NEW YORK (TheStreet) -- One of my favorite trading strategies is to buy a high-yield dividend stock that's in an overall bull trend when it experiences a pullback. Here are three examples.
These companies have reliable dividends, are in a bull trend and are dipping in price. They also have other qualities that warrant your consideration.
Simulations Plus (SLP), which makes software used in drug research, has a market cap of $102 million and is thinly traded with fewer than 100,000 shares a day.
Price To Book: 6.8
Forward Estimated Earnings Payout Percentage: 80%
The company offers exposure in the pharmaceutical sector without much volatility. Its software simulates compound interaction within the human body. One intriguing example used by CEO Walter Woitosz during an earnings conference call on Thursday was testing on babies. Because of the rapid maturing of babies during the first years of life, it's a greater challenge to perform clinical trials. Simulations Plus' software helps reduce the number of variables to consider.
The software is proven in the field. The Food and Drug Administration's Center for Food Safety and Applied Nutrition, FDA Office of Testing and Research, MHRA (U.K.'s equivalent of the FDA) and the top 20 pharmaceutical companies are clients.
The company is debt free, has $10.9 million in cash and most of its income is distributed as dividends. The gross margin is 84%, and net margin is over 27%. Sales and the number of customers are growing.
A software product called MembranePlus, which is close to release, is expected to boost the company's earnings and revenue. International sales are expanding, especially in the U.K., India, China and Japan.
Woitosz isn't the most dynamic conference call speaker you're likely to listen to, but he does come off as honest and sincere, attributes Wall Street could use more of. I posted exact buy price levels, profit target and a stop loss limit on Real Money Pro Thursday while buying shares for myself.