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Posts Tagged ‘high dividend yield stocks’

This Company is Offering a 9.3% Special Dividend

Viad Corp (NYSE: VVI) announced that its Board of Directors declared a special cash dividend of $2.50 per share for shareholders of record at the close of business on November 7, payable on November 14.  This is a 9.3% dividend yield on this payout at current stock prices.

Its Board also expects to declare an additional special cash dividend of $1.50 per share, payable in January.

Analyst consensus has Viad growing EPS by 34% to $1.71 per share in 2014.  Based on this projected EPS, Viad has a 12-month price target of $30.00.  First Call has a strong buy recommendation on Viad Corp.

Viad Corp. is comprised of operating companies and a division which constitute a diversified services business. Most of Viad’s services are provided to businesses for use by their customers. Accordingly, the corporation markets its services through retail and financial locations, primarily in the U.S., to numerous trade show organizers and exhibitors, and others.

Viad Corp announced third quarter 2013 income from continuing operations of $10.8 million, or $0.53 per diluted share.  Viad’s income before other items of $14.1 million, or $0.69 per diluted share, excludes restructuring charges of $0.02 per diluted share and non-cash impairment charges of $0.14 per diluted share. This compares to the company’s prior guidance of income before other items in the range of $0.54 to $0.64 per share and 2012 third quarter income before other items of $1.01 per share. The expected decline from 2012 was driven primarily by negative show rotation in the Marketing & Events Group.

  • Revenue was $236.5 million as compared to $307.5 million in 2012.
  • Segment operating income was $24.6 million as compared to $34.2 million in 2012.
  • Free cash flow was $21.8 million as compared to $45.2 million in 2012.
  • Cash and cash equivalents were $120.1 million at September 30, 2013.
  • Debt was $1.7 million, with a debt-to-capital ratio of 0.4% at September 30, 2013.

This Company Just Raised its Monthly Dividend by 8.4%

Pacific Coast Oil Trust (ROYT) owns net profits interests in the sale of oil and natural gas production.  The Company pays monthly dividends with an annual dividend yield of 9.8%.  Pacific Coast Oil Trust just increased its dividend by 8.4% to $0.151 per month, payable on February 14, 2013, to unitholders of record on February 4, 2013. The Trust’s distribution relates to net profits and overriding royalties generated during December 2012 as provided in the conveyance of net profits and overriding royalty interest.

Pacific Coast Oil Trust (ROYT) is projected to produce earnings of $1.84 in 2013 which is a 28% increase from 2012.

First Call has a consensus BUY recommendation with a 1.8 rating.  Zacks Investment has a 12-month price target of $19.40 on ROYT.

Higher crude oil production and prices favorably impacted this month’s distribution as total production was approximately 8% higher and average realized prices were 2% higher than the prior month.  The current net profits amount from the Developed Properties was approximately $5.8 million, after receipt by PCEC from its counterparties of $0.4 millionrelated to the settlement of applicable hedge contracts. The development expense for the Developed Properties was $0.5 million during the period.

The current distribution also includes a 7.5% overriding royalty on the Remaining Properties which produced 22,783 Boe from 36 Orcutt Diatomite wells and one Orcutt Field well. Production from the Remaining Properties was approximately 10% higher than the prior month due to the Orcutt Diatomite expansion project being ahead of schedule. The cumulative deficit of the net profit interest on the Remaining Properties, including the 7.5% overriding royalty payments, is approximately $5.4 million.

Railroad Stocks Look Attractive at Current Prices

Contrary to the demise of coal usage, the railroad stocks are not dead yet.  The road and rail industry has trailed the S&P 500 in performance throughout 2012.  However, my analysis indicates that the rail stocks are undervalued and should be considered as a buy.  Last week, Goldman Sachs issued this report:

Goldman Sachs resumed coverage of the U.S. transportation sector with an attractive coverage view on railroads.   Canadian Pacific Railway (CP) was a top buy idea and made it to the conviction list. Goldman gave a buy rating to CSX Corp. (CSX) and Norfolk Southern Corp. (NSC).  The U.S. transportation industry still has room to raise rates further to recoup years of economic losses, said in a note.

I am in disagreement with Goldman on CP.  While CP is a good company, it is priced to high with a PE of 18 for a growth rate of 10%.  CP has a 5-year average PE of 14 which is comparable to the current industry average of 13.78.  If you like CP, wait for a pullback in price before entering.

