8 High-Return Creating Stocks

When you invest in dividend stocks you need also look at internal return rates. The most popular ratios are return on equity and return on investment.

A company that has a big return on equity and also low debt ratios means that the high ratio was not created by taking debt and boosting earnings. Great for us investors; we own a piece of a high income generating company.

If the company can scale up its sales by taking more debt and issuing new shares, our return could boost. That's also one reason why I look at low debt with good return on equity ratios. If the company also do stock buybacks and hiked dividends, great!

My experience is that no companies fulfill everything. It's no shame when a company suffers and do not meet every optimum value. Each business is volatile and risky.

I've tried to create a screen, based on some return figures. Below are my 8 favorites. At the end of this article, you can find a list with 16 additional stocks.

These are my main criteria:
- Midcap+
- Forward P/E under 15
- Operating Margin over 15 percent
- Debt-to-equity under 1
- Return on Equity 15%+
- Payout half of profits
- Mid-digit Earnigns growth forecasts

8 high return creating stocks, low debt and price ratios included are...

5 Stocks Warren Buffett Keeps An Eye On...

Attached are five more stocks with fundamentals that meet Warren Buffett target criteria. 

I've introduced a few more stocks in this blog earlier this month and I believe that it's a good tool to get new stock ideas in a hot market.

The markets are not cheap for the time being and high-quality stocks have a much higher premium rate. But the good thing is that this should not make it impossible to find new investment targets.

You must have patience to get the right investments at the right prices. Only the disciplined investor makes the better return.

5 stocks with Warren Buffett like criteria are...

5 Stocks That Warren Buffett Would Love: Part II

Yesterday, I wrote about stocks that Warren Buffett would love. 

I introduced five picks that are often mentioned when analysts talk about potential takeover targets by the guru investor from Omaha.

Today I will continue this stock idea spinning by showing you additional companies that fulfill the following criteria:

- Market Capitalization from $15 Billion to $40 Billion

- Capital Expenditures / Net Fixed Assets under 10%

- 5-Year Average Growth in ROIC in Highest 50%

- P/E Ratio Below Average Company Value in Home Market

- Return on Common Equity over 10%

- Excludes Banks, Brokerages, Asset Managers, Technology, Biotechnology Companies

There are a few stocks available on the market that fulfill these restrictions. Some of those stocks are still in his latest portfolio but there are also many fresh ideas as you might have seen in the first part of this article serial.

Additional 5 stocks that Warren Buffett would love are...

Warren Buffett's Targets Part I: Potential White Elephants Of The Guru Investor

Warren Buffett is one of the most trusted and popular investors on the market. He made from a dozen dollars over USD 58 billion. On this blog, I also cover the activities of the guru investor and publish his trades and thoughts.

There are several speculations on the market what Warren Buffett buys next. He has around USD 15 billion in cash, a number that is growing monthly. Some of Warren Buffett's criteria are:

- Market Capitalization from $15 Billion to $40 Billion

- Capital Expenditures / Net Fixed Assets > 10%

- 5-Year Average Growth in ROIC in Highest 50%

- P/E Ratio < Average Company Value in Home Market

- Return on Common Equity > 10%

- Excludes Banks, Brokerages, Asset Managers, Technology, Biotechnology Companies

By screening the market with the above mentioned criteria, there are popping out a few interesting stocks. Some are often discussed like General Mills or Hershey, W.W. Grainger or FedEx.

Big takeovers make sense for Warren Buffett, also when they are higher valuated. More important are the stable cash flows. The strategy is to buy stocks that have big brands and produce products. They buy commodities and create wonderful things for people all over the world.

5 picks that Warren Buffett would like to consider....

General Mills (NYSE:GIS) has a market capitalization of $30.78 billion. The company employs 41,000 people, generates revenue of $17.774 billion and has a net income of $1.793 billion. General Mills’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $3.443 billion. The EBITDA margin is 19.37 percent (the operating margin is 16.04 percent and the net profit margin 10.09 percent).

Financial Analysis: The total debt represents 35.17 percent of General Mills’s assets and the total debt in relation to the equity amounts to 119.44 percent. Due to the financial situation, a return on equity of 28.34 percent was realized by General Mills. Twelve trailing months earnings per share reached a value of $2.69. Last fiscal year, General Mills paid $0.99 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 18.31, the P/S ratio is 1.73 and the P/B ratio is finally 4.73. The dividend yield amounts to 3.08 percent and the beta ratio has a value of 0.20.

