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This Company is Broadcasting Significant Growth and Income in the Next Year

Television broadcasting company Sinclair Broadcasting Group (SBGI) is experiencing a significant amount of success as it continues to grow its broadcasting network through acquisitions and strategic partnerships.  The Company is trading near 52 week highs following news the company has reached an agreement with DirecTV on a new retransmission consent agreement. It has also entered into a short-term extension of its existing agreement. As a result, DirecTV will continue to carry all of Sinclair’s stations.  This comes a day after saying it will pay$370 million to buy 18 stations from Barrington Broadcasting Group, and comes only days after the purchase of Cox Media Stations.

While the stock is up 54% in the past year, Sinclair Broadcasting is trading at a price earnings (PE) ratio of 10 compared to an industry PE of 17.5.  This is a cheap stock considering First Call is projecting a 78% increase in EPS next year.  The First Call consensus is for $2.35 in EPS next year.  Based on the current PE of 10, this indicates a target stock price of $23.50, a 30% increase from current levels.  First Call consensus is a strong buy with a 2.0 rating.

Sinclair Broadcasting has a dividend yield of 3.33%.  The company increased its dividend 25% in the past year.  On December 14, 2012, the Company paid a$1.00per share special dividend and a$0.15per share quarterly cash dividend to its shareholders. I expect the dividend to increase in the future as SBGI continues to increase EPS.

Sinclair Broadcasting Group had an increase in 4th quarter 2012 earnings of 161% and full year 2012 increase in earnings per share of 89%.

The Company reported diluted earnings per common share of$0.73for the three-month period ended December 31, 2012versus diluted earnings per common share of$0.28in the prior year period.

Net broadcast revenues from continuing operations were$920.6 million for the twelve months ended December 31, 2012, an increase of 42.1% versus the prior year period result of$648.0 million.  The Company had operating income of$329.3 million in the twelve-month period, as compared to operating income of$225.6 million in the prior year period.  Net income attributable to the Company was$144.7 million in the twelve-month period, versus net income of$75.8 million in the prior year period.

The Company reported diluted earnings per common share of$1.78in the twelve-month period ended December 31, 2012versus diluted earnings per common share of$0.94in the prior year period.

The Company expects first quarter 2013 station net broadcast revenues from continuing operations, before barter, to be approximately$251.9 million to $254.9 million, up 32.0% to 33.5% as compared to first quarter 2012 results of$190.9 million.  This assumes approximately$0.4 millionand$2.5 million in political and Super Bowl revenues, respectively, in the first quarter 2013, as compared to$3.6 millionand$0.1 million in the first quarter 2012.  The 2013 first quarter net broadcast revenue estimates assume$62.6 million related to the Acquisitions.

Buy This Monthly Dividend Payer for 2013

Home Loan Solutions Service (HLSS) is worth a look as a monthly dividend paying stock.  The company has exceeded earnings estimates for 4 straight quarters.  Home Loan is benefiting from the rebounding housing market as it focuses on servicing mortgages for fees.  The company has increased its monthly dividend by 63% in the past year.

While Home Loan Solutions is not what I consider a value play trading at 1.5 times book value, the company has 80% plus operating margins and generates $1.9 million in income per employee.  That is no typo, $1.9 million per employee.  This is a very enticing business model.

The risk to sales growth is an increase in prepayment rates but these have been lower than expected.  Also, the mortgage refi boom seems to be slowing so HLSS will likely purchase additional bundles of mortgages to service.

Home Loan Solutions received gross proceeds of $480.7 million from the December 24 follow-on offering of 25,300,000 ordinary shares at $19.00 per share. Proceeds from the offering and two new variable funding notes with a total commitment of $1.6 billion were used to acquire non-agency mortgage servicing assets from Ocwen representing mortgages with an unpaid principle balance of $34.6 billion.

Home Loan Solutions Service reported Q4 GAAP earnings of $0.44 per share, ex one-time items, versus the Capital IQ GAAP consensus of $0.39. Revenues were $61.07 million, versus the analyst estimate of $59.32 million.

“Reflecting on our first year of operations, I believe that we have delivered on our plan to provide our shareholders with earnings and dividends that are particularly attractive given the stability and low risk of our assets which the ABS markets are starting to reward,” said ChairmanWilliam Erbey. “I am pleased with the continued support of our equity and debt investors and look forward to further growth in 2013.”

