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This Monthly Dividend Stock May be Worth a Look

Fifth Street Finance Corp.(FSC) may be an ideal name for aggressive income investors. This is one of the top business development companies. The consensus price target is $11.50. Investors receive a 10.47% dividend with monthly distributions.  First Call consensus has a buy recommendation with a 2.5 rating.

Fifth Street reported net investment income of $0.27 (excluding gains on convert repurchase, diluted), in line with prior quarter and our estimate. This was a result of lower interest income earned on a larger average portfolio. Book value increased by $0.02 following a net $2.5 million unrealized appreciation on investments.

Liquidity: As of this week, FSC increased its available liquidity to $738 million following the post quarter end note issuance, capital raise, and credit facility expansion. FSC is well positioned for the acquisition of Healthcare Financial Group as management works toward its target leverage.

Valuation: Fifth Street is trading 12% premium, 1% above the peer group average, and yielding 10.47%, above the peer group average of 9.1%.

Estimates: Analyst lowered the 2013 estimate to $1.08 (from $1.10) to reflect a larger liquidity drag than previously expected. The 2014 and 2015 estimates remain unchanged at $1.15 and $1.20.

Maintain Buy: FSC is well positioned from a liquidity and capital standpoint to continue to take advantage of a strong pipeline of growth. The next step for the stock is to translate that into higher ROEs by achieving and maintaining higher levels of leverage.

In May, FSC announced that it has entered into an agreement to purchase a specialty lender, Healthcare Finance Group, that provides lending to healthcare companies. FSC will be investing $100 million, financed by cash and liquidity mentioned above.

OnMay 6, 2013, upon expiration of our existing stock repurchase program, the Board of Directors authorized a stock repurchase program to acquire up to$50 millionof outstanding common stock. Stock repurchases under this program would be made through the open market at times and in such amounts as management deems appropriate, provided they are below the most recently published net asset value per share.

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.

PSEC Increases Monthly Dividend by 8.2%

Prospect Capital Corporation (PSEC) announced that Prospect has declared revised monthly cash distributions to shareholders in the following amounts and with the following record and payment dates, representing an 8.2% increase from the previous announcement in early November and representing a dividend yield of 12.8% based on the closing stock price as of December 6, 2012:

11.0000 cents per share for December 2012 (record date of December 31, 2012 and payment date of January 23, 2013); and

11.0025 cents per share for January 2013 (record date of January 31, 2013 and payment date of February 20, 2013).

These dividends mark Prospect’s 53rd and 54th consecutive cash distributions to shareholders and replace the dividends for December 2012 and January 2013 that were previously announced on November 7, 2012.

“Through September 30, 2012 in calendar year 2012, and not including expected excess income in the current December 2012 quarter, Prospect generated net investment income in excess of dividends declared of more than $70 million, or more than $0.33 per outstanding share, representing a significant storehouse of potential future additional dividend value for shareholders,” said John F. Barry, Chairman and Chief Executive Officer of Prospect.

Because of its 2012 record date, Prospect’s 11.0000 cents per share December 2012 dividend should enjoy current 2012 tax rates for shareholders and should not be subject to higher 2013 tax rates envisioned by currently passed United States legislation.

Based on past distributions and assuming its current share count for upcoming dividends, Prospect since inception through its January 2013 dividend will have distributed more than $10.72 per share to original shareholders and approximately $600 million in cumulative distributions to all shareholders.

Prospect expects to declare its February 2013, March 2013, and April 2013 distributions in February 2013.

WisdomTree Enters Monthly income Club

WisdomTree announced that all six ETFs in its U.S. dividend series will pay distributions on a monthly rather than quarterly basis. The move is designed to accommodate investors who want a steadier stream of income.

The asset manager changed the distribution schedule for WisdomTree Total Dividend Fund (DTD) 2.7% yield, WisdomTree LargeCap Dividend Fund (DLN) 2.72% yield, WisdomTree MidCap Dividend Fund (DON) 2.74% yield and WisdomTree SmallCap Dividend Fund (DES) with a 3.38% yield.

