Terra Nitrogen Company, L.P. (TNH), Wynn Resorts, Limited (WYNN): Three Stocks that Screen for Profits in 2013

Insuring your profits

Erie, the personal and commercial property and casualty insurance broker for the Erie Insurance Exchange, was familiar to me because the ace mechanic who keeps all the Kraftmobiles running said Erie Insurance is the only company he uses to insure all the cars he owns and refurbishes. The stock is barely 5% off its 52 week high of $78.75.

This mid-cap (market cap $3.5 billion) has a low beta of .70 and a P/E of 25.00, lower than the industry average of 26.80. EPS for 2012 came in at $2.99, but analysts expect that to rise to $3.55 for 2014.

Erie is this close to being a Dividend Aristocrat, having increased its payout for 22 consecutive years. The five year dividend growth rate is 17.70%. The yield stands at 3.2% with a 161.00% payout ratio, and the company has no debt and $53.25 in cash per share.

While it’s lightly covered and traded, analysts expect a 10.00% five year EPS growth rate in line with its industry. The company reported Q4 earnings on Feb. 26 in which earnings for the quarter increased from $0.49 to $0.54 from the year ago period, but the gross margin contracted from 13% to 12.2%.

This is not a momentum name, but the dividends are steady and predictable. Erie was named a J.D. Power and Associates 2012 Customer Service Champion, and named to Ward Group’s 2012 national list of Top 50 Performing Property/Casualty insurers for financial stability, consistency and performance.  Going forward expect this company to increase the yield and slowly grow the business.

There’s gold in them thar screeners!

These three companies have solid yields and solid businesses with bright outlooks ahead. Whether it’s increased fertilizer demand, Macau gambling on the upswing, or simply a good business that keeps getting better through word of mouth, each has catalysts going forward.

The article Three Stocks that Screen for Profits in 2013 originally appeared on Fool.com and is written by AnnaLisa Kraft.

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