Long-Term Stock Price Chart Of General Mills (GIS)

Long-Term Dividend Payment History of General Mills (GIS)

Long-Term Dividend Yield History of General Mills (GIS)

Hershey (NYSE:HSY) has a market capitalization of $21.45 billion. The company employs 12,100 people, generates revenue of $6.644 billion and has a net income of $660.93 million. Hershey’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1.399 billion. The EBITDA margin is 21.07 percent (the operating margin is 16.72 percent and the net profit margin 9.95 percent).

Financial Analysis: The total debt represents 40.10 percent of Hershey’s assets and the total debt in relation to the equity amounts to 183.93 percent. Due to the financial situation, a return on equity of 69.79 percent was realized by Hershey. Twelve trailing months earnings per share reached a value of $3.45. Last fiscal year, Hershey paid $1.56 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 27.80, the P/S ratio is 3.21 and the P/B ratio is finally 20.71. The dividend yield amounts to 2.02 percent and the beta ratio has a value of 0.21.

Long-Term Stock Price Chart Of Hershey (HSY)

Long-Term Dividend Payment History of Hershey (HSY)

Long-Term Dividend Yield History of Hershey (HSY)

W.W. Grainger (NYSE:GWW) has a market capitalization of $17.65 billion. The company employs 21,100 people, generates revenue of $8.950 billion and has a net income of $698.85 million. W.W. Grainger’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1.357 billion. The EBITDA margin is 15.16 percent (the operating margin is 12.64 percent and the net profit margin 7.81 percent).

Financial Analysis: The total debt represents 11.26 percent of W.W. Grainger’s assets and the total debt in relation to the equity amounts to 18.67 percent. Due to the financial situation, a return on equity of 23.97 percent was realized by W.W. Grainger. Twelve trailing months earnings per share reached a value of $11.25. Last fiscal year, W.W. Grainger paid $3.06 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 22.61, the P/S ratio is 1.97 and the P/B ratio is finally 5.84. The dividend yield amounts to 1.46 percent and the beta ratio has a value of 0.92.

Long-Term Stock Price Chart Of W.W. Grainger (GWW)

Long-Term Dividend Payment History of W.W. Grainger (GWW)

Long-Term Dividend Yield History of W.W. Grainger (GWW)

CBS Corporation (NYSE:CBS) has a market capitalization of $37.00 billion. The company employs 20,930 people, generates revenue of $14.089 billion and has a net income of $1.669 billion. CBS Corporation’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $3.594 billion. The EBITDA margin is 25.51 percent (the operating margin is 20.95 percent and the net profit margin 11.85 percent).

Financial Analysis: The total debt represents 22.38 percent of CBS Corporation’s assets and the total debt in relation to the equity amounts to 57.98 percent. Due to the financial situation, a return on equity of 16.24 percent was realized by CBS Corporation. Twelve trailing months earnings per share reached a value of $2.94. Last fiscal year, CBS Corporation paid $0.44 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 20.96, the P/S ratio is 2.63 and the P/B ratio is finally 3.80. The dividend yield amounts to 0.78 percent and the beta ratio has a value of 2.27.

Long-Term Stock Price Chart Of CBS Corporation (CBS)

Long-Term Dividend Payment History of CBS Corporation (CBS)

Long-Term Dividend Yield History of CBS Corporation (CBS)

FedEx (NYSE:FDX) has a market capitalization of $44.34 billion. The company employs 112,000 people, generates revenue of $44.287 billion and has a net income of $1.561 billion. FedEx’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $5.538 billion. The EBITDA margin is 12.50 percent (the operating margin is 5.76 percent and the net profit margin 3.52 percent).

Financial Analysis: The total debt represents 8.91 percent of FedEx’s assets and the total debt in relation to the equity amounts to 17.19 percent. Due to the financial situation, a return on equity of 9.72 percent was realized by FedEx. Twelve trailing months earnings per share reached a value of $5.19. Last fiscal year, FedEx paid $0.56 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 27.37, the P/S ratio is 1.00 and the P/B ratio is finally 2.60. The dividend yield amounts to 0.42 percent and the beta ratio has a value of 1.50.

Long-Term Stock Price Chart Of FedEx (FDX)

Long-Term Dividend Payment History of FedEx (FDX)

Long-Term Dividend Yield History of FedEx (FDX)

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*I am long GIS. I receive no compensation to write about these specific stocks, sector or theme. I don't plan to increase or decrease positions or obligations within the next 72 hours.

For the other stocks: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I receive no compensation to write about any specific stock, sector or theme.