“Our results in the fourth quarter exceeded our revised guidance as lower than expected prepayments reduced amortization expense,” said PresidentJohn Van Vlack. “We are pleased that the variations from our guidance in 2012 have all been positive. Additionally, strong executions in the ABS term note market are continuing to reduce our borrowing costs relative to our expectations.”

On February 7, 2013 the board of directors at Home Loan Servicing Solutions approved a dividend of 0.13 per share. The dividend is payable on April 10, 2013 to shareholders of record on March 29, 2013.  HLSS has a current dividend yield of 6.78% following a 63% increase in its monthly dividend in the past year.

HLSS is trading at $23 with a fair value of $27, a 17% discount to fair value.  First Call analysts’ consensus is for 2013 EPS of $1.75, a 12% increase from 2012.  The First Call consensus is a buy recommendation with a rating of 1.8.

Based in George Town, Cayman Islands, Home Loan Servicing is a mortgage investment company. Founded in 2010, the company together with its subsidiaries is engaged in acquiring mortgage servicing assets, mainly subprime and Alt-A mortgage servicing rights and associated servicing advances.

Health Care REIT Posts Stronger Rental Income

Health Care REIT Inc.’s (HCN) fourth-quarter earnings more than doubled as the company saw stronger rental income and resident fees and posted a significantly higher gain on sales of properties.  HCN will benefit from an aging Baby Boomer generation’s growing demand for assisted and independent living facilities in the coming years. With a significant presence in these property types, Health Care REIT is in a relatively strong position than most of its competitors.

Health Care REIT also announced 2013 dividend payment rate of $3.06per share, representing a 3.4% increase above 2012 payments.   The dividend payout is a current dividend yield of 4.84%. The latest cash dividend was the company’s 167th consecutive quarterly dividend payment.

With strong quarterly results, Health Care REIT is well poised to maintain its growth curves and simultaneously benefit the shareholders with steadily rising dividends.

In the fourth quarter, the company acquired 11 properties with Belmont Village for $530 million, 11 properties with Brookdale Senior Living Inc. (BKD) for $271 million, and five properties with Sunrise Senior Living for $265 million.

According to the U.S. Census Bureau, the elderly population (aged 65 and older) is expected to jump 36% from 2010 to 2020 to 54.8 million people. The latest acquisition by Health Care REIT, therefore, reinforces the buzz in the healthcare REIT industry, spurred by an aging Baby Boomer generation’s increased demand for assisted and independent living facilities.

Health Care REIT reported a profit of $107.2 million, up from $44.5 million a year earlier.  On a per-share basis, earnings improved to $0.35 from $0.15. Excluding gains on properties and other items, funds from operations fell to $0.85 cents from $0.91 cents.

Revenue jumped 30% to $500.7 million. Analysts polled by Thomson Reuters had forecast earnings of $0.28 cents, FFO of $0.84 cents and revenue of $498 million.

Rental income, the biggest top-line contributor, rose 20%.  Resident fees and service revenue jumped 46%.

The latest period included a $54.5 million gain on property sales, compared with a $4.6 million gain a year earlier.

The senior housing- and health-care-focused real-estate investment trust expects 2013 FFO of$3.70 to $3.80 a share.

The shares of Health Care REIT currently trade at 16x the Consensus Estimate for 2013 FFO, a 4.6% premium to the industry average. On a price-to-book basis, Health Care REIT shares trade at 1.6x, a 15.8% discount to the industry average. On a price-to-book basis, the valuation looks fairly valued.

Bottom Line: Health Care REIT (HCN) is a stable, growing dividend play with a fair valuation at this time.  Investors may want to add shares on a price pullback to $60 or lower.

PSA Profits up 24% – Increases Dividend 14%

Public Storage’s (PSA) fourth-quarter profit rose 24% as the real-estate investment trust posted wider margins, although revenue missed analysts’ expectations.  Public Storage reported income of $271.4 million, or $1.22 a share, up from $ 220.2 million, or 96 cents a share, a year earlier. Per-share earnings reflect effects from preferred and restricted shares.