My favorite rail stocks at this time are Norfolk Southern (NSC) and CSX Corp (CSX).  They both trade at a PE of around 12 which is lower than the industry average of 13.78.  NSC is trading at $72.25.  Medium-term trends in the majority of NSC’s markets remain favorable and support rising traffic, in our opinion. We see investments in its network improving capacity on heavily trafficked lanes like the Heartland and Crescent corridors, and leading to greater conversion of truck traffic over to rail.  Coal shipments will be down but the growth in other areas will overshadow its impact.  NSC has a 3-5 year projected growth rate of 13.8%.  NSC has a current dividend yield of 2.58% which compounds at 16.4% annually.  Looking forward 10 years, NSC will have a yield on cost of 11.9%.  NSC has an equity summary score of 9.0 out of 10 for a Bullish outlook.

CSX is trading at $21.89 with a one year price performance of -12.2%.  We believe CSX will benefit from economic recovery in the U.S., given its role in transporting many of the basic materials required in manufacturing and construction. We also think the recession forced a more intense focus on operating efficiencies, which should support wider margins during a period of rising volumes. CSX has a 3-5 year projected growth rate of 12.5%.  CSX has a current dividend yield of 2.50% which compounds at 15% annually.  Looking forward 10 years, CSX will have a yield on cost of 9.9%.  CSX has an equity summary score of 7.5 out of 10 for a Bullish outlook.

Union Pacific (UNP) is a little more expensive at a PE of 14 but it also has an EPS growth rate of 15%.  We believe UNP’s new traffic, especially shale-oil related, is coming on at higher prices than we had previously anticipated. On this, and slightly improved coal volumes, we are boosting our EPS estimate for ’12 by $0.24 to $8.19 and ’13’s by $0.22 to $9.02. We note that UNP posted Q2 EPS of $2.10, vs. $1.59, exceeding our estimate and the Capital IQ consensus, both of which were $1.96.  UNP is trading at $117.37 with a dividend yield of 2.01%.  Looking forward 10 years, UNP will have a yield on cost of 7.9%.  UNP has an equity summary score of 9.3 out of 10 for a VERY Bullish outlook.

Building a High Dividend Yield, Low Beta Income Portfolio (Part 1)

For income investors wanting to go it alone, they should consider creating a portfolio of high dividend stocks with low beta.  This type of portfolio will provide a risk to reward profile during times of uncertainty in the markets.  By adding the component of a bullish outlook to the low beta stocks indicates these stocks can be held in a long-term portfolio.  The high dividend yield can be compounded over time and will increase as these stocks raise their dividends each year.  This portfolio will be built in a series of articles.  Here are the first stocks to look at for your portfolio.

AT&T Inc. (T) provides telecommunications services to consumers, businesses, and other providers worldwide.   We see gains in consumer wireless and broadband continuing to offset some wireline voice pressure.  We believe T’s strong balance sheet, expected wide operating margins in 2012 and its review of rural assets are positives. While we think that failure to complete its planned acquisition of T-Mobile USA assets represents a setback, we believe T will move forward and has sufficient spectrum and liquidity to grow. We view T’s above-average dividend as secure and adding to total return potential, though with a rise in the shares in 2012.  T has a dividend yield of 5.69% and a 3-year beta of 0.58.  T has an equity summary score of 9.2 out of 10 for a VERY Bullish outlook.  The First Call Consensus of 37 analysts is a Buy rating.

Altria Group, Inc. (MO) engages in the manufacture and sale of cigarettes, smokeless products, and wine in the United States and internationally.  Although we continue to expect domestic cigarette industry volumes to contract over the long term, we see cigarette companies still having the ability to raise prices,
and thus margins.  As the largest U.S. cigarette manufacturer, MO should lead this pricing strategy, in our view.  Moreover, we look for more limited commodity input cost pressures than in other industries in the consumer staples sector.  Operationally, we think Altria is likely to benefit from several factors over the next several years, including the growth from higher-margin smokeless tobacco products and various restructuring actions.  MO has a dividend yield of 5.23% and a 3-year beta of 0.44.  MO has an equity summary score of 7.6 out of 10 for a Bullish outlook.  The First Call Consensus of 14 analysts is a
Buy rating.

Verizon Communications Inc. (VZ) provides communications, information, and entertainment products and services to consumers, businesses, and governmental agencies worldwide.  VZ is a large, steady high yield dividend stock.  It boasts a dividend yield of 5.3% and a 3-year beta of 0.54.  VZ has a
strong operating margin and perception of network quality, the company’s wireless segment should be a driver for VZ in 2012, even as we see higher
subsidies for smartphones launched on 3G and 4G networks.  We are encouraged by the relative stability in VZ’s wireline segment over the past six months, helped by FiOS gains and by the company’s above-average dividend. We believe VZ’s pending acquisition of spectrum from a cable consortium will help alleviate future network congestion. VZ has an equity summary score of 8.9 out of 10 for a Bullish outlook.  The First Call Consensus of 39 analysts is a
Buy rating.

