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High Yield Dividend Stocks Gaining in a Down Market

U.S. stocks fell on Thursday and could be in line for more weakness as worries about Washington’s ability to find a timely solution to the “fiscal cliff” dominate investor thinking in coming weeks.

The S&P 500 dropped for a second day and closed below its 200-day moving average for the first time in five months.  The moving average is a measure of the market’s long-term trend, and a significant breakthrough that level would be seen as a sign of weakness. Just minutes before the closing bell, stocks accelerated their declines and the S&P 500 fell more than 1 percent.

Since reaching a 52-week closing high of 1,465.77 on Sept. 14, the S&P 500 has dropped 6 percent. On Wednesday, a day after Democratic President Barack Obama defeated Republican Mitt Romney in the U.S. election, the benchmark S&P 500 dropped more than 2 percent for its biggest one-day percentage decline since June 1.

The post election market selloff is based on perceived changes in fiscal policy.  While many investors are concerned about changes to dividend and capital gains, the best bet is to continue to look for long-term investments.

The list below shows the best performing dividend stocks over the past 5 trading days that are considered buys or better by First Call analyst consensus.  All of these stocks have a dividend yield of 3% or higher with a 5-day price performance of 4.85% or better.  Highlights include:

Telular Corporation (WRLS), a global leader in helping businesses use wireless networks for remote monitoring and tracking, announced revenue was up 24% year-over-year to $13.1 million in the fourth quarter and up 18% to$48.4 million for the full year.

Ryanair Holdings Plc (RYAOF) increased fiscal Q2 profit 23% and raised its forecast for full-year earnings, Bloomberg reports.

Questcor Pharmaceuticals (QCOR) reported Q3 earnings of $0.97 per share, versus the Capital IQ consensus of $0.76. Revenues were $140.3 million, versus the analyst estimate of $128.99 million.  In the same period last year, the company reported EPS of $0.37 on revenues of $59.8 million.

Mission West Properties, Inc. (MSW) announced that it has entered into two agreements to dispose of all of its real estate assets for an enterprise value of approximately $1.3 billion, which was unanimously approved by its Board of Directors.  Following completion of these transactions, Mission West intends to liquidate after satisfying outstanding debts, applicable taxes and related transaction costs. Mission West currently estimates these transactions will result in a distribution to stockholders (and the O.P. unit holders that elect to redeem their O.P. units) in the range of $9.20 to $9.28 per share in cash, although the amount ultimately distributed to stockholders may be below this range.

High Yield Dividend Stocks Gaining in a Down Market

Company Name Symbol Security Price Dividend Yield Price Performance (5   Days) First Call Consensus Recommendation
$10.67 4.57% 9.60% Buy (1.7)
$35.49 6.19% 9.12% Buy (2.0)
$25.20 3.09% 8.70% Buy (2.1)
$5.50 4.00% 8.70% Buy (2.0)
$8.90 5.85% 7.63% Buy (2.3)
$8.90 5.60% 7.13% Buy (2.0)
$66.58 3.33% 5.22% Buy (2.0)
$26.09 3.20% 5.21% Buy (2.1)
$36.73 4.11% 5.03% Buy (2.4)
$8.73 4.14% 4.85% Buy (1.8)


New Dividend Stocks to Watch

Dividend stocks are still in vogue as income investors seek rates in the paltry low interest rate environment.  This has placed a premium on many blue-chip stocks with stable dividends.  The other impact is the number of companies that have initiated a new dividend in the past year.  These companies are starting with lower yields but their payouts indicate they will be raising their dividends in the future.  Here are 3 new dividend payers to add to your watch list for the coming months.

Oiltanking Partners (OILT) is a master limited partnership engaged in independent storage and transportation of crude oil, refined petroleum products and liquefied petroleum gas.  OILT reported first quarter 2012 net income of $15.9 million, or $0.40 per unit on a basic and diluted basis, compared to first quarter 2011 net income of $7.6 million. Adjusted EBITDA increased 21% to $20.2 million for the first quarter of 2012, compared to $16.7 million for the first quarter of 2011.  Revenues increased approximately $4.3 million, or 14.5%, to $34.3 million during the 2012 quarter, mainly attributable to additional revenues from the new storage capacity placed into service in December 2011 and an escalation in storage fees.  Since the completion of the initial public offering in July of 2011, OILT has announced over $200 million of organic growth projects to significantly expand their pipeline connectivity, flexibility and capacity, and acquire nearby land to support our announced expansions.

OILT trades at $32.59 with a market cap of $1.27 billion.  OILT declared a cash distribution for the first quarter of 2012 of $0.35 per unit, or $1.40 per unit on an annualized basis, for an annualized dividend yield of 4.29%.  The increased distribution represents a 2.9% increase over the prior quarter distribution of $0.34 per limited partnership unit.   OILT has a 33% dividend payout ratio so dividends will continue to be increased for this MLP.

Core-Mark (CORE) is one of the largest marketers of fresh and broad-line supply solutions to the convenience retail industry in North America. Core offers a full range of products, marketing programs and technology solutions to approximately 29,000 customer locations in the U.S. and Canada. The company reported March 31 interim earnings of $0.31 versus $0.04 the previous year. The company’s latest interim earnings were above analysts’ expectations. Core-Mark’s earnings for the year 2012 are projected to advance roughly 59%.  We project it will grow with average persistence and at a long term rate of 14%. Its overall financial quality is high versus other firms.

CORE is trading at $49.26 with a market cap of $560 million.  CORE initiated dividend payments on October 2011 with a current dividend yield of 1.39%.  CORE has a dividend payout ratio of 13%. CORE has been upgraded by 5 brokerages in the past month.

Xyratex Ltd (XRTX) provides modular solutions for the enterprise data storage industry and hard disk drive (HDD) capital equipment for the HDD industry.  XRTX has sold off in the previous quarter making it a potential rebound stock.  For the second quarter, GAAP net income was $7.0 million, or $0.24 per diluted share, compared to GAAP net loss of $4.6 million, or $0.15 per share, in the same period last year.  Non-GAAP net income was $9.3 million, or $0.32 per diluted share, compared to non-GAAP net loss of $1.9 million, or $0.06 per share, in the same quarter a year ago.  Gross profit margin in the second quarter was 16.5%, compared to 12.9% in the same period last year.  During the quarter the Company recommenced repurchases of shares under the previously announced share repurchase plan. The Company repurchased 306,353 of its common shares during the quarter at a total cost of $3.6 million.

The board of directors at Xyratex approved a dividend of 0.075 per share. The dividend is payable on August 1, 2012 to shareholders of record on July 19, 2012.  XRTX has increased its dividend 50% since starting payments on August 2011.  XRTX has a dividend yield of 2.77% with a 15% payout.  XRTX has an equity summary score of 9.0 out of 10 for a Bullish Outlook.

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