Excluding foreign currency exchange impacts and other items, funds from operations (FFO), a key performance benchmark in the REIT sector, grew to $1.86 a share from $1.50. Rental revenue rose 5.3% to $385.6 million.

For the year endedDecember 31, 2012, net income allocable to common shareholders was$669.7 million or $3.90per diluted common share, compared to$561.7 million or $3.29per diluted common share for the same period in 2011, representing an increase of$108.0 million or$0.61per diluted common share.

For the year endedDecember 31, 2012, FFO was$6.31per diluted common share as compared to$5.67for the same period in 2011, representing an increase of 11.3%.

First Call analysts’ consensus has a projected 2013 FFO of $7.09 which is a 12% increase.  Based on its current PE, PSA has a 12-month price target of $170.  This represents an 11.8% price upside which presents a 15% total return with dividends included. PSA has an equity summary score of 7.2 out of 10 for a Bullish outlook.

Concurrent with its earnings release, Public Storage announced a hike in its quarterly dividend. The increased dividend now stands at $1.25 per share, reflecting an augmentation of 15 cents per share, or 14% from the prior-quarter amount. This dividend will be paid on Mar 28, 2013 to shareholders of record as of Mar 13.

PSA has a current dividend yield of 3.28% with a 5-year annual dividend growth rate of 20%.

The REIT, which owns self-storage facilities, has benefited from industry consolidation, giving it an advantage advertising-wise and allowing it to gain market share. The company’s top-line results rebounded in the second half of last year, after four consecutive quarters of weaker earnings.

During the three months endedDecember 31, 2012, PSA acquired ten self-storage facilities (761,000 net rentable square feet of self-storage space and additional space that we intend to convert into 220,000 net rentable square feet of storage space for an additional cost of$15 million), located inFlorida(three),Georgia(two),California(two) and one each inArizona,New YorkandTexas, for an aggregate acquisition cost of approximately$82 millionin cash.

We are encouraged with the better-than-expected results at Public Storage. We believe that the company is well poised to maintain its growth curve backed by its robust presence in all the major markets in the U.S.

It is the leading owner and operator of storage facilities in the U.S. and has significantly increased the scale and scope of its operations through the acquisition of Shurgard Storage Centers that has a considerable presence in the European markets.

It also owns a 41% common equity interest in PS Business Parks Inc. (PSB), which owns and operates commercial space, primarily flex, multi-tenant office and industrial space. In addition, the storage facilities of the company have high visibility and are usually located in heavily populated areas that enhance the local awareness of the brand.

HFC pays 8th Special Dividend and Boosts Regular Dividend by 50%

Investors looking for a regular helping of special dividends should consider HollyFrontier Corporation (NYSE: HFC). The company just announced its 8th special dividend since August 2011.  In addition, HFC just juiced its regular dividend by 50%.

Subscribers to my Get Rich Monthly Income Plan received $31.00 per share in dividends in 2012 with a yield on cost of 12.5% in one year.  In addition, subscribers received $1,690 in call premiums on each 100 shares of HFC stock in 2012.  The covered call premiums accounts for a yield of 68% as subscribers utilized a special income technique called the perpetual covered call.  In total, Monthly income Plan subscribers booked a total return of 219% on HFC in 2012 alone!

HollyFrontier Corporation (HFC) announced today that its Board of Directors approved a 50% increase in the Company’s regular quarterly cash dividend to $0.30 per share from the current rate of $0.20 per share. This is the fifth increase in the regular dividend since the merger in July of 2011, representing a total increase of 300%. The regular dividend will be paid on April 2, 2013 to holders of record of common stock on March 15, 2013.

The Company also announced today a special cash dividend in the amount of $0.50 per share. The special dividend will be paid on March 19, 2013 to holders of record of common stock on March 5, 2013. This is the 8th special dividend declared by HollyFrontier since August 2011.

HFC’s stock price is up 70% in the past year but still trades at a low PE of 7.5 which is a 60% discount to the industry average PE ratio.  HFC has an equity summary score of 9.8 out of 10 for a VERY Bullish outlook.

