When thinking about long-term plans for wealth accumulation, most investors like the idea of incorporating dividends that offer high yields to the mix. Today we have developed a list of companies that offer yields above 5% and some considerably higher. These dividend payouts provide the investor with a steady stream of income. In addition, these high yielders have two more traits in their favor: they appear to be trading below market value and have received a recent 'Buy' rating from industry analysts. The list below provides you with a place to start your research process.
The price/earnings ratio is one of the most commonly used price-multiple metrics. Often, EPS from the last four quarters is used to derive this number. A firm that has a high P/E ratio generally indicates that investors have high expectations of the firm relative to future earnings growth. By the opposite token, investors generally have lower expectations of a firm with a low P/E ratio. A firm that holds a P/E below 10 could be viewed as having "value investment" potential. One thing to remember is that EPS is an accounting measure that could be potentially manipulated. Thus the P/E is only as good as the quality of the earnings.
The forward P/E is a price multiple valuation metric, which is similar to the current P/E ratio, except that it uses the forecasted earnings instead. While this number might not be as accurate because it uses "forecasted" numbers, it does offer the benefit of illustrating analysts' expectations of a firm. If the market believes that earnings will grow moving forward, then the forward P/E should be lower than the current P/E. Financial Leverage, also known as the Equity Multiplier, illustrates how a firm is financing its assets. The lower the number the more a firm is financing its assets internally through stockholder equity. The higher this metric is the more the firm is relying on debt to finance its assets.
We first looked for stocks with a very high yield (more than 5%). We then screened for businesses that are trading at a discount (P/E<10)(forward P/E<10). We then screened for businesses that analysts rate as "Buy" (2 < mean recommendation < 3). We did not screen out any market caps or sectors.
Do you think these stocks will perform well? Use our screened list as a starting point for your own analysis.
1) Pitney Bowes Inc. (PBI)
|Forward Price/Earnings Ratio||7.02|
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. Its Enterprise Business Solutions group sells, supports, and offers other professional services of high-speed, production mail systems, and sorting and production print equipment; and sells support services for non-equipment-based mailing, customer relationship and communication, and location intelligence software.
This segment also provides facilities management services; secure mail services; reprographic document management services; and litigation support and eDiscovery services, as well as offers presort mail services and cross-border mail services; and direct marketing services. Pitney Bowes Inc. markets its products through its sales force, direct mailings, outbound telemarketing, independent distributors, and the Internet, as well as to various business, governmental, institutional, and other organizations. The company has a strategic partnership with ORION Holdings to offer print solutions to Interpublic Group agencies and clients. Pitney Bowes Inc., formerly known as Pitney Bowes Postage Meter Company, was founded in 1920 headquartered in Stamford, Connecticut.
2) France Telecom (FTE)
|Industry||Telecom Services - Foreign|
|Forward Price/Earnings Ratio||8.71|
France Tlcom SA provides fixed telephony and mobile telecommunications, data transmission, Internet and multimedia, and other value-added services to consumers, businesses, and telecommunications operators under the Orange and France Telecom brand names. It also offers personal and home communication services, legacy and mature network services, and international carriers and shared services for enterprises; VoIP, image, and videoconferencing services; and data infrastructures, such as satellite access, WiFi, and fiber optics. In addition, the company provides platform services, including customer relationship management, messaging, hosting, cloud computing, security solutions, infrastructure applications management, and machine-to-machine services; collaborative services comprising consulting, integration, and project management; and sales of equipment associated with integration services. It has operations in France, Spain, Poland, the United Kingdom, and internationally. The company was founded in 1990 and is based in Paris, France.
3) Gannett Co., Inc. (GCI)
|Industry||Publishing - Newspapers|
|Forward Price/Earnings Ratio||7.10|
Gannett Co., Inc. operates as a media and marketing solutions company in the United States and internationally. Its Publishing segment publishes 82 U.S. daily newspapers with affiliated online sites, including USA TODAY, a national, general-interest daily publication; USATODAY.com; USA WEEKEND, a magazine supplement for newspapers; Clipper Magazine, a direct mail advertising magazine; Nursing Spectrum and NurseWeek publications, and operates Nurse.com; DealChicken, a social commerce/daily deals product; and military and defense newspapers. This segment also includes 17 paid-for daily newspapers; approximately 200 weekly newspapers, magazines, and trade publications; and approximately 500 non-daily publications, as well as engages in commercial printing, newswire, marketing, and data services operations.
The company's Digital segment owns and operates CareerBuilder, an employment Web site, which offers online recruitment and career advancement services for employers, employees, recruiters, and job seekers; PointRoll, which provides digital marketing services and technology; ShopLocal that offers multichannel shopping and advertising services; and Planet Discover, which offers hosted search and advertising services. Its Broadcasting segment operates 23 television stations and affiliated Web sites, which produce local programming, such as news, sports, and entertainment programming. This segment also includes Captivate Network, a national news and entertainment network that delivers programming and full-motion video advertising on video screens located in elevators of office towers and select hotel lobbies in North America. The company has strategic business relationships with online affiliates, including CareerBuilder, LLC; Classified Ventures; ShopLocal.com; and Topix. Gannett Co., Inc. was founded in 1906 and is headquartered in McLean, Virginia.
4) Total SA (TOT)
|Industry||Major Integrated Oil & Gas|
|Forward Price/Earnings Ratio||7.02|
TOTAL S.A., together with its subsidiaries, operates as an integrated oil and gas company worldwide. The company operates in three segments: Upstream, Downstream, and Chemicals. The Upstream segment engages in the exploration, development, and production of oil and gas, liquefied natural gas, and electricity; and shipping and trading liquefied petroleum gas (LPG), as well as power generation from renewable energies, and coal production, trading, and marketing. As of December 31, 2011, it had combined proved reserves of 11,423 million barrels of oil equivalent of oil and gas. The Downstream segment is involved in refining, marketing, trading, and shipping crude oil and petroleum products.
This segment also produces and markets a range of specialty products, such as lubricants, LPG, jet fuel, special fluids, heavy fuel, bitumen, marine fuels, and petrochemical feedstock. This segment holds interests in 20 refineries located in Europe, the United States, the French West Indies, Africa, and China, as well as operates a network of 14,819 service stations. The Chemicals segment produces base chemicals, including petrochemicals and fertilizers; and specialty chemicals, such as elastomer processing, adhesives, and electroplating chemistry. This segment serves the automotive, construction, electronics, aerospace, and convenience goods markets. TOTAL S.A. was founded in 1924 and is headquartered in Paris, France.
5) Eni SpA (E)
|Industry||Major Integrated Oil & Gas|
|Forward Price/Earnings Ratio||8.74|
Eni SpA, an integrated energy company, engages in the exploration, production, transportation, transformation, and marketing of oil and natural gas. The company is also involved in the production and sale of electricity; refining and marketing of petroleum products; and production and sale of petrochemical products and hydrocarbons. In addition, it engages in the offshore and onshore hydrocarbon field construction. Further, the company offers offshore and onshore drilling, and offshore design and engineering services for oil and gas companies. It has a strategic partnership with Gazprom for the joint development of projects in the upstream oil and gas markets. Eni SpA has operations primarily in Europe, Africa, Asia, and the Americas. The company was founded in 1953 and is headquartered in Rome, Italy.
*Company profiles were sourced from Google Finance and Yahoo Finance. Financial data was sourced from Finviz on 08/26/2012.