10 Quality Dividend Stocks to Consider

It was a great week for the market as the S&P 500 continued to move up toward the 1,350 mark and closed the week up 2.2%. The Dow didn't fair so well but nevertheless closed the week up 1.6% and is looking to test the 12,800 high. Our watch list contains 39 companies within 11% of their respective 52-week lows. The remaining 29 stocks can be found here. July 22, 2011 Watch List Symbol Name Price % to Low P/E EPS Div. Yield Payout Ratio MDP Meredith Corp. 29.36 -0.05% 10.30 2.85 1.02 3.47% 36% ANAT American Nat'l Insurance 76.58 0.37% 12.96 5.91 3.08 4.02% 52% WABC Westamerica BanCorp. 48.57 0.39% ... more

6 Stocks Seeing Rapid Growth in Dividends and Free Cash Flows

Cash flow analysis is very important when considering a stock for its dividends. Because free cash flow is the first and most sustainable source for dividend payments, healthy cash flows indicate that a company’s dividend is more sustainable. We ran a screen with this idea in mind, searching for dividend stocks that have seen fast growth in free operating cash flows over the last five years (measured with compound annual growth rate). We then screened for stocks seeing high growth in their dividend, comparing the current year dividend per share estimate to the trailing-twelve-month dividend per share.Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.Your... more

5 Year Dividend Growth Performance of Warren Buffett's Top 9 Holdings

Many investors have been craving higher yielding investments lately. The interest rate most banks now offer for cash and CDs is nearly nothing, and getting lower all the time. Worse yet, U.S. debt is facing downgrade fears. As a result, many investors are avoiding the bond markets and the potential depreciation there, and looking for stable large-cap equities that can fill the fixed income portion of their portfolio. There are literally thousands of dividend paying equities and funds (of the mutual, closed-end and exchange traded varietals). Still, another prudent idea may be to consider the investment decisions made by someone or a few of the more respected investors within the market. For example, Warren Buffett is considered one of the best long-term investors out there and presently... more

Historic and Current Yield Comparisons for 4 Large Energy Utilities

Investors seeking higher yielding income equities often consider or hold energy utilities. These companies are known for having stable, growing markets. They are highly regulated, and the income streams in and out of these utilities are usually consistent and transparent. This is a review of the historic, year-end yield levels for four of the largest energy utilities within the S&P 500.Yield can go down even where the dividend increases. This happens in situations where the shares (equity) appreciate at a faster rate than the dividend grows. Therefore, while dividend growth is a function of the business and its management's decisions, yield per share is also a function of the market pricing of the company, its assets, and its dividend's relative payout rate/growth. Click on each chart to... more

Historic and Current Yield Comparisons for 4 Additional Large Energy Utilities

Investors seeking higher yielding income equities often consider or hold energy utilities. These companies are known for having stable, growing markets. They are highly regulated, and the income streams in and out of these utilities are usually consistent and transparent. This is Part II of a review of the historic, year-end yield levels for a number of the largest energy utilities within the S&P 500. You can find Part I here. Yield can go down even where the dividend increases. This happens in situations where the shares (equity) appreciate at a faster rate than the dividend grows. Therefore, while dividend growth is a function of the business and its management's decisions, yield per share is also a function of the market pricing of the company, its assets, and its dividend's relative... more

Key Metrics for Determining Which Companies Are Likely to Increase Dividends

Shareholders of J.M. Smucker Co. (SJM) received a very early Christmas present last week as the company announced it was raising its dividend for the second time this year. The jelly and jam maker is joining a long list of other companies in an effort to disburse more cash to shareholders. By the time you are reading this, Smucker shares will already reflect the increased dividend, so the question is, “Who else will be increasing their dividend soon?” The short answer is lots. Barclays Capital’s Jeffrey Meli told Bloomberg last week that corporations are facing ‘ripe’ conditions to increase dividends and buy back stock after hoarding cash over the last few years. Once macroeconomic stability returns, companies will need to invest or spend some of the historic $1.9 trillion... more

3 Rallying, High Dividend Yield Stocks With Strong Sources of Profitability

If you are considering high dividend yield stocks as a source of income, be sure to check the company’s profitability as an indication of whether it can continue paying its high yield in the future – after all, dividends are not a guarantee of future payments. One way to check a company’s profitability is with DuPont analysis of return on equity (ROE). ROE can be broken up into three components such that increases in ROE can be attributed to those components.ROE= (Net Profit/Equity) = (Net profit/Sales)*(Sales/Assets)*(Assets/Equity) = (Net Profit margin)*(Asset turnover)*(Leverage ratio)Analyzing the sources of returns for a company, we can focus on companies with the following characteristics: Increasing ROE along with, Decreasing leverage, i.e. decreasing Asset/Equity ratio ... more

Defending Your Dividend Stocks With Covered Calls

With the recent choppy market action, you may be wondering how best to protect your gains, without abandoning your income-producing, dividend paying stocks. Selling covered calls offers you another income stream from your stocks, in the form of option premiums. This week we'll walk through covered call trades for three dividend stocks from our High Dividend Stocks By Sector Tables. Two of these stocks, Abbot Labs (ABT) and Procter & Gamble (PG), are Dividend Aristocrats: Financials: Covered Calls (Expiring Jan. 21, 2012): (We'll use a one contract sale in our examples, for simplicity's sake. Each call options contract corresponds to 100 shares of the underlying stock.) ABT covered call trade: 1. Buy 100 shares of ABT at $52.40. 2. ABT closed at $52.40, and you'd "sell to open" a Jan.... more

3 Dividend Paying Stocks That Are 30% Off 52 Week Highs

A sharp drop in the price of a company's stock does not necessarily mean it is time to take the plunge. However, it could be a good time to do further due diligence to determine if there is long-term value in the company. Especially intriguing are when these price drops create unique dividend opportunities.Hooker Furniture Corporation (HOFT) is an importer of residential wood and metal furniture as well as a manufacturer and importer of upholstered furniture. The company's products are sold through various retail outlets including department stores, independent furniture stores, specialty retailers, catalog retailers as well as national and regional chains.Hooker currently pays a quarterly dividend of $0.10 per share or $0.40 on an annualized basis which equates to a yield of 4.3%. The... more

Communication Services Stocks: Plenty of Dividends, Limited Price Appreciation Potential

Communication Service companies tend to provide very good dividend yields. Among the approximately 100 industries used by Edgar Online to classify companies, the Communication Services industry ranked fourth with a market-cap weighted average dividend yield of 4.0%. In comparison, the SPDR S&P 500 Trust ETF (SPY) provides a current dividend yield of 1.84%. However, investors in these companies might be disappointed by the price appreciation of these stocks. This article will look at stocks which were selected because they had high dividend yields and market capitalizations greater than $1 billion. Some stocks were excluded due to limited history or questionable data. The dividend yields were from Zacks.com and reflect their calculation methodology which does not use a trailing twelve... more