Mike Jennings, CEO and President of HollyFrontier, said, “Our Board of Directors remains committed to delivering value to our shareholders through both a growing regular dividend as well as special dividends. After today’s 50% dividend increase, our current regular dividend yield is 2.2%, and our trailing twelve month cash dividend yield stands at 6.1% relative to today’s closing price of $53.72. Including today’s announcement, HollyFrontier has returned almost $1.3 billion in capital to shareholders through regular dividends, special dividends and buybacks since the July 2011 merger.”

CSWC Announces $2.75 Special Dividend – Stock Trades at 49% Discount to NAV

The Capital Southwest Corporation (CSWC) board of directors has declared a cash dividend in the amount of $2.75 per share of common stock. This special dividend is a yield of 2.5% based on the current stock price. The dividend is payable on March 28, 2013 to shareholders of record on March 15, 2013.

Capital Southwest Corporation is a public investment firm specializing in venture capital and private equity investments in small and medium sized businesses.  CSWC has a market cap of $421 million and is cheaply valued with a trailing PE of only 6 compared to an industry average PE of 20.

Capital Southwest Corporation reported total net assets at December 31, 2012 of $628,089,815 equivalent to $165.36 per share.  CSWC shares are currently trading at $111 which is a 49% discount to the NAV at year end. 

The market clearly misunderstands this stock as it should not be trading at such a discount to NAV.  In addition, CSWC has NO long-term debt on its books.  CSWC has an equity summary score of 7.2 out of 10 for a Bullish outlook.

Assuming reinvestment of all dividends and tax credits on retained long-term capital gains, the December 31, 2012net asset value was 18.4% greater than the March 31, 2012net asset value of $167.45per share and 34.9% above the December 31, 2011net asset value of $146.95per share. It is important to note that during the nine months ended December 31, 2012, CSWC distributed $66,825,782 or $17.59 per share of capital gains dividends and $3,025,032 or $0.80 per share in ordinary dividends to our shareholders.

On January 30, 2013 Capital Southwest Corporation announced that Capital Southwest Venture Corporation, a wholly-owned subsidiary of CSWC sold its 9,317,310 shares of common stock of Heelys, Inc. to Sequential Brands Group, Inc. pursuant to the merger of Heelys into a wholly-owned subsidiary of Sequential.  The Merger closed on January 24, 2013.

The sale of CSVC’s 9,317,310 shares of Heelys’ common stock generated cash proceeds of $20,963,948 and a capital gain of $20,861,458 or $5.49 per share, based on the 3,800,393 shares of issued and outstanding shares of CSWC. The CSWC Board has approved a partial distribution of the capital gain proceeds, in the amount of $2.75 per share or approximately $10,451,000.

New BDC ETF is a Pure Play on High Yield Income

Market Vectors ETF Trust just launched the Market Vectors BDC Income ETF (NYSE: BIZD), the first exchange-traded fund (ETF) designed to provide pure-play exposure to business development companies (BDCs).

BIZD is currently trading at $20.29 and will pay quarterly dividends and annual capital gains.  The initial dividend amount has not been announced yet but the index has a dividend yield of 7.6%.

Business development companies have traditionally been high-yielding, making them an attractive choice in today’s ongoing search for income.  Investing in BDCs provides exposure to private companies that many investors could not otherwise access, allowing for potential growth and yield generation.

The new ETF will try to reflect the performance of the Market Vectors U.S. Business Development Companies Index, which tracks U.S. publicly traded BDCs. The Index’s market capitalization break down includes mid-caps 49.4% and small-caps 50.6%. The underlying index also has an average weighted dividend yield of 7.60%.

To be eligible for the index, a BDC must also have a market capitalization in excess of $150 million, a three-month average daily trading volume of at least $1 million, and a minimum trading volume of 250,000 shares each month in the previous six months.

BIZD has 25 holdings and its top holdings include Ares Capital (ARCC) 16.0%, American Capital (ACAS) 14.8%, Prospect Capital (PSEC) 7.5%, Apollo Investment (AINV) 6.1% and Triangle Capital (TCAP) 4.9%.

BDCs’ principal business is to lend capital or provide services to privately-held companies or thinly-traded U.S. public companies. To qualify as a BDC, a company must be organized under the laws of, and have its principal place of business in the U.S.; be registered with the Securities and Exchange Commission; and have elected to be regulated as a BDC under the Investment Company Act of 1940 (“the 40 Act”).