The four ETFs are scheduled to make their first monthly distribution on ex-date Nov. 26, according to a press release.

Two other ETFs, WisdomTree Dividend ex-Financials Fund (DTN) 3/1% yield and WisdomTree Equity Income Fund (DHS) 3.45% yield, switched from quarterly to monthly dividend distributions in July 2012.

 

Get Paid Monthly Income from this new REIT with a Strong Buy Recommendation

American Realty Capital Properties, Inc. (NASDAQ: ARCP) is an externally managed real estate company that owns and acquires single tenant free standing commercial real estate properties that are primarily net leased on a medium-term basis generally to investment grade tenants.  The Company commenced operations in September 2011 in conjunction with the closing of its IPO. Prior to that date, ARCP did not hold any real estate properties or have any sources of income or any expenses; the only activity of the Company was limited to organizational activities.

As of September 30, 2012, the Company owned 124 freestanding, single tenant, 100% occupied net leased properties comprised of 2.2 million square feet (excluding one vacant property classified as held-for-sale). These properties are located in 24 states and include 14 tenants, operating in 10 distinct industries.  American Realty Capital has a current dividend yield of 6.93% with monthly distributions.

Funds from operations (“FFO”) for the three months ended September 30, 2012, totaled $1.9 million, or $0.17 per share basic and $0.15 per share fully diluted.  FFO for this period includes one-time net acquisition and transaction related expenses of $0.7 million.  Excluding such one-time costs, core FFO is $2.6 million, or $0.24 per share basic and $0.20 per share fully diluted.

Adjusted funds from operations (“AFFO”) for the three months ended September 30, 2012, totaled $3.1 million, or $0.28 per share basic and$0.24 per share fully diluted.  This represents a 15.0% increase in AFFO per share compared to the second quarter ended June 30, 2012.

For the nine months ended September 30, 2012, FFO totaled $2.7 million, or $0.31 per share basic and $0.28 per share fully diluted.  FFO for this period includes one-time net acquisition and transaction related expenses of $3.0 million.  Excluding such one-time costs, core FFO is$5.7 million, or $0.67 per share basic and $0.60 per share fully diluted.

AFFO for the nine months ended September 30, 2012 totaled $6.5 million, or $0.76 per share basic and $0.69 per share fully diluted.

“Our investment strategy is performing exactly as planned and we are witnessing an increasingly rich pipeline.  We are systematically assembling a well-diversified portfolio of free standing, single tenant properties net leased to predominantly investment grade tenants at prices accretive to our dividend,” stated Nicholas S. Schorsch, Chairman and Chief Executive Officer of ARCP.  “During 2012, we acquired approximately $100 million of investment properties at a weighted average capitalization rate of 9.5%.  We recently announced $36 million of additional acquisitions expected to close during the balance of 2012 at equally attractive pricing.  Our core earnings will be favorably affected by these acquisitions.”

On October 1, 2012, ARCP announced its fourth consecutive dividend increase. The Company’s board of directors authorized and the Company declared, on September 30, 2012, an increase in its annual dividend rate to $0.895 per share, beginning November 9, 2012.  On November 15, 2012, the Company will pay the new annual dividend rate to stockholders of record on November 8, 2012.

This is following three prior dividend increases in March, June and September 2012. On February 27, 2012, the Company’s board of directors authorized and the Company declared an increase in its annual dividend rate from $0.875 to $0.880 per share. Accordingly, on March 15, 2012, the Company paid a dividend of $0.0733 per share to stockholders of record at the close of business on March 8, 2012.

Total dividends paid to common stockholders by the Company were $2.4 million for the three months ended September 30, 2012. For the nine months ended September 30, 2012, dividends totaled $5.6 million.

First Call analysts have a consensus “Strong Buy” recommendation with a 1.3 stock rating.