Yields Dividend Champions | Yields Dividend Contenders | Yields Dividend Kings | High-Yield Large Cap | +10% Yielding Stocks | Dividend Aristocrats |

15 Dividend Contenders With Over 20% Return on Equity and Return on Investment

Dividend growth stocks with very high returns on equity and returns on investment originally published at long-term-investments.blogspot.com. A solid investment delivers also solid returns over the time. Dividend growth is not the only criteria for a good investment. There are also many dividend growth stocks outside with low or negative return on investments and return on equity ratios.

Today I screened the Dividend Contenders Database by stocks with high return ratios. I fixed the 20 percent level in order to get the best results.

Only 15 companies fulfilled both, a return on equity as well as a return on investment over 20 percent. The difference between those two ratios is that the return on investment does not include the leverage effect. A corporate with high debts will automatically generate high returns on equity. The second ratio is a performance measure that looks only at the investment by dividing the investment return by the costs of the investment.

One High-Yield is below the results and 10 stocks got a buy or better rating by brokerage firms. Leverage is the key for high returns in my screen. As you might see in the attached sheet, the debt ratios are modestly high but in the end, the investor will pay a higher price for a leveraged company.

The Best Industrial Dividend Stocks 2012

Industrial Goods Dividend Stocks With High Return On Investments And Big Operating Margins Researched By Dividend Yield - Stock, Capital, Investment. The U.S. economy has a strong industrial sector. 350 stocks belong to the sector that has a total market capitalization of USD 58.64 trillion. He is still cheap with a P/E ratio of 12.67 and a dividend yield of 2.27 percent. The best yielding stocks from the sector are from the waste management and manufacturing housing industry.

The Best Consumer Dividend Stocks

Consumer Goods Dividend Stocks With High Return On Investments And Big Operating Margins Researched By Dividend Yield - Stock, Capital, Investment. Consumer goods stocks are of low volatility. Consumers rarely change their behavior in terms of preferred brands when the economy is getting worse. That’s why many consumer goods companies are so stable. They grow with their population/ customer base and could pay stable dividends.

I screened the consumer goods sector by stocks with an operating margin and return on investment over 15 percent. In addition, the stock should have a minimum dividend yield of two percent. Fifteen companies fulfilled these criteria of which two are high yields.

The Best Dividend Stocks From The Service Sector

Services Dividend Stocks With High Return On Investments And Big Operating Margins Researched By Dividend Yield - Stock, Capital, Investment. Service is characterized by hard work and low margins but there are some companies with wonderful business models that generate double digit margins within the service sector. I think about McDonalds or Starbucks. They created a huge shareholder value due to the global expansion of the brand and realized big economies of scale.

I screened the service sector by stocks with an operating margin and return on investment over 15 percent, a dividend yield over two percent and finally a market capitalization over USD 300 million. Thirteen companies fulfilled these criteria of which four are high yields and six are recommended to buy or better.

The Best Basic Material Dividend Stocks

Basic Material Dividend Stocks With High Return On Investments And Big Operating Margins Researched By Dividend Yield - Stock, Capital, Investment. Basic materials are the source of all economic activities but their prices are very cyclic and something like the fever curve of the economy. In booming times, basic resources are rare and prices high; therefore margins are very high.

I screened the basic material sector by the most profitable stocks (stocks with an operating margin and return on investment over 20 percent) with a dividend yield over 1 percent. Because of the huge amount of results (24 stocks), I selected only those stocks with a market capitalization above USD 2 billion. Thirteen companies’ fulfilled these criteria of which five are high yields and nine are recommended to buy or better.

The Most Profitable Utility Dividend Stocks

Utility Dividend Stocks With High Return On Investments And Big Operating Margins Researched By Dividend Yield - Stock, Capital, Investment. Utilities are stable dividend payer but they only generate slow growth for investors and they are very capital intensive. Nevertheless, people can make money with utility stocks.

I screened the utility sector by the most profitable stocks (stocks with an operating margin and return on investment over 5 percent) with a dividend yield over 4 percent. Exactly nine companies fulfilled these criteria. Most of the results come from the gas utility industry. Five stocks have a buy or strong buy rating.

14 High Profitable Technology Stocks With A Yield Over 3%

Technology Dividend Stocks With High Return On Investments And Big Operating Margins Researched By Dividend Yield - Stock, Capital, Investment. Technology stocks are characterized by high growth, high margins and low dividends. They normally pay low dividends because they want to finance new technologies with high growth potential. Many of the big IT companies serve billions of cash but they don’t know where to invest it.

