| by Nilus Mattive
Tuesday, July 26, 2011 at 7:30am I've praised Warren Buffett in this space before, and for good reason — he has one of the most successful — and longest-running — investment track records in the world. Better yet, he always manages to keep a level head even when the markets are going haywire. In fact, he has almost always managed to use those times to make masterful moves that yield longer-term profits. And I would argue that his success is largely based on his ability to relentlessly focus on important fundamental measures of a business' worth ... regardless of what others are currently thinking. Of course, dividends are an area where Warren and I somewhat disagree ... or at least where our purposes dictate we differ. It's not that Buffett doesn't buy dividend-paying companies. In fact, many of his biggest holdings — stocks like Coca-Cola and Procter & Gamble — are among the elite stocks that I like to call "dividend superstars." [Editor's note: To hear Nilus talk about his favorite dividend superstars right now, just click here.] Of course, I tend to emphasize dividend payments far more than Buffett does. Three Triple-Your-Money Opportunities The window is about to slam shut on your chance to get the details on three hot profit opportunities that Tony Sagami uncovered on his recent trip to Malaysia that could triple your money in 12 months or less! If you want to jump on the profit potential right away, don't miss Tony's new video presentation. | Internal Sponsorship | That's why I recently combined some of Buffett's favorite fundamental measures with a couple of dividend metrics to come up with a short list of stocks worth investigating further. Here's what I came up with ... | NAME | SYMBOL | INDUSTRY | P/E | IND. YIELD | ROE | PROFIT MARGIN | | UNIVERSAL INSURANCE | UVE | Property & Casualty Ins. | 4.3 | 8.5 | 64.8 | 26.0 | | MESABI TRUST | MSB | Steel | 14.6 | 7.0 | 1341.6 | 97.4 | | TERRA NITROGEN | TNH | Fertilizers & Agricultural Chem. | 9.2 | 7.0 | 110.7 | 35.7 | | UNILENS VISION | UVIC | Health Care Supplies | 9.5 | 5.1 | 27.1 | 39.6 | | CHEROKEE | CHKE | Apparel | 18.5 | 4.7 | 66.8 | 42.0 | | LORILLARD | LO | Tobacco | 14.7 | 4.7 | 145.1 | 40.3 | | TECHNICAL COMMUNICATIONS | TCCO | Communications Equipment | 2.4 | 4.7 | 28.5 | 49.8 | | BRIDGE BANCORP | BDGE | Regional Banks | 14.3 | 4.4 | 16.1 | 25.2 | | EASTERN AMERICAN NAT. GAS | NGT | Oil & Gas Exploration & Prod. | 25.0 | 4.3 | 48.9 | 70.1 | | MICROCHIP TECHNOLOGY | MCHP | Semiconductors | 16.2 | 4.2 | 21.2 | 31.0 | | CTC MEDIA INC | CTCM | Broadcasting | 22.7 | 4.2 | 20.6 | 36.1 | | MERCHANTS BANCSHARES | MBVT | Regional Banks | 11.0 | 4.2 | 15.4 | 28.0 | | PAYCHEX | PAYX | Data Processing | 21.2 | 4.1 | 35.4 | 38.0 | | ARROW FINANCIAL | AROW | Regional Banks | 12.5 | 4.1 | 15.3 | 30.4 | | INTEL | INTC | Semiconductors | 10.2 | 3.7 | 16.1 | 36.8 | | JOHNSON & JOHNSON | JNJ | Pharmaceuticals | 13.6 | 3.3 | 24.3 | 27.5 | | SOUTHSIDE BANCSHARES | SBSI | Regional Banks | 9.6 | 3.3 | 18.4 | 28.7 | | WESTAMERICA | WABC | Regional Banks | 15.6 | 3.0 | 21.1 | 46.5 | | S.Y. BANCORP | SYBT | Regional Banks | 13.9 | 3.0 | 15.5 | 26.7 | | AXIS CAPITAL HOLDINGS | AXS | Property & Casualty Ins. | 5.2 | 2.9 | 16.9 | 25.2 | | STRAYER EDUCATION | STRA | Education Services | 14.0 | 2.9 | 48.4 | 34.1 | | U.S. GLOBAL INVESTORS | GROW | Asset Management | 17.8 | 2.8 | 32.3 | 24.3 | | AUTOMATIC DATA PROCESSING | ADP | Data Processing | 21.0 | 2.7 | 27.3 | 20.9 | | ERIE INDEMNITY | ERIE | Property & Casualty Insurance | 26.3 | 2.7 | 25.8 | 20.4 | | ANALOG DEVICES | ADI | Semiconductors | 11.8 | 2.7 | 17.9 | 