Buy This Stock with a 7% Dividend Yield for Monthly Dividends

Home Loan Servicing Solutions (HLSS) is an internally-managed owner of non-agency mortgage servicing assets with historically stable valuations and cash flows.  HLSS’ assets are predominately mortgage servicing advances that, along with the related servicing rights, are over-collateralized 30 times by residential real estate. HLSS’ objective is to generate stable, recurring fee-based earnings and dividends throughout the economic cycle.  HLSS is a small cap stock with a market cap of $529 million.

HLSS reported net income of $6.6 million, or $0.37 per ordinary share, for the third quarter of 2012 which was 12% higher than Q2 2012 of $4.7 million, or $0.33 per ordinary share, its first full quarter of operations.  HLLs reported net income of $1.3 million, or $0.31 per share based on 4.2 million weighted average shares outstanding, for the first quarter of 2012.

On October 1, 2012, the Company’s Board of Directors declared a monthly dividend of$0.11 per ordinary share with respect to each of October, November and December 2012.  HLSS has an annual dividend yield of 7.10%.

Home Loan Servicing received gross proceeds of $249.9 million in connection with the follow-on offering of 16,387,500 shares at $15.25 per ordinary share on September 12, 2012. Proceeds from the offering were used to acquire mortgage servicing assets related to non-agency mortgage loans.

On October 19, 2012 Barclays Capital upgraded HOME LOAN SERVICING SOLUTIONS from EQUAL WEIGHT to OVERWEIGHT.

On October 16, 2012 Zacks Investment Research, Inc. upgraded HOME LOAN SERVICING SOLUTIONS from HOLD to BUY.

On October 16, 2012 Merrill Lynch initiated coverage for HOME LOAN SERVICING SOLUTIONS with a BUY recommendation.

First Call analysts have a BUY recommendation with a 2.0 stock rating.

This New Monthly Dividend Payer is an Undervalued Growth and Income Play

Vanguard Natural Resources, LLC (NYSE: VNR) is a publicly traded limited liability company focused on the acquisition, production and development of oil and natural gas properties. Vanguard has significant growth and income potential while also being undervalued at its current stock price.

Vanguard trades at a PE of 7.4 compared to an industry PE average of 14. The Company increased earnings 88% and revenues 35% last quarter compared to the same quarter one year earlier.  Vanguard is projected to grow EPS by 36% next year.  Vanguard has increased cash flow 33% in the last 5 years compared to 12% for the industry.

Vanguard reported consolidated earnings and operations results for the second quarter and six months ended June 30, 2012.  For the quarter, the company reported total revenues of $151,915,000 against $112,509,000 a year ago. Income from operations was $102,301,000 against $61,088,000 a year ago. Net income attributable to the company unit holders was $103,447,000 against $31,799,000 a year ago.

Vanguard announced a public offering of an additional $200 million aggregate principal amount of their 7.875% senior unsecured notes due 2020 at a public offering price of 7.875%. The Company intends to use the net proceeds from this offering to repay a portion of the outstanding borrowings under its senior secured reserve-based credit facility.

Vanguard converted its quarterly dividend to a monthly dividend in July 2012.  The Company is paying 40.20 per month for an annual dividend of $2.40.  This is a current dividend yield of 8.04%.  The Company increased its quarterly dividend 7 straight quarters before converting to a monthly payout.  Vanguard has a 57% dividend payout ratio.

Richard Robert, EVP & CFO, commented, “We have listened to investors and we believe that we are giving them what they want. A monthly distribution should allow investors to better manage their finances by matching their monthly cash outflows with monthly cash inflows. In addition, a monthly distribution will allow us to reward our investors in a timelier manner as we make accretive acquisitions in the future. We believe the decision to pay distributions monthly rather than quarterly will be welcomed by both our current Vanguard unit holders as well as other potential investors looking to invest in high yielding energy securities.”

First Call analysts have a BUY recommendation with a 1.8 stock rating.  The stock has an equity summary score of 7.2 out of 10 for a Bullish outlook.  Vanguard has a 12 month price target of 33.

