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1/16/2013

13 Cheap High Yielding Stocks With Low Volatility

High yielding large capitalized stocks with low beta and cheap price ratios originally published at "long-term-investments.blogspot.com". I often look for higher capitalized stocks which give me a margin of safety. I don’t talk about a discount to the fair value or cheap prices. I mean a low volatility stocks. Stocks with a low beta ratio have a lower volatility than the whole market but they also have a lower upside potential if the market goes up. I love low volatility stocks because I am like everybody else an anxious investor when I invest big money on a single bet.

If the low beta stocks also have a low valuation, it could be interesting for me. You can find a full list of higher capitalized high-yield stocks with low beta ratios below. In total, there are 13 companies with a market capitalization over USD 2 billion and a yield above the 5 percent mark that have beta ratios of less than 0.5 and a forward P/E of less than 15.


The results are dominated by residential REITS. I personally don’t like this investment category. Sure you can make money with it but growth is very capital expensive. You sit on your investment and wait for rental price increases or decreasing vacancy rates. That’s not very funny for a long-term growth investor like me. As you see, there is also a huge debt burden on the stocks which exceeds the amount of equity by a few factors. Gas utilities and my favorites from the cigarettes industry are much more interesting.


Five of the results have a very high yield of more than 10 percent and seven have a current buy or better recommendation. What do you think about the screening results? Do you own some of the mentioned stocks? Let me know and discuss the pros and cons in the box below.


Here are my favorite stocks:
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AmeriGas Partners (NYSE:APU) has a market capitalization of $3.65 billion. The company employs 8,660 people, generates revenue of $2.921 billion and has a net income of $12.67 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $307.52 million. The EBITDA margin is 10.53 percent (the operating margin is 5.38 percent and the net profit margin 0.43 percent).

Financial Analysis: The total debt represents 52.64 percent of the company’s assets and the total debt in relation to the equity amounts to 166.40 percent. Due to the financial situation, a return on equity of -1.05 percent was realized. Twelve trailing months earnings per share reached a value of $0.75. Last fiscal year, the company paid $3.10 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 52.43, the P/S ratio is 1.25 and the P/B ratio is finally 2.59. The dividend yield amounts to 8.13 percent and the beta ratio has a value of 0.33.


”Long-Term
Long-Term Stock History Chart Of AmeriGas Partners (APU)
”Long-Term
Long-Term Dividends History of AmeriGas Partners (APU)
”Long-Term
Long-Term Dividend Yield History of AmeriGas Partners (APU)

Altria Group (NYSE:MO) has a market capitalization of $66.38 billion. The company employs 9,900 people, generates revenue of $23.800 billion and has a net income of $3.393 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $6.321 billion. The EBITDA margin is 26.56 percent (the operating margin is 25.50 percent and the net profit margin 14.26 percent).

Financial Analysis: The total debt represents 37.04 percent of the company’s assets and the total debt in relation to the equity amounts to 371.98 percent. Due to the financial situation, a return on equity of 76.13 percent was realized. Twelve trailing months earnings per share reached a value of $1.92. Last fiscal year, the company paid $1.58 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 17.08, the P/S ratio is 2.79 and the P/B ratio is finally 18.21. The dividend yield amounts to 5.37 percent and the beta ratio has a value of 0.42.


”Long-Term
Long-Term Stock History Chart Of Altria Group (MO)
”Long-Term
Long-Term Dividends History of Altria Group (MO)
”Long-Term
Long-Term Dividend Yield History of Altria Group (MO)

Entergy Corporation (NYSE:ETR) has a market capitalization of $11.26 billion. The company employs 14,682 people, generates revenue of $11.229 billion and has a net income of $1.367 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $3.115 billion. The EBITDA margin is 27.74 percent (the operating margin is 17.93 percent and the net profit margin 12.18 percent).

Financial Analysis: The total debt represents 30.43 percent of the company’s assets and the total debt in relation to the equity amounts to 134.03 percent. Due to the financial situation, a return on equity of 15.43 percent was realized. Twelve trailing months earnings per share reached a value of $3.96. Last fiscal year, the company paid $3.32 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 15.99, the P/S ratio is 1.00 and the P/B ratio is finally 1.25. The dividend yield amounts to 5.24 percent and the beta ratio has a value of 0.48.


”Long-Term
Long-Term Stock History Chart Of Entergy Corporation (ETR)
”Long-Term
Long-Term Dividends History of Entergy Corporation (ETR)
”Long-Term
Long-Term Dividend Yield History of Entergy Corporation (ETR)


Take a closer look at the full list of the safest high-yield stocks at the market. The average P/E ratio amounts to 19.98 and forward P/E ratio is 10.69. The dividend yield has a value of 9.25 percent. Price to book ratio is 2.65 and price to sales ratio 3.97. The operating margin amounts to 34.33 percent and the beta ratio is 0.37. Stocks from the list have an average debt to equity ratio of 3.51.

Here is the full table with some fundamentals (TTM):

13 High-Yield Stocks With Low Beta Ratios (Click to enlarge)

If you like this list, please give us a Facebook Like, make a tweet or post a comment below!

Related stock ticker symbols:
AGNC, ARR, CYS, NLY, HTS, MFA, SPH, APU, CLMT, FE, MO, LO, ETR

Selected Articles:


*I am long MO, LO. 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.



2 comments:

  1. Anonymous1/16/2013

    While many people simply look for dividend paying equities to provide a source of income, for the long-term investor it is imperative that income keep up with inflation. Dividends without growth can essentially result in an income stream that remains relatively static over time. In contrast, if dividends grow over time the effects of inflation may be mitigated. The best way for a company to grow dividends over time is by growing earnings. MO and LO are the best picks.

    ReplyDelete
  2. Thanks for sharing your favorite stocks and some background information on them. I like finding and researching about stocks that I might be thinking about investing in.

    ReplyDelete

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