When you want to add a dose of reliability to your portfolio, high-yield dividends are a practical route. When these companies are earning consistently strong profits, the investor is the one who brings home larger payouts. Today we ran a screen across all sectors to find companies that fit this bill. Our list was further reduced to include those that have been rated as 'Buy' by analysts. We think you will find our list rather interesting.
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.
Return on Equity [ROE] is one way to identify great potential names relative to profitability. This ratio illustrates the percentage return on shareholder equity. As well, this metric segments the company into operational efficiency, asset use efficiency, and financial leverage. Why does this matter? Simply put, it allows investors to get a real picture of how the company is generating these returns and helps identify parts of the company that may be underperforming.
We first looked for stocks that have a high-dividend yield (Div. Yield > 5%). From here, we then looked for companies that analysts rate as "Buy" (2 < mean recommendation < 3). We then screened for businesses that have shown strong bottom line growth over the last year (1-year fiscal EPS growth rate>10%)(ROE [TTM]>30%). We did not screen out any market caps or sectors.
Do you think these stocks have more value to price in? Use our list to help with your own analysis.
1) Alliance Resource Partners LP (ARLP)
|Industry:||Industrial Metals & Minerals|
Alliance Resource Partners LP has a Dividend Yield of 6.58%, a Payout Ratio of 49.02%, an Analysts' Rating of 2.00, an Earnings Per Share Growth Rate of 21.60%, and a Return on Equity of 32.88%. The short interest was 1.55% as of 08/02/2012. Alliance Resource Partners, L.P. engages in the production and marketing of coal primarily to utilities and industrial users in the United States.
2) Legacy Reserves Lp (LGCY)
|Industry:||Oil & Gas Drilling & Exploration|
Legacy Reserves Lp has a Dividend Yield of 8.48%, a Payout Ratio of 69.41%, an Analysts' Rating of 1.70, an Earnings Per Share Growth Rate of 508.12%, and a Return on Equity of 35.93%. The short interest was 0.52% as of 08/02/2012. Legacy Reserves LP, an independent oil and natural gas limited partnership, engages in the acquisition and development of oil and natural gas properties primarily located in the Permian Basin, Mid-Continent, and Rocky Mountain regions of the United States. As of December 31, 2011, it owned interests in producing oil and natural gas properties in 498 fields primarily in the Permian Basin, Texas Panhandle, Wyoming, and Oklahoma; non-operated interests in 3,483 gross productive wells, as well as operated 2,473 gross productive wells.
3) Cedar Fair, L.P. (FUN)
Cedar Fair, L.P. has a Dividend Yield of 5.20%, a Payout Ratio of 79.73%, an Analysts' Rating of 1.80, an Earnings Per Share Growth Rate of 326.25%, and a Return on Equity of 140.35%. The short interest was 0.35% as of 08/02/2012. Cedar Fair, L.P. owns and operates amusement and water parks in the United States and Canada. Its amusement parks include Cedar Point located on Lake Erie between Cleveland and Toledo in Sandusky, Ohio; Kings Island near Cincinnati, Ohio; Canada's Wonderland near Toronto, Canada; Dorney Park & Wildwater Kingdom located near Allentown in South Whitehall Township, Pennsylvania; Valleyfair located near Minneapolis/St. Paul in Shakopee, Minnesota; Michigan's Adventure located near Muskegon, Michigan; Kings Dominion near Richmond, Virginia; Carowinds in Charlotte, North Carolina; Worlds of Fun located in Kansas City, Missouri; Knott's Berry Farm located near Los Angeles in Buena Park, California; and California's Great America located in Santa Clara, California, as well as manages and operates Gilroy Gardens Family Theme Park in Gilroy, California.
4) Pitney Bowes Inc. (PBI)
Pitney Bowes Inc. has a Dividend Yield of 11.32%, a Payout Ratio of 73.96%, an Analysts' Rating of 2.20, an Earnings Per Share Growth Rate of 15.38%, and a Return on Equity of 1246.82%. The short interest was 30.67% as of 08/02/2012. Pitney Bowes Inc. provides software, hardware, and services to enable physical and digital communications. It also offers a suite of equipment, supplies, software, services and solutions for managing and integrating physical and digital communication channels. The company's Small & Medium Business Solutions group engages in the sale, rental, and financing of mail finishing, mail creation, and shipping equipment and software; provision of supply, support, and other professional services; and provision of payment solutions.
*Company profiles were sourced from Google Finance and Yahoo Finance. Financial data sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.