2 High Yield Dividend Stocks with a Bullish Outlook

While high yield is difficult to come by these days, here are 2 quality stocks with high dividend yields, reasonable valuations and projected growth next year.  Both of these stocks produced significant EPS growth last quarter and have equity summary scores indicating a Bullish outlook.

PennyMac Mortgage Investment Trust (NYSE: PMT) invests primarily in residential mortgage loans and mortgage-related assets.  PennyMac trades at a PE of 8 with a beta of 0.83.

PennyMac increased EPS by 33% last quarter compared to the same quarter a year ago.   The Company is projecting an increase in EPS of 7% next year.

PennyMac has a current dividend yield of 9.43% which has been increased 10% in the last year.

PennyMac is up 40% year to date and 9.3% in the last 4 weeks.  Shares pulled back in August after pricing an upsized underwritten public offering of 15 million shares at $20.93 each. The deal originally intended to sell 12 million shares. Underwriters received a 30-day option to purchase up to 2.25 million additional shares from the company.

PennyMac plans to spend the net proceeds to purchase residential whole mortgage loan portfolios as well as funding continued growth of its correspondent lending business and acquiring additional mortgage loans or other investments, including existing forward purchase agreements.

PennyMac has an equity summary score of 9.1 out of 10 for a VERY Bullish outlook.  PennyMac has a 12-month price target of $25.30.

Vanguard Natural Resources (NYSE: VNR) engages in the acquisition and development of oil and natural gas properties in the United States.

Vanguard increased EPS by 88% last quarter compared to the same quarter a year ago.   The Company is projecting an increase in EPS of 39% next year.  Vanguard has a PEG ratio of 0.41.  Vanguard trades at a PE of 7.2 with a beta of 1.02.

Vanguard dividends are paid on a monthly basis.  Vanguard has a current dividend yield of 8.31% which has been increased 4.35% in the last year.

Vanguard just announced the closing of its previously announced public offering of 6,900,000 common units representing limited liability company interests in the Company at a price of$27.51 per unit.  The 6,900,000 common units include 900,000 common units purchased pursuant to the underwriters’ full exercise of their option to purchase additional common units.

Vanguard intends to use the net proceeds from the offering of approximately $182.3 million, after deducting underwriting discounts and estimated offering expenses, to repay a portion of its indebtedness outstanding under its senior secured revolving credit facility.

Vanguard has an equity summary score of 7.4 out of 10 for a Bullish outlook.  Vanguard has a 12-month price target of $31.50.

Get Monthly Dividends From This Back To School Stock

Founded in 1997, Student Transportation Inc. (NASDAQ: STB) is North America’s third-largest and fastest-growing provider of school bus transportation services, operating more than 8,500 vehicles. STI’s family of local companies delivers safe, reliable and cost-effective transportation solutions to school districts throughout the U.S. and Canada.

Standard Transportation usually purchases a new fleet and then splits the fuel costs with the customer. With the uncertainty of market diesel prices it is more cost-efficient to operate an LPG or CNG vehicle than a diesel engine vehicle.  Standard has additional LPG vehicles scheduled to be deployed for the upcoming school year and we look forward to further fuel savings for our customers. Standard Transportation is committed to helping schools everywhere have safe, economical, and environmentally responsible transportation for their students.  Their success with alternative fuel fleets in Minnesota and California has prompted more customers to make the switch to outsourcing student transportation.

Student Transportation has won six new bid contracts, two in Ontario, two inConnecticut and two in New Hampshire, for 2013 as announced towards the end of March, and secured another eight contracts in Texas and Washington that National Express was required to divest by the U.S. Department of Justice in connection with its purchase of Petermann Partners.

The additional revenues and cash flows from the six acquisitions closed and integrated in the first half of the fiscal year and the nine new bid contracts won for fiscal 2012, along with the recovery of approximately $1.2 million in continued revenue deferrals at the end of the third quarter should continue the positive momentum through the end of the fourth quarter of fiscal 2012,

Third quarter revenue increased $22.3 million to $113.3 million, from $91.0 million and EBITDA improved $6.1 million to $25.5 million, from $19.4 million for the comparable period last year. Net income for the third quarter of fiscal year 2012 increased to $3.0 million or $0.05 per common share compared to net income of $1.6 million or $0.03 per common share for the third quarter of fiscal year 2011.

