Monday, August 15, 2011

Stocks I Discussed at the Money Show Part 3

Last Wednesday, August 10, I gave a speech at the MoneyShow on high dividend stocks. I you missed my first two articles on the stocks I covered, you can see them here and here. My goal was to provide high yield stock ideas from various industries including energy, mortgages, inflation protection, real estate, utilities, entertainment, telecommunications, financial, and speculation.

One sector that you wouldn't expect to find high yield stocks is the entertainment field. Shaw Communications, Inc. (SJR), which closed at 20.34 last Wednesday, is in the broadband cable television business and sports a yield of 4.3%. What is really amazing is that it is one of the few straight stocks (not REITs, not CEFs, not MLPs) that pays dividends monthly. Shaw is also involved in Internet services, digital phone services, telecommunications, and satellite direct-to-home services.

The stock trades at 13.2 times forward earnings. Quarterly earnings for the latest quarter ending May 31 were up 23.2% on a revenue increase of 36.1%. The company has excellent dividend coverage; dividends incur $413.76 million in payouts, easily covered by $1.22 billion in operating cash flow.

Alaska Communications (ALSK) is a telecom company that pays an incredibly high yield of 12.1% payable quarterly, and closed at 7.07 last Wednesday. The company is involved in both landline and wireless communications. For the latest quarter, it had quarterly revenue growth of 0.5%, with enterprise revenue increasing 6.9%, and wireless revenue rising 4.9%. ALSK pays out $38.87 million in dividends which are covered by $73.81 million in operating cash flow.

The stock trades at 19.2 times forward earnings, which is a bit on the high side. The population of Alaska continues to grow. From 2000 to 2010, the population of Alaska increased by 13.3% versus 9.7% for the United States overall.

In the financial services industry, there is a high dividend payer that many investors are unaware of. The company is BGC Partners, Inc. (BGCP), which pays 10.3% payable quarterly, and closed at 6.31 last Wednesday. BGC is an interdealer investment broker which offers voice and electronic executions and operates multiple real-time electronic marketplaces.

The company pays out 75% to 85% of earnings and rewarded investors with a 21% dividend increase in May. It has $81.45 million in dividend payouts with $143.19 million in operating cash flow. The stock carries a very favorable forward PE of 7.9.

Earnings should continue to rise as electronic trading is increasing over voice. With electronic trading there are far fewer costs than voice operations. This should generate increased margins. Electronic trading grew by 31% in 2010 year over year.

If you like high dividend stock ideas, check out the numerous lists of high dividend stocks at, that can be downloaded, updated, and sorted. Also, stay tuned for upcoming articles on more stocks from the MoneyShow.

Disclosure: Author did not own any of the above at the time the article was written.


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