5 Stocks on a Roll

Finding the next big stock is both satisfying and profitable. It's also a great way to skip worrying about everything in the news such as the market down 10% over the past three months, a double dip in the economy, Europe's debt crisis, China's slowing economy, the BP spill, etc. One way to find the next big stock is to uncover businesses with improving sentiment among investors.

With that in mind, you can use our Motley Fool CAPS screening tool to find stocks on a roll -- those with growing bullish sentiment in the CAPS community. Specifically, I looked for stocks whose CAPS ratings have risen in the past two months to five stars (out of five). Here are five that I found that fit the above criteria:

All the stocks in the screen have one thing in common:

They return cash to investors.

Oil and gas pipelines
Magellan Midstream Partners and Oneok Partners are gas distribution master limited partnerships, so with their dividend payouts (called distributions), they offer tax advantages that allow you to keep even more of what you earn than with regular stocks. Magellan pays $2.88 annually for a yield of 6%, and Oneok Partners recently raised its distribution to $1.12 per quarter for a yield of 6.5%.

CAPS All-Star Brow0905 points out what's great about dividends when he had this to say about ONEOK Partners:

A) the dividend, how's 7 % for doing nothing? You like that? Oh you do? Good...B) Natural Gas is way cheap right now and we are well positioned to export this necessary commodity to the rest of the world.

Drug manufacturers
Novartis is a giant with more than 50 drugs on the market; it is best known for Ritalin and Lamisil, among many others. Gilead Sciences is about one-fourth the size of Novartis; its market cap is only $31 billion. The company has 12 products on the market and is best known for its HIV drugs Atripla and Truvada, and for Tamiflu, which became a household name during the avian flu epidemic. Both of these companies use their stable of drugs to generate huge cash flows, which they then return to investors in the form of dividends or stock buybacks. Novartis' dividend is $1.65 for a yield of 3.3%. In January, Gilead announced a $1 billion share buyback for 2010, which it completed by May at an average price of $41.43 for 24.1 million shares. It then announced a $5 billion share repurchase to be finished by 2013. That's almost 15% of the current shares outstanding.

Large drug manufacturers excite CAPS All-Star and blogger extraordinaire TMFDeej; here is an excerpt from one of his recent pitches:

I have been [singing] the virtues of Big Pharma here in CAPS for a while now, as much to my chagrin the companies in the sector continue to get cheaper.

This sector has become just too cheap to ignore. As an added bonus, most of Big Pharma companies pay excellent dividends, which I love.

Activision
Video game companies used to be thought of as recession-proof, but recent history showed this notion was wrong. Activision Blizzard has a cash cow in World of Warcraft, its multiplayer online role-playing game. Later this month, the company will release a new version of Starcraft, a game originally released in 1998 that is still so popular that it's played in tournaments in malls in China. Management believes that Starcraft can deliver anywhere from $500 million to $1 billion in operating profit over its lifespan. And although tech companies are not known for their dividends, Activision Blizzard paid its first annual dividend of $0.15 in Q1 2010 for a yield of 1.3%.

Fool analyst Jim Mueller recently asked "Buy, Sell, or Hold Activision Blizzard?" and concluded we should buy, based on the company's ability to create successful franchises and on its low price.

Is this a good time to hop on the oil and gas bandwagon, or do other companies such as the drug manufacturers or Activision Blizzard catch your eye? Let us know in the comments box below.