Student Transportation has continued its practice of approving the announcement of dividends quarterly. Dividends will continue to be paid on a monthly basis to shareholders of record.  Today, investors are looking at an investment in Student Transportation that pays $0.55 annually in monthly distributions. This produces an 8.3% yield at the market price.  Student Transportation will pay a regular monthly cash dividend on October 15, 2012, November 15 and December 17 to shareholders of record at the close of business on September 28, 2012, October 31 and November 30.

Student Transportation’s CEO Denis Gallagher has stated that he’s satisfied with the dividend payment and wants to focus on driving investor value.  His goal is to see the yield drop in the 5%-range through share-price appreciation.  This calculates to a target price of $11.00 which is 66% higher than the current price of $6.63.

New Special Dividend Paying a 24% Yield!

Evolving Systems, Inc. (EVOL), a leading provider of software solutions and services to the wireless, wireline and IP carrier market, announced it will distribute approximately $19.3 million in cash to stockholders in the form of a $1.70 per share, one-time special dividend. The special dividend will be payable on May 29, 2012. If a stockholder sells their shares before May 30, 2012, the stockholder will have to relinquish the dividend to the buyer.  EVOL is trading at $7.10 making the special dividend a 24% dividend yield.

“This will be our second special dividend paid in 2012, underscoring the Board of Directors’ commitment to return value to stockholders,” said Thad Dupper, Chairman and CEO. “Our two special dividends, combined with regular quarterly dividends we began paying in 2010, bring the total cash returned to stockholders to $4.05 per share, or over $45.0 million. At the same time we continue to invest in product development and other growth initiatives and maintain a strong, debt-free balance sheet.”

As of the first quarter ended March 31, 2012, Evolving Systems had cash and cash equivalents combined with long-term investments in marketable debt securities that totaled $31.0 million.

Anixter International Inc. (AXE), a leading global distributor of communication and security products, electrical and electronic wire & cable, fasteners and other small parts, announced that it’s Board of Directors declared the payment of a special dividend to shareholders of $4.50 per common share, or a total cash outlay of approximately $150 million. The special dividend is payable on May 31, 2012 to shareholders of record on May 16, 2012.  AXE is trading at $61.71 for a special dividend yield of 7.29%.

SMTP (STMP) is a leading provider of cloud-based services to facilitate email deliverability, including bulk and transactional sending, reputation management, compliance auditing, abuse processing and issue resolution. Our services provide customers with the ability to increase the deliverability of email with less time, cost and complexity than handling it themselves.  SMTP trades OTC at $1.24 per share for a total dividend yield of 11.5%.

Special Dividend.  We have a cash surplus that has been earned over the last several years in excess of $1.4 million, and we intend to distribute $1.4 million in cash to our shareholders in the form of a Special Dividend, which will be paid on 5/31/12 to shareholders of record as of 5/21/12 (the “Record Date”).  In the event that an outstanding warrant to purchase up to 800,000 shares of common stock at a $0.625 strike price is exercised before the Record Date, the special dividend will be increased to up to approximately $1.9 million.

Quarterly Dividend.  Additionally, we intend to commence the payment of a regular quarterly dividend to our common stockholders, initially in the amount of $200,000 per quarter, which will be included with the special dividend payment and will be paid on 5/31/12 to the same special dividend Record Date shareholders. The initial quarterly dividend represents approximately 90% of one fiscal quarter of our 2011 net after tax earnings. Going forward, we intend to continue regular dividend payments each quarter (approximately 45 days after quarter end), with a general guideline of paying out 80%-90% of each fiscal quarter’s net earnings. We believe that our quarterly dividend payments will generally increase each quarter, as we focus on maintaining strong profitability, with consistent top-line growth.

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