Dividend stocks with high to very high yields are attention grabbing in themselves. When these companies also have significant growth projections and are backed up by solid profit margins, they are worthy of a deeper look. Today we have a list of companies with all of these appealing characteristics. We think you will be interested in what we found.
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.
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 company 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.
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.
We first looked for stocks with a very high yield (more than 5%). We then looked for businesses with strong profit margins (1-year operating margin>15%)(Net Margin [TTM]>10%). We then screened for businesses that have expected earnings per share growth of more than 25 percent for next year(1-year projected EPS Growth Rate>25%). We did not screen out any market caps or sectors.
Do you think these stocks are undervalued and have room to trade higher? Use our list along with your own analysis.
1) Linn Energy, LLC (LINE)
|Industry:||Independent Oil & Gas|
Linn Energy, LLC has a Dividend Yield of 7.32%, a Payout Ratio of 57.07%, an Operating Profit Margin of 55.74%, a Net Margin of 41.79%, and a 1-Year Projected Earnings Per Share Growth Rate of 34.19%. The short interest was 1.31% as of 08/01/2012. 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) Transportadora de Gas Del Sur S.A. (NYSE:TGS)
Transportadora de Gas Del Sur S.A. has a Dividend Yield of 87.01%, an Operating Profit Margin of 27.55%, a Net Margin of 11.63%, and a 1-Year Projected Earnings Per Share Growth Rate of 100.00%. The short interest was 0.33% as of 08/01/2012. Transportadora de Gas del Sur S.A. engages in the transportation of natural gas primarily in Latin America. The company transports its natural gas to distribution companies, industries, traders, producers, and power plant operators, as well as for natural gas end users through operating approximately 8627 kilometers pipeline system. It is also involved in the production and commercialization of natural gas liquids, including ethane, propane, butane, and natural gasoline in Argentina and internationally.
3) Costamare Inc. (NYSE:CMRE)
Costamare Inc. has a Dividend Yield of 8.29%, a Payout Ratio of 76.24%, a Operating Profit Margin of 44.01%, a Net Margin of 22.40%, and a 1-Year Projected Earnings Per Share Growth Rate of 25.74%. The short interest was 1.28% as of 08/01/2012. Costamare, Inc. owns and charters containerships to liner companies. Its fleet consists of 56 containerships with a total capacity of approximately 324,000 TEU. The company was founded in 1975 and is based in Athens, Greece.
4) Capital Product Partners L.P. (NASDAQ:CPLP)
Capital Product Partners L.P. has a Dividend Yield of 11.74%, a Payout Ratio of 59.08%, an Operating Profit Margin of 83.20%, a Net Margin of 61.72%, and a 1-Year Projected Earnings Per Share Growth Rate of 85.71%. The short interest was 0.32% as of 08/01/2012. Capital Product Partners L.P., a shipping company, provides seaborne transportation services of crude oil, refined petroleum products, edible oils, and soft chemicals. The company provides marine transportation services under short-term voyage charters and medium- to long-term time and bareboat charters. Its vessels carry crude oil, and refined oil products, such as gasoline, diesel, fuel oil, and jet fuel, as well as edible oils and chemicals comprising ethanol.
*Company profiles were sourced from Finviz. Financial data was sourced from Google Finance and Yahoo Finance.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.