Icahn Enterprises Increases Annual Dividend by 185% – 5.86% Dividend Yield

Icahn Enterprises L.P. (NYSE: IEP) announced that the Board of Directors of its general partner has approved a modification to the Company’s distribution policy to provide for an increase in the annual distribution from $1.40, comprised of $0.40 in cash and $1.00 in depositary units, to $4.00 per depositary unit, payable in either cash or additional depositary units, at the election of each depositary unit holder.

The Board of Directors of the general partner has declared a quarterly distribution for the first quarter of 2013 in the amount of$1.00, which will be paid on or aboutApril 15, 2013to depositary unit holders of record at the close of business onFebruary 21, 2013. Depositary unit holders will have untilMarch 14, 2013to make an election to receive either cash or additional depositary units; if a holder does not make an election, it will automatically be deemed to have elected to receive the dividend in cash. Depositary unit holders who elect to receive additional depositary units will receive units valued at the volume weighted average trading price of the units on NASDAQ during the 20 consecutive trading days immediately following the election deadline. No fractional depositary units will be issued pursuant to the dividend payment.

The new annual dividend will result in a dividend yield of 5.86% at the stock’s current price.  Icahn Enterprises is up 55% over the past 52 weeks. Icahn Enterprises L.P. (NYSE: IEP) has an equity summary score of 10 out of 10 for a VERY Bullish outlook.

Carl C. Icahn, the Chairman of Icahn Enterprises and the holder of approximately 93% of the outstanding depositary units, is known for his investor activist actions to increase the profit of companies that he buys large share positions in to sell when the value increases.  For those investors wanting to follow Icahn, it is best to purchase IEP rather than to buy into the stocks he invests in.

Mr. Icahn stated: “I’m very proud of the performance of Icahn Enterprises. Since Icahn Enterprises adopted an activist philosophy, the trading price of Icahn Enterprises’ depositary units has risen from $7.625 on December 31, 1999 to $59.95 on February 8, 2013, the last trading day before this announcement – an increase of approximately 817%, which translates to an annualized return of approximately 18% for those who owned the stock through that period (including reinvestment of distributions into additional depositary units and taking into account in-kind distributions of depositary units). Comparatively, the S&P 500, Dow Jones Industrial and Russell 2000 indices increased only approximately 32%, 66% and 116%, respectively, over the same period, which translates to an annualized return of only approximately 2%, 4% and 6%, respectively (including reinvestment of distributions into those indices).

Over the last few years, we have had substantial earnings and cash flow. We believe that our strategy will continue to produce strong results in 2013 and into the future, and that belief is reflected in the Board’s decision to increase our quarterly distribution. We believe that the strong cash flow and asset coverage from our operating subsidiaries will allow us to maintain a strong balance sheet and ample liquidity. We have provided unit holders with a choice between taking distributions in cash or in additional depositary units so that those who wish to increase their participation in the future of our business may do so.”

CVR Energy Declares Special Dividend

CVR Energy Inc. (CVI) has declared a special $5.50 per-share dividend and also unveiled plans to initiate a per-share quarterly dividend of 75 cents.  The special dividend is payable Feb. 19 to shareholders of record on Feb. 5.  CVR Energy will begin paying the quarterly dividend of 75 cents a share in the second quarter.

The special dividend will have a 9.57% dividend yield.  The quarterly dividend will have an annualized 5.22%.

CVR Energy Inc. (CVI) has an equity summary score of 9.7 out of 10 for a VERY Bullish outlook.  CVI is projected to produce $6.62 in earnings in 2013.  Based on a PE of 12, the 12-month price target is $79.

CVR Energy noted it expects cash flows of $700 million for 2013 from its interests in CVR Refining LP (CVRR) and CVR Partners LP (UAN) , and based on this its board has declared the quarterly dividend.

CVR Energy owns a majority interest in CVR Partners (UAN), a nitrogen fertilizer master limited partnership. It also recently currently holds a stake of about 84% in CVR Refining (CVRR), a newly formed master limited partnership that will distribute all of its available cash each quarter.

