By: Tomas Ronolski - AllPennyStocks.com News

Friday, March 8, 2013

Many investors look only to stocks that historically pay dividends to fatten their portfolio. The strategies to pick a company are about as broad as there are listed public companies. In the penny stock world, or those companies that trade for under five dollars per share, the choices are far less, but they still exist and sometimes can be shown to pay a decent percentage of profits back to shareholders. Take Toronto-based General Donlee Canada Inc. (TSX:GDI) for example. On Friday, the company reported its financial results from the fourth quarter and full year ended December 31, 2012. The precision-machine parts manufacturer reported strong revenue growth for the latest quarter and all of 2012, including ending the year with a record order backlog of $65 million. Adjusted profits, however slipped on both a quarterly and yearly basis, but the company still declared a dividend of 8.25 cents per share for the quarter.

On January 15, 2013, the company also paid a dividend of 8.25 cents per share.

For the quarter, revenue increased to $13.6 million, up 15 percent from the $11.8 million recorded in the year prior quarter. Net profits (which are calculated before other gains, losses and income taxes) for the quarter were $1.2 million, down from $1.6 million in Q4 2011. Adjusted earnings were about $800,000, or 7.4 cents per share, for the quarter, compared to $1.7 million, or 15.9 cents per share in the year earlier quarter. No particular reasons were citing for the greater expenses or charges in the recent quarter in today’s corporate statement and the full corporate filing was not yet posted on the company’s website or with Sedar at the time of this writing.

For the full year 2012, General Donlee reported $54.5 million in sales, up 11 percent from $48.9 million for 2011. A 14 percent increase in sales from the company’s aerospace and power generation productions to $34.1 million was responsible for the largest portion of the growth. Sales in the specialty precision products arms grew to $20.4 million, a 7 percent increase over 2011 sales.

Net income was $6.2 million versus $5.1 million in the year earlier. Adjusted income was $4.2 million, or 39.4 cents per share, down from $4.6 million, or 43.3 cents per share, in 2011.

For the year, General Donlee returned 33 cents per share in dividends to shareholders.

"General Donlee's 15% increase in sales in the fourth quarter and 11% increase in sales year-to-date over the comparable periods last year continue to reflect strong fundamentals in the industries we serve and our ability to grow our business with current and new customers,” said Garen Mikirditsian, chief executive at General Donlee. Mikirditsian also noted that the company paid out about $880,000 in dividends to shareholders in the fourth quarter.

Looking forward, the company foresees demand throughout the year for its products and services, especially in the aerospace sector as well as the nuclear sector. Further, the company said that it has inked a new, long-term contract with a major European aircraft engine manufacturer.

Shares of GDI are typically traded on light volume as only 10.6 million shares are outstanding. Increases in volume can send prices moving quickly as happened late in February when 70,000 shares trading in a day moved the stock from $4.40 to $4.90, representing a new 52-week high. The stock price is also currently sitting near an all-time high of $5.01, which was set in April 2007.

About halfway through the trading day, 14,300 shares have been traded with the stock price up 1.5 percent at $4.72. Across the past 52 weeks, shares are ahead by 31 percent.

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