefit plans, as well as a range of wealth management services.
7) Statoil ASA (STO)
|Industry:||Major Integrated Oil & Gas|
Statoil ASA has a Dividend Yield of 4.59%, a Payout Ratio of 25.53%, an Analysts' Rating of 2.40, an Operating Profit Margin of 30.68%, and an Earnings Per Share Growth Rate of 107.38%. The short interest was 0.36% as of 07/09/2012. Statoil ASA, an integrated energy company, engages in the exploration, production, transportation, refining, and marketing of petroleum and petroleum-derived products in Norway and internationally. The company is involved in the exploration, development, and production of crude oil and natural gas, as well as extraction of natural gas liquids. It also transports and markets natural gas and natural gas products; and engages in petroleum refining operations, as well as marketing crude oil and refined petroleum products.
Company profiles were sourced from Finviz. Financial data was sourced from Finviz and Yahoo Finance.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.