CVR Energy said estimated cash distributions for 2013 from CVR Refining (CVRR) are about $700 million. Under the current ownership structure, the new unit holders of CVR Refining (CVRR) would collectively receive about $115 million, generating an annualized yield of roughly 19% and CVR Energy would receive about $585 million, for the year ending Dec. 31.

Headquartered in Sugar Land, Texas, CVR ENERGY is an independent refiner and marketer of high value transportation fuels and, through a limited partnership, a producer of ammonia and urea ammonia nitrate fertilizers.

CVR Energy’s petroleum business includes full-coking sour crude refinery in Coffeyville, Kan.  In addition, CVR Energy’s supporting businesses include a crude oil gathering system serving central Kansas, northern Oklahoma and southwest Nebraska; storage and terminal facilities for asphalt and refined fuels in Phillipsburg, Kan.; and a rack marketing division supplying product to customers through tanker trucks and at throughput terminals.

Best Income Stocks for 2013 – HollyFrontier (HFC)

HollyFrontier Corporation (NYSE: HFC) operates as an independent petroleum refiner and marketer in the United States. It produces light products, such as gasoline, diesel fuel, jet fuel, specialty lubricant products, liquefied petroleum gas, fuel oil, and specialty and modified asphalt.  HollyFrontier has a strong history of increasing shareholder value with special dividends and share buybacks.  The company trades at a discount to other refiners, has a strong balance sheet, is well managed and is looking to expand

HollyFrontier made the Goldman Sachs “Best Income Stocks” list for 2013.  In a recent note, Goldman Sachs Group Inc. pointed out a number of stocks that could provide some easy money for investors by virtue of what the Wall Street bank calls a “social contract” — a combination of earnings appreciation due to expected share buybacks along with dividend yields.  It could be easy money, provided shares remain stable or rise, for investors looking for as close to a guarantee as equities can offer.

HollyFrontier boasts an 8.4% dividend, more than twice that of any other company.  But its relatively low 3.5% buyback earnings accretion keeps the total payout at 11.9%.  Trading in the upper $40s, HollyFrontier also is considered to have the highest price upside of nearly 50%, with a target of $69.

HollyFrontier has an equity summary score of 7.6 out of 10 for a Bullish outlook.  HFC has a mean analyst recommendation of 2.2 out of 4.0 for a BUY rating.

HollyFrontier reported 3Q earnings increased 18.5%  and 9 months earnings increased 15% from the same periods a year earlier.

HollyFrontier reported third quarter net income attributable to stockholders of $600.4 million or $2.94 per diluted share for the quarter ended September 30, 2012, compared to $523.1 million or $2.48 per diluted share for the quarter ended September 30, 2011. For the nine months ended September 30, 2012, net income attributable to HollyFrontier stockholders totaled $1,335.6 million or $6.44 per diluted share compared to $800.0 million or $5.63 per diluted share for the nine months ended September 30, 2011.

HollyFrontier’s President & CEO, Mike Jennings, commented, “We had a tremendous quarter with third quarter results reaching new record levels. Exceptionally high inland to coastal crude oil differentials as well as robust heavy crude oil differentials helped drive our refined product margins to all time highs. Looking forward, we believe that the structural crude advantages currently driving our strong operating margins will continue to positively impact our operating income, allowing us to continue to pay both regular and special dividends. We remain focused on increasing total shareholder return while maintaining a strong balance sheet.”

On November 1, HollyFrontier raised its quarterly dividend 33% and also unveiled an additional special payout of 50 cents per share, the refiner’s latest moves to reward investors.

 

The five-cent increase to HollyFrontier’s regular dividend brings the payout to 20 centsper share and will cost the company about $40.7 million more a year. HFC has a current dividend yield of 1.69%.  The latest dividend increase represents the fourth dividend increase since the company’s merger in July 2011.

HollyFrontier said its special cash dividend, its fifth special payout this year.  The company’s board year-to-date has declared $3.10 in special and regular dividends, which represents an approximate 8% cash yield.

HollyFrontier Corporation (NYSE: HFC) was one of the big winners for subscribers to the Get Rich Monthly income Plan.  HFC was purchased in January 2012 as part of the perpetual covered call strategy.  Monthly Income subscribers received the $3.10 in dividends and $1,690 in total call option premium.  The total return on HFC during 2012 was 212% for newsletter subscribers.

 

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