32.7 | | MOCON | MOCO | Electronic Equipment | 18.7 | 2.3 | 15.5 | 20.5 | | MICROSOFT | MSFT | Systems Software | 10.2 | 2.3 | 40.5 | 40.0 | | CKX LANDS | CKX | Real Estate Operating Co. | 29.0 | 2.1 | 18.2 | 77.8 | | T. ROWE PRICE | TROW | Asset Management | 18.2 | 2.1 | 21.2 | 45.1 | | RLI | RLI | Property & Casualty Ins. | 10.3 | 1.9 | 16.0 | 30.6 | | BUCKLE | BKE | Apparel Retail | 14.9 | 1.7 | 29.9 | 22.6 | | CASS INFORMATION SYS. | CASS | Data Processing | 16.4 | 1.7 | 17.2 | 29.0 | | OCCIDENTAL PETROLEUM. | OXY | Integrated Oil & Gas | 12.8 | 1.7 | 20.5 | 39.7 | | CBOE HOLDINGS | CBOE | Specialized Finance | 20.4 | 1.7 | 42.5 | 37.7 | | COMPUTER SERVICES | CSVI | Data Processing | 18.5 | 1.6 | 23.9 | 24.2 | | TEXAS INSTRUMENTS | TXN | Semiconductors | 13.5 | 1.6 | 22.9 | 32.6 | Now, a Brief Explanation of What Particular
Measures I Used to Find These Companies ... I started with four of the same criteria that classic value investors like Benjamin Graham — and his more famous student Warren Buffett — have favored, including: #1. A healthy return on equity: In plain English, return on equity (ROE) is net income divided by shareholder's equity. It tells you how much profit a company can generate from what shareholders have invested. I opted for a five-year average ROE of 15 percent or better. #2. Solid profit margins: This is a company's net income divided by net sales. It's a great way to determine how strong a company's pricing power is, and how well it's controlling costs. I screened for profit margins in excess of 20 percent. #3. Low debt: As the name implies, a company's debt-to-equity ratio tells you how much long-term debt it has. The higher the percentage, the more debt. That's why I looked for stocks that had a total debt to total equity ratio under 20 percent. A few of the companies actually had ratios of zero, indicating no long-term debt at all! #4. Plus, favorable valuations: There's no point in getting a solid company at too high of a price. While there are lots of ways to gauge a stock's valuation, the simplest method is using price-to-earnings ratios. Any company with a P/E over 30 was automatically ruled out in my search. $14+ Trillion in Debt and a 9%+ Unemployment Rate It doesn't look good for the U.S. right now. We have a lot of work to do to get this country back on track. It could take 5 years...10 years...maybe more... And I don't know many investors who can wait 10 years for their U.S. investments to get back on the winning path. I know I can't. And that's why I've created the U.S. Debt Protection Fund. I'm Ian Wyatt of Wyatt Investment Research. My simple and easy to implement U.S. Debt Protection Fund will quickly and effectively protect your wealth as the dollar loses more and more of its value. | External Sponsorship | Then, I limited the results to companies that currently pay dividends worth at least 1.5 percent annually. Any company with a payout ratio above 70 percent was automatically eliminated ... which ensured that the dividend was at least somewhat sustainable going forward. Obviously, I'm not saying Buffett himself is considering investing in any of these companies. But I do think there are plenty of interesting opportunities to be found in this list ... and I encourage you to do a little more digging on your own! Best wishes, Nilus P.S. After some more investigating of my own, I did just recommend one of the companies above to my Income Superstars subscribers. If you'd like to learn which stock it was — and get the details on 16 more dividend superstars that I like right now — just click here to watch my latest presentation. | 
