If you are looking for stocks that pay high yields, the current market correction gave us some at a discounted price. GuruFocus' All-In-One Screener provides a selection of five that are worth putting on a watchlist.
Great Northern Iron Ore (GNI)Â owns interests in fees, both mineral and nonmineral lands, on the Mesabi Iron Range in northeastern Minnesota. The company's properties span two counties (St. Louis and Itasca) in northeastern Minnesota, extend from Hoyt Lakes on the east end of the Mesabi Iron Range to Grand Rapids on the west end of the Mesabi Iron Range.
The company looks undervalued at the current price of $8. The DCF calculator gives a fair value of $76.63 with a current margin of safety of 89%, and the Peter Lynch earnings line gives a fair value of $142.8. It pays its shareholders an annual dividend yield of 102.70% with a payout ratio of 107%. The yield has a five-year growth rate of 4.40%. The company did not pay its last yield of June, so it is worthwhile to do a deeper analysis in case of buying.
During the second quarter the company raised the production of iron ore 9% higher than the same quarter of 2014 and was 7% above the first quarter of 2015. Hard-coking coal production rose by 15% compared to 2Q14.
The company signed the Oyu Tolgoi Underground Mine Development and Financing Plan, which is a significant step and provides a pathway forward in addressing shareholder matters to restart underground development.
Great Northern is trading with a P/E ratio of 0.90; during the last 12 months the price has dropped by 61%, trading now 72.35% below its 52-week high and 10.05% above its 52-week low.
Another high-yield company is Alliance Resource Partners LP (ARLP), a diversified producer and marketer of coal to United States utilities and industrial users. It operates 10 underground mining complexes in Illinois, Indiana, Kentucky, Maryland and West Virginia.
The company looks undervalued at the current price of $22.6. The DCF calculator gives a fair value of $69.34 with a current margin of safety of 67%, and the Peter Lynch earnings line gives a fair value of $64.9. It pays its shareholders an annual dividend yield of 11.57% with a payout ratio of 63%. The yield has a five-year growth rate of 11.40%.
Alliance Resource reported second quarter with a decrease of 21.1% for net income compared to the same quarter of a year before, but quarterly cash distribution had a 10.3% increase over 2Q14 and 2.4% over the first quarter.
Alliance Resource is trading with a P/E ratio of 5.73; during the last 12 months the price has dropped by 48%, trading now 54.06% below its 52-week high and 15.19% above its 52-week low.
Jim Simons (Trades, Portfolio) is the only guru who is a shareholder of the company with 0.69% of outstanding shares held.
Credicorp Ltd. (BAP),through its banking and nonbanking subsidiaries, provides financial and health services and products mainly throughout Peru and in certain other countries. The company operates in four segments – Banking, Insurance, Pension fund and Investment banking.
The company looks undervalued at the current price of $121.14. The DCF calculator gives a fair value of $249.41 with a current margin of safety of 55%, and the Peter Lynch earnings line gives a fair value of $158.5. It pays its shareholders an annual dividend yield of 1.94% with a payout ratio of 21%. The yield has a five-year growth rate of 6.40%.
During the last quarter net interest income margins widened from 52.73% to 56.89% compared to the same quarter of a year before and earnings were 238.31% year over year. The company’s earnings growth was 13.81% year over year, which was influenced by the year-on-year improvements in net interest income margins and the improvement in loan loss provisions.
Credicorp is trading with a P/E ratio of 10.78; during the last 12 months the price has dropped by 26%, trading now 33.80% below its 52-week high and 38.31% above its 52-week low.
Ken Fisher (Trades, Portfolio) is the company's leading shareholder among the gurus with 1.39% of outstanding shares followed by Jim Simons (Trades, Portfolio) with 0.30% and Frank Sands (Trades, Portfolio) with 0.12%.
International Business Machines Corp. (IBM) creates business value for clients and solves business problems through integrated solutions that leverage information technology and knowledge of business processes. Its solutions create value by reducing a client's operational costs or by enabling new capabilities that generate revenue.
The company looks undervalued at the current price of $149.37. The DCF calculator gives a fair value of $297.38 with a current margin of safety of 50%, and the Peter Lynch earnings line gives a fair value of $230.2. It pays its shareholders an annual dividend yield of 3.25% with a payout ratio of 31%. The yield has a five-year growth rate of 14.40%.
The company reported the last quarter with a 15% year-over-year decrease for diluted earnings from continuing operations which was significantly impacted by currency, an increase in workforce rebalancing charges and a year-earlier gain from the divestiture of the customer care outsourcing business. Also IBM had a 17% year-over-year decrease for net income from continuing operations.
IBM is trading with a P/E ratio of 13.13; during the last 12 months the price has dropped by 20%, trading now at 21.08% below its 52-week high and 6.45% above its 52-week low.
Warren Buffett (Trades, Portfolio) is the company's leading shareholder among the gurus with 8.12% of outstanding shares followed by Jeremy Grantham (Trades, Portfolio) with 0.28%, HOTCHKIS & WILEY with 0.17% and Brian Rogers (Trades, Portfolio) with 0.15% of outstanding shares.
Another high-yield company is Travelers Companies Inc. (TRV), which, through its subsidiaries, provides commercial and personal property and casualty insurance products and services to businesses, government units, associations and individuals. The company's business segments are Business and International Insurance, Bond and Specialty Insurance and Personal Insurance.
The company looks undervalued at the current price of $101.42. The DCF calculator gives a fair value of $205.69 with a current margin of safety of 51%, and the Peter Lynch earnings line gives a fair value of $160. It pays its shareholders an annual dividend yield of 2.29% with a payout ratio of 21%. The yield has a five-year growth rate of 11.80%.
For the last quarter investment income fell by 9% from the second quarter of 2014. Compared to the same period a year ago EPS rose by $0.58 and reached to $2.53, which was $0.41 more than what was estimated.
Travelers is trading with a P/E ratio of 9.34; during the last 12 months the price has risen by 7%, trading now 8.17% below its 52-week high and 11.70% above its 52-week low.
Pioneer Investments (Trades, Portfolio) is the company's top hedge fund with 0.33% of outstanding shares, followed by James Barrow (Trades, Portfolio) with 0.28% and Jim Simons (Trades, Portfolio) with 0.22%.
