14 Services Stocks With Strongest Earnings Growth And Best Dividends

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Feb 12, 2012
The Best Yielding Service Stocks With Highest Expected Growth Researched by Dividend Yield - Stock, Capital, Investment. The service sector is, after agriculture and industrials, the tertiary production level of an industrialized economy. The sector has a total market capitalization of USD 34.86 trillion and includes 907 companies. The average stock from the sector pays 1.58 percent in dividends and is currently valuated with a P/E ratio of 20.64.


I screened the sector by stocks with the highest earnings per share growth for the upcoming five years (at least 15 percent yearly). In addition, the company should pay today more than 2 percent in cash dividends and the market capitalization should above USD 300 million in order to exclude the risks of low capitalized companies. 14 stocks fulfilled my criteria of which two are high yields; one stock has a double-digit yield. Thirteen stocks have a buy or better recommendation.


Here are my favorite stocks:


1. The Washington Post (WPO, Financial) has a market capitalization of $3.00 billion. The company employs 20,000 people, generates revenues of $4,723.57 million and has a net income of $306.82 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $821.81 million. Because of these figures, the EBITDA margin is 17.40 percent (operating margin 11.58 percent and the net profit margin finally 6.50 percent).


The total debt representing 7.75 percent of the company’s assets and the total debt in relation to the equity amounts to 14.14 percent. Due to the financial situation, a return on equity of 10.57 percent was realized. Twelve trailing months earnings per share reached a value of $16.70. Last fiscal year, the company paid $9.00 in form of dividends to shareholders.


Here are the price ratios of the company: The P/E ratio is 23.29, Price/Sales 0.64 and Price/Book ratio 1.13. Dividend Yield: 2.52 percent. The beta ratio is 0.95.


2. Limited Brands (LTD) has a market capitalization of $13.32 billion. The company employs 17,500 people, generates revenues of $9,613.00 million and has a net income of $805.00 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1,678.00 million. Because of these figures, the EBITDA margin is 17.46 percent (operating margin 13.36 percent and the net profit margin finally 8.37 percent).


The total debt representing 38.86 percent of the company’s assets and the total debt in relation to the equity amounts to 169.85 percent. Due to the financial situation, a return on equity of 44.00 percent was realized. Twelve trailing months earnings per share reached a value of $2.90. Last fiscal year, the company paid $0.60 in form of dividends to shareholders.


Here are the price ratios of the company: The P/E ratio is 15.49, Price/Sales 1.39 and Price/Book ratio 9.78. Dividend Yield: 2.22 percent. The beta ratio is 1.52.


3. Union Pacific Corporation (UNP) has a market capitalization of $53.59 billion. The company employs 44,861 people, generates revenues of $19,557.00 million and has a net income of $3,292.00 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $7,336.00 million. Because of these figures, the EBITDA margin is 37.51 percent (operating margin 29.24 percent and the net profit margin finally 16.83 percent).


The total debt representing 19.75 percent of the company’s assets and the total debt in relation to the equity amounts to 47.94 percent. Due to the financial situation, a return on equity of 18.12 percent was realized. Twelve trailing months earnings per share reached a value of $6.73. Last fiscal year, the company paid $1.93 in form of dividends to shareholders.


Here are the price ratios of the company: The P/E ratio is 16.59, Price/Sales 2.74 and Price/Book ratio 2.88. Dividend Yield: 2.15 percent. The beta ratio is 1.22.


Take a closer look at the full table of the best dividend service stocks with highest expected earnings growth. The average price to earnings ratio (P/E ratio) amounts to 20.07 and forward P/E ratio is 17.91. The dividend yield has a value of 2.74 percent. Price to book ratio is 5.38 and price to sales ratio 1.23. The operating margin amounts to 18.89 percent.


Related stock ticker symbols:

TEU, NM, SSW, CVC, WSO, HOTT, HCSG, TWC, NSC, WPO, ASCA, IPG, LTD, UNP


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