Venture Beyond S&P Dividend Aristocrats?

"Too often we enjoy the comfort of opinion without the discomfort of thought." John F Kennedy. S&P Dividend aristocrats are definitely worth buying for those who, I say, enjoy the comfort of opinion. However, that wouldn't maximize the total returns on your stocks. If you want to restrict yourself to the Dividend Aristocrats, then the top 10 stocks with highest dividend yields are AT&T, Altria Group, Verizon, American Electric Power, Bristol-Myers Squibb, Exelon, Southern, Merck, Entergy, and Pfizer. If you wish to venture beyond S&P Dividend Aristocrats, then you may consider the stocks given below. Ellington Financial LLC (NYSE:EFC) For the fourth quarter of 2010, the company declared a dividend per share of $1.31, compared to $0.8in the third quarter of 2010. If we annualize Q4-2010 dividend and assume that in 2011 the company would maintain its dividend policy then EFC would be among the top three companies with highest dividend yield of 22.2%. When you are considering investing in dividend stocks, Price to Dividend (P/D) is one of the key metrics to base your decision. The P/D ratio for a company should be in the bottom 20% of the overall market (that is the yield should be in the top 20%). EFC's P/D of 4.42 meets the bottom 20% criterion (below 20.66 or yield above 3.7%), and it is therefore attractive. Invesco Mortgage Capital Inc (NYSE:IVR) Recently, the company declared a dividend of $1 per share for the first quarter of 2011, unchanged over the dividend for Q4-2010. Annualized dividend comes to $4 in 2011, which as on date amounts a dividend yield of 17.2%. IVR's P/D of 6.30 meets the bottom 20% criterion (below 20.66 or yield above 3.7%), and it is therefore attractive. Hatteras Financial Corp. (NYSE:HTS) Recently, the company declared a dividend of $1 per share for the first quarter of 2011, compared to $0.97 for Q4-2010. Annualized dividend comes to $4 in 2011, which as on date amounts a dividend yield of 13.5%. HTS' P/D of 7.38 meets the bottom 20% criterion (below 20.66 or yield above 3.7%), and it is therefore attractive. Dynex Capital, Inc. (NYSE:DX) Recently, the company declared a dividend of $0.27 per share for the first quarter of 2011, compared to $0.27 for Q4-2010 ($0.25 for Q3-2010). Annualized dividend comes to $1.08 in 2011, which as on date amounts a dividend yield of 10.2%. DX's P/D of 9.63 meets the bottom 20% criterion (below 20.66 or yield above 3.7%), and it is therefore attractive. Fifth Street Finance Corp. (NYSE:FSC) Towards the end of January 2011, the company declared monthly dividends for the second and third fiscal quarters of 2011 as follows: 0.1066 per share, payable on February 28, 2011 to stockholders of record on February 1, 2011; $0.1066 per share, payable on March 31, 2011 to stockholders of record on March 1, 2011; $0.1066 per share, payable on April 29, 2011 to stockholders of record on April 1, 2011; $0.1066 per share, payable on May 31, 2011 to stockholders of record on May 2, 2011; and $0.1066 per share, payable on June 30, 2011 to stockholders of record on June 1, 2011. Annualized dividend comes to $1.28 in 2011, which as on date amounts a dividend yield of 9.3%. FSC's P/D of 10.08 meets the bottom 20% criterion (below 20.66 or yield above 3.7%), and it is therefore attractive.... Read more