I screened the technology sector by the most profitable stocks (stocks with an operating margin and return on investment over 20 percent) with a dividend yield over 3 percent. Exactly fourteen companies fulfilled these criteria. Most of the results come from the semiconductor or communication industry. Four stocks have a double digit yield and five are recommended to buy or they have a strong buy rating.

7 Most Profitable Healthcare Dividend Stocks With Great Yields

Healthcare Dividend Stocks With High Return On Investments And Big Operating Margins Researched By Dividend Yield - Stock, Capital, Investment. Healthcare dividend stocks delivered a fantastic return over the recent twenty years. Now, they are struggling due to the fact that most of their patents are drain off within the upcoming years. They have no serious alternative to compensate the expected revenue losses and to drive growth. Companies with high margins will survive the consolidation best. Here is a little screen of dividend stocks from the healthcare sector that have the best margins and returns. Both measured by a return on investment and an operating margin of more than 20 percent. Seven stocks fulfilled these criteria of which five come from the drug manufacturing industry. Also five have a current buy or better recommendation.

11 High Yield Technology Stocks With Big Return On Equity

High Yield Technology Stocks With Big Return On Equity by Dividend Yield - Stock, Capital, Investment. Here is a current sheet stocks from the technology sector with a dividend yield of more than 5 percent as well as a return on equity of more than 25 percent. 11 stocks from the sector fulfilled these criteria. Roughly 45 percent of the results come from the wireless communication industry.

Here are the 3 top stocks by dividend yield:

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Partner Communications (NASDAQ:PTNR) has a market capitalization of $1.75Billion. The company employs 6,068 people, generates revenues of $1,822.00 million and has a net income of $339.34 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $672.95 million. Because of these figures, the EBITDA margin is 36.93 percent (operating margin 26.91 percent and the net profit margin finally 18.62 percent).


The total debt representing 66.04 percent of the company’s assets and the total debt in relation to the equity amounts to 593.61 percent. Due to the financial situation, the return on equity amounts to 96.06 percent. Finally, earnings per share amounted to $1.87 of which $2.14 were paid in form of dividends to shareholders.


Here are the price ratios of the company: The P/E ratio is 6.04, Price/Sales 0.97 and Price/Book ratio 10.36. Dividend Yield: 17.39 percent. The beta ratio is 0.89.

Long-Term Stock Chart Of Partner Communications... (Click to enlarge)

Cellcom Israel (NYSE:CEL) has a market capitalization of $2.14Billion. The company employs 4,681 people, generates revenues of $1,818.73 million and has a net income of $352.44 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $726.73 million. Because of these figures, the EBITDA margin is 39.96 percent (operating margin 29.09 percent and the net profit margin finally 19.38 percent).


The total debt representing 71.06 percent of the company’s assets and the total debt in relation to the equity amounts to 1,249.56 percent. Due to the financial situation, the return on equity amounts to 361.12 percent. Finally, earnings per share amounted to $3.29 of which $3.78 were paid in form of dividends to shareholders.


Here are the price ratios of the company: The P/E ratio is 6.52, Price/Sales 1.16 and Price/Book ratio 23.02. Dividend Yield: 16.02 percent. The beta ratio is 0.71.

Long-Term Stock Chart Of Cellcom Israel Ltd. (Click to enlarge)

Telefonica S.A. (ADR) (NYSE:TEF) has a market capitalization of $89.96Billion. The company employs 285,089 people, generates revenues of $83,489.58 million and has a net income of $13,845.05 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $35,433.28 million. Because of these figures, the EBITDA margin is 42.44 percent (operating margin 27.12 percent and the net profit margin finally 16.58 percent).


The total debt representing 47.08 percent of the company’s assets and the total debt in relation to the equity amounts to 249.88 percent. Due to the financial situation, the return on equity amounts to 44.03 percent. Finally, earnings per share amounted to $8.75 of which $5.36 were paid in form of dividends to shareholders.


Here are the price ratios of the company: The P/E ratio is 2.25, Price/Sales 1.12 and Price/Book ratio 0.88. Dividend Yield: 10.86 percent. The beta ratio is 1.01.

Long-Term Stock Chart Of Telefonica S.A. (ADR) (Click to enlarge)

Take a closer look at the full table. The average price to earnings ratio (P/E ratio) amounts to 8.4 while the forward P/E ratio is 8.4. The dividend yield has a value of 9.2 percent. Price to book ratio is 6.3 and price to sales ratio 1.3. The operating margin amounts to 24.3 percent.

