Take Flight With This 6.6% Yielder

| About: Fly Leasing (FLY)
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I pride myself on being a contrarian investor. However, my latest find is even far out on the contrarian scale for me. It is in a lousy industry (airlines) and is headquartered in one of the PIIGS (Ireland) as well. However, it is a strong operator with a growing portfolio of assets. It also pays a substantial and growing dividend yield and is selling at cheap valuations.

"Fly Leasing Limited (NYSE:FLY) acquires, finances, leases, and sells commercial jet aircraft worldwide. The company leases its aircraft under long-term to medium-term contracts to a group of airlines. As of December 31, 2011, its aircraft portfolio consisted of 109 commercial jet aircraft with 103 narrow-body passenger aircraft and 6 wide-body passenger aircraft." (Business description from Yahoo Finance)

5 reasons FLY is a nice income portfolio pick up at $12 a share:

  1. The stock yields 6.6%, has paid a dividend every quarter since it went public in 2007, and just increased its quarterly payout by 10%.
  2. Consensus earnings estimates for FY2012 and FY2013 have risen over the past two months. Estimates for FY2012 have increased 40% in the past sixty days.
  3. The company crushed earnings estimates the past two quarters and is selling for less than 7 times forward earnings.
  4. FLY is cheap at just 66% of book value, increased its cash on its books by $28mm in the last quarters and added substantially to its airline portfolio with a cheap acquisition of 49 airplanes on attractive terms in late 2011.
  5. The five analysts that cover the stock have a median price target of $16 on the shares and Maxim Group just initiated a "Buy" rating on FLY in late June.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in FLY over the next 72 hours.