Stocks with Dividend Yields Above 10%

The following table displays stocks with a high dividend yield of 10% or more.  These stocks are rated bullish or very bullish by their equity summary scores.  The complete list includes PZN, CXS, NYMT, ANH, DX, PMT, ARI, and NCT.  The top 3 yielding stocks are profiled below.

Pzena Investment Management, Inc. (PZN) is a publicly owned investment manager. It provides its services to individuals, typically high net worth individuals, investment companies, charitable organizations, corporations, state or municipal government entities, pension and profit sharing plans, and pooled investment vehicles. The firm launches and manages equity mutual funds and manages balanced mutual fund for its clients. The firm invests in the public equity markets across the globe. The firm employs fundamental analysis while making its investments. Pzena Investment Management, Inc. was founded in 1995 and is based in New York City.  PZN is trading at $4.96 with a dividend yield of 15.3%.   On February 8, 2012 PZN approved a
dividend of 0.19 per share payable on March 2, 2012.

On 02/08/12, the company announced quarterly earnings of 0.08 per share, a positive surprise of 11.1% above the consensus 0.07.  Over the past 4 quarters, the company has reported 3 positive (>2%), 0 negative (<-2%), and 1 in-line (within 2%) surprises.  The average surprise for this time period has been 4.7%.  PZN’s current quarter consensus estimate has increased over the past 90 days from 0.07 to 0.08, a gain of 17.1%.  This improvement is significantly greater than its Industry average of 0.0% during the same time period.  Over the past 90 days, the consensus price target for PZN has increased notably from 4.31 to 5.25, a gain of 21.8%.

CreXus Investment Corp. (CXS) is specialty finance company, which acquires, manages, and finances, directly or through its subsidiaries, commercial mortgage loans and other commercial real estate debt, commercial mortgage-backed securities (CMBS), and other commercial real estate-related assets. It also acquires subordinated commercial mortgage loans and mezzanine loans.  CXS is trading at $10.98 with a 13% yield.

On 02/23/12, the company announced quarterly earnings of 0.55 per share, a positive surprise of 63.2% above the consensus 0.34.  Over the past 4 quarters, the company has reported 3 positive (>2%), 1 negative(<-2%), and 0 in-line (within 2%) surprises.  The average surprise for this time period has been 26.2%.  CXS’s current quarter consensus estimate has remained relatively  unchanged over the past 90 days at 0.31.  Estimates within its Industry have moved an average of 1.0% during the same time period.  During the past four weeks, analysts covering CXS have made 2 upward and 0 downward EPS estimate revisions for the current quarter.

New York Mortgage Trust, Inc., (NYMT) operates as a real estate investment trust (REIT) in the United States. The company engages in acquiring, investing, financing, and managing mortgage-related assets.  While New York Mortgage Trust Inc.’s earnings have increased from $0.11 to an estimated $0.35 over the past 5 quarters, they have shown acceleration in quarterly growth rates when adjusted for the volatility of earnings. This indicates an improvement in future earnings growth may occur.  NYMT is trading at $7.02 with a 14% yield.  NYMT has an outperform rating from Zacks Investment Research.

NYMT’s current quarter consensus estimate has decreased over the past 90 days from 0.34 to 0.33, a loss of -5.0%.  Consensus estimates for the Specialty Financials Industry have moved an average 1.0% during the same time period.  During the past four weeks, analysts covering NYMT have made no upward or downward EPS estimate revisions for the current quarter.

A Special Dividend with a 43% Yield

Clear Channel Outdoor Holdings, Inc (CCO) announced that its board of directors declared a special cash dividend of $2,167 million (or approximately $6.08 per share, based on shares outstanding at the close of business on February 28, 2012), which will be paid on March 15, 2012 to Class A and Class B stockholders of record at the close of business on March 12, 2012, subject only to the closing of the offering of the Notes.  CCO is trading at $14.00 making the $6.08 special dividend a 43% yield.

The dividend is payable subject to the closing of a $275 million aggregate principal amount of 7.625% Series A Senior Subordinated Notes due 2020 and $1,925 million aggregate principal amount of 7.625% Series B Senior offering.  Subordinated Notes due 2020.

Clear Channel Outdoor Holdings, Inc. is one of the world’s largest outdoor advertising companies, with more than 750,000 displays in over 40 countries across five continents, including 48 of the 50 largest markets in the United States. Clear Channel Outdoor Holdings, Inc. offers many types of displays across its global platform to meet the advertising needs of its customers. This includes a growing digital platform that now offers over 850 digital billboards across 37 U.S. markets. Clear Channel International operates in 30 countries across Asia, Australia and Europe in a wide variety of formats.

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