High-yield investing is very interesting especially in times of low interest rates. The best category of high-yield investing is to trade stocks with very high yields (double digit yields). But the risks (e.g. dividend cut) should not be underestimated.
For a margin trader it is still an attractive opportunity, especially shortly before ex-dividend date. If you own a stock before this date, you get the next dividend payment. In the case of a double-digit annual yield, you should earn at least 2.5 percent for a very short period of investing. I screened my database by stocks with a very high yield (more than 10 percent) as well as ex-dividend date within the upcoming week (February 13 - 19). Exactly seven stocks fulfilled these criteria. These are the detailed results:
1. ARMOUR Residential REIT (ARR) has a market capitalization of $989.86 million. The company generates revenue of $9.39 million and has a net income of $6.54 million. The earnings before interest, taxes, depreciation and amortization ((EBITDA)) amounts to $6.39 million.
Here are the price ratios of the company: The P/E ratio is 23.04, Price/Sales 105.44 and Price/Book ratio 1.08. Dividend Yield: 18.57 percent. The beta ratio is 0.17. The ex-dividend date is February 13, 2012.
2. Teekay Tankers (TNK) has a market capitalization of $211.07 million. The company generates revenue of $139.48 million and has a net income of $16.31 million. The earnings before interest, taxes, depreciation and amortization amounts to $80.83 million.
Here are the price ratios of the company: The P/E ratio is 114.72, Price/Sales 2.24 and Price/Book ratio 0.48. Dividend Yield: 17.73 percent. The beta ratio is 1.25. The ex-dividend date is February 16, 2012.
3. PennyMac Mortgage Investment Trust (PMT) has a market capitalization of $532.30 million. The company generates revenue of $128.61 million and has a net income of $64.44 million. The earnings before interest, taxes, depreciation and amortization amounts to $89.44 million.
Here are the price ratios of the company: The P/E ratio is 7.56, Price/Sales 4.06 and Price/Book ratio 0.97. Dividend Yield: 11.74 percent. The beta ratio is not calculable. The ex-dividend date is February 15, 2012.
4. Apollo Investment (AINV) has a market capitalization of $1.39 billion. The company generates revenue of $348.02 million and has a net income of $180.41 million. The earnings before interest, taxes, depreciation and amortization amounts to $180.41 million.
Here are the price ratios of the company: The P/E ratio is not calculable, Price/Sales 3.98 and Price/Book ratio 0.70. Dividend Yield: 11.38 percent. The beta ratio is 1.77. The ex-dividend date is February 15, 2012.
5. Fifth Street Finance (FSC) has a market capitalization of $847.65 million. The company generates revenue of $125.16 million and has a net income of $30.21 million. The earnings before interest, taxes, depreciation and amortization amounts to $80.78 million.
Here are the price ratios of the company: The P/E ratio is 31.75, Price/Sales 6.77 and Price/Book ratio 1.02. Dividend Yield: 11.17 percent. The beta ratio is 1.00. The ex-dividend date is on February 13, 2012.
6. Eca Marcellus Trust I (ECT) has a market capitalization of $389.25 million. The company generates revenue of $22.67 million and has a net income of $21.02 million. The earnings before interest, taxes, depreciation and amortization amounts to $21.02 million.
Here are the price ratios of the company: The P/E ratio is 9.67, Price/Sales 9.23 and Price/Book ratio 1.15. Dividend Yield: 10.76 percent. The beta ratio is not calculable. The ex-dividend date is on February 16, 2012.
7. AllianceBernstein (AB) has a market capitalization of $1.51 billion. The company generates revenue of $162.22 million and has a net income of $134.16 million. The earnings before interest, taxes, depreciation and amortization amounts to $162.22 million.
Here are the price ratios of the company: The P/E ratio is 9.97, Price/Sales 8.48 and Price/Book ratio 0.93. Dividend Yield: 10.03 percent. The beta ratio is 1.76. The ex-dividend date is February 16, 2012.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
A company earns a profit. The Board of Directors and the members of company, which are elected by the stockholders (the owners), has a meeting and listens to management's recommendation about how much of the profit, should be reinvested in growth. How much should be used to pay down debt, how much should be used to buy back stock, and how much should be mailed to the owners. That last part - the money mailed to the owners - is called a dividend.
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