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When senior company executives or directors buy the shares of their company, they are indulging in 'insider buying,' and by law they are required to file the details of these purchases with the Securities and Exchange Commission within two business days, or 48 hours, using Form 4.

The obvious inference of insider buying in a company's shares is that they may be undervalued, or that some event in the future may help to push up prices - the insiders have a shrewd idea of this, and hence are buying the stock.

This article looks at five dividend monsters that have attracted insider buying since April 1st. We define a stock with a dividend yield in excess of 5% as a dividend 'monster.'

Martin Midstream Partners L.P. (MMLP) Price $34.57, Dividend yield 8.9%

Martin Midstream Partners L.P. transports and stores petroleum products across the Gulf Coast region of the United States. The company also operates natural gas storage and pipeline facilities. Its Sulphur Services division processes the sulphur produced by oil refineries. Its marine transportation division operates barges and boats for the transportation of petroleum products.

The company has paid a steady quarterly dividend rising from $0.70 in 2008 to $0.7625 in 2012. However, pay-out ratio, or the proportion of earnings it pays out as dividends, is very high at 299%, and may be difficult to sustain considering the future five year growth in earnings as estimated by analysts is only 2%. However, so far, operating cash flows have been more than sufficient to cover dividend pay-out.

An area of concern is the operating margin ratio which has fallen from 5.2% in 2009 to 3.21% in 2011. Last month two directors of the company, Joe Averett and Scott Massey, purchased shares at around $31 per share. The shares are up 10% since then.

Daktronics Inc. (DAKT) Price $7.88, Dividend Yield 8.10%

Daktronics deals in electronic displays, scoring and timing products, rigging for displays, architectural lighting and display, digital billboards for outdoor advertising and light systems for road management, parking, mass transit and aviation industries.

The company has paid a steady dividend which was $0.10 in 2005 and rose to $0.62 in 2011. It paid $0.115 in June 2012. Its pay-out ratio is a high 310%, and in 2011 the dividend pay-out exceeded its operational cash flow, which may be a warning sign. Future growth in earnings is however estimated by analysts at a robust 10% over the next five years.

Director Frank J Kurtenbach has been buying shares since July 5 when the price was $7.14. Shares are up more than 10% since then.

Franklin Financial Services Corporation (OTCQX:FRAF) Price $13.4, Dividend Yield 7.3%

Franklin Financial Services Corporation is a holding company of the bank Farmers and Merchants Trust Company of Chambersburg which operates in Pennsylvania and provides retail and commercial banking and deposit accounts to all kinds of customers.

FRAF maintained an unbroken record of a $0.27 quarterly dividend from 2008 to Feb 2012. This dividend was cut to $0.17 in May 2012. It pays a reasonable 70% pay-out ratio of earnings as dividends, while operating cash flows have been substantially in excess of dividends paid. Revenues and incomes are fairly stable.

Last month, Officers Michael E Kugler and Karen K Carmack bought shares in the range $13.43 to $13.50, and shares are currently priced about the same.

First Financial Bancorp. (FFBC) Price $16.83, Dividend Yield 6.9%

First Financial Bancorp. is a bank holding company for First Financial Bank, National Association, a provider of banking services such as commercial banking and deposit accounts across Ohio, Indiana and Kentucky.

The company paid dividends of $0.68 in 2008, $0.4 in 2009 and 2010, $0.78 in 2011 and $0.6 for the first two quarters in 2012. The company's pay-out ratio is 85%, while operating cash flows are many times dividend pay-outs, and show a rising trend.

Director Richard E Olszewski bought shares of the company in May at $16.9. Shares are trading around the same level currently.

First Niagara Financial Group, Inc. (FNFG) Price $7.605, Dividend Yield 6.5%

First Niagara Financial Group, Inc. operates as the holding company for First Niagara Bank, N.A. that provides retail and commercial banking, and other financial services to various kinds of customers. It offers various deposit products, including savings, checking, money market, and certificate of deposit accounts; and other kinds of banking products.

It paid a steady quarterly dividend of $0.14 up to August 2010, which was increased to $0.16 by November 2011. However the dividend was halved to $0.08 in each of the first two quarters of 2012.

The pay-out ratio is 93%. Net earnings have shown a rising trend during the fiscal years from 2009 to 2011, and so has operational cash flow which sufficiently covers dividend payments.

Analysts expect earnings growth of 6% over the next five years.

Directors George M Philip, Thomas E Baker and Barbara S Jeremiah bought shares at $9.96 in April. Shares are down about 23% since then.

Source: 5 Dividend Stocks Insiders Are Buying