Here is the table with some fundamentals:

11 High Yield Technology Stocks With Big Return On Equity (Click to enlarge)

Related stock ticker symbols:

PTNR, CEL, TEF, CNSL, WIN, TEO, MBT, USMO, WRLS, TMX, TCCO

Selected Articles:

· 33 Technology High Yields

· 11 High Margin Technology Stocks With Best Dividends

· 14 Technology Stocks With Cheap Price/Cash Ratios

· Low Debt Dividend Aristocrats With High ROE

· 8 Wireless Communication Stocks With Highest Dividend Yield

13 Low Debt Consumer Goods Stocks With Best Dividends And High ROE

Consumer Goods Stocks With High Return On Equity And Best Dividend Yield by Dividend Yield - Stock, Capital, Investment. Here is a current sheet of stocks from the consumer goods sector with low debt ratios (debt to equity of less than one). Despite the low leverage, stocks from the screen have a high return on equity due to high profits in relation to shareholders equity. Finally, all stocks have a minimum dividend yield of 3 percent. 13 stocks fulfilled these criteria of which 6 yielding above 4 percent.

Here is the table with some fundamentals:

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 Low Debt Consumer Goods Stocks With Best Dividends and High ROE (Click to enlarge)

Take a closer look at the full table. The average price to earnings ratio (P/E ratio) amounts to 13.5 while the forward price to earnings ratio is 12.1. The dividend yield has a value of 4.2 percent. Price to book ratio is 4.1 and price to sales ratio 2.2. The operating margin amounts to 20.0 percent.

Related stock ticker symbols:

CHKE, RAI, RMCF, UG, FHCO, KOSS, DEER, UL, UN, HAS, MAT, ALV, PKG

Selected Articles: 

· 14 Cheap Consumer Goods Dividend Stocks By Price-to-Free Cash Flow

· 13 Low Beta Consumer Goods Stocks With Highest Yield

· 11 Best Yielding Consumer Stocks With A ROI Above 25 Percent

· 20 Best Yielding Consumer Goods Stocks With A 5-Year EPS Growth Above 10 percent

5 Best Dividend Stocks With Sustainable Growth

5 Sustainable Dividends for Your Portfolio By Fool. In my analysis today, I looked for profitable companies that pay dividends over 5%, pay out less than 100% of earnings as dividends, and have an ROE over 20%. I narrowed the list to five companies that meet all these criteria and have a sustainable growth rate over 5%. I feel that they would be a welcome addition to any portfolio. Although the companies are in various industries, they compare favorably with one another.


Here are the results:

Company	Dividend Yield	Payout Ratio	Return on Equity	Sustainable Growth Rate
Altria Group (NYSE: MO  )	6.20%	93%	74.80%	5.40%
AstraZeneca (NYSE: AZN  )	6.00%	44%	38.00%	21.20%
Eli Lilly (NYSE: LLY  )	5.30%	48%	38.60%	20.10%
National Grid (NYSE:NGG  )	5.90%	49%	32.60%	16.50%
Southern Copper (NYSE:SCCO  )	7.80%	83%	51.00%	8.90%

Related Ticker:
MO, AZN, LLY, NGG, SCCO

Source: Fool.com

High Yield Large Caps With Biggest Return On Equity

High Yielding Large Capitalized Stocks With Biggest Return On Equity by Dividend Yield - Stock, Capital, Investment. Here is a current sheet of large capitalized stocks (more than $10 billion) with a dividend yield above 5 percent as well as a return on equity of more than 20 percent. 16 stock fulfilled these criteria of which 4 yielding above 7 percent.

Here is the table with some fundamentals:

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High Yield Large Caps With Biggest Return On Equity (Click to enlarge)

Take a closer look at the full table of high yielding large capitalized stocks with big return on equity. The average price to earnings ratio (P/E ratio) amounts to 12.5 while the average forward P/E ratio is 11.2. The dividend yield has an average value of 6.7 percent. Price to book ratio is 4.8 and price to sales ratio 2.2. The operating margin amounts to 26.8 percent.

Related stock ticker symbols:

VIV, TEF, YPF, MBT, SCCO, SID, CPL, MO, AZN, NGG, RAI, TMX, GSK, LLY, SKM, STO,  

Selected Articles:

· 17 Large Cap High Yields Close To 52-Week High

· 15 Large Cap High Yields Close To 52-Week Lows

· Cheapest Large Caps With Highest Expected Growth As Of August 2011

· 13 Financial Mid- And Large Caps With Highest Return On Equity And Long-Term Growth