The Market's Hottest Dividend Sector Gets More Great News

For a company, it's gotta be hard to do well when other companies are faltering. But that's exactly what the players in the high-yielding mortgage REIT sector do: kick butt when other companies feel the hurt. And there's more good news for these mREITs -- unemployment is up. Late last week, it was reported that unemployment climbed to 9.2%. The number of net new jobs came to just 18,000 for the month, well below even the most dour analyst predictions. It was the weakest hiring report since May 2010. The poor showing throws into doubt analysts' claims about a second-half recovery, but it's nevertheless good news for mortgage REITs, which thrive in tough conditions like these. With unemployment so high, the Federal Reserve cannot credibly raise interest rates, keeping the cost of funding... more

PNC: Dividend Dynamo or Blowup?

Let's examine how PNC (NYSE: PNC) stacks up in four critical areas to determine whether it's a dividend dynamo or a disaster in the making. 1. YieldFirst and foremost, dividend investors like a large forward yield. But if a yield gets too high, it may reflect investors' doubts about the payout's sustainability. If investors had confidence in the stock, they'd be buying it, driving up the share price and shrinking the yield.... more

SUPERVALU: Dividend Dynamo or Blowup?

Let's examine how SUPERVALU (NYSE: SVU) stacks up in four critical areas to determine whether it's a dividend dynamo or a disaster in the making. 1. YieldFirst and foremost, dividend investors like a large forward yield. But if a yield gets too high, it may reflect investors' doubts about the payout's sustainability. If investors had confidence in the stock, they'd be buying it, driving up the share price and shrinking the yield.... more

Whirlpool: Dividend Dynamo or Blowup?

Let's examine how Whirlpool (NYSE: WHR) stacks up in four critical areas to determine whether it's a dividend dynamo or a disaster in the making. 1. YieldFirst and foremost, dividend investors like a large forward yield. But if a yield gets too high, it may reflect investors' doubts about the payout's sustainability. If investors had confidence in the stock, they'd be buying it, driving up the share price and shrinking the yield.... more

The Most Promising Dividends in Brewers

Yields and growth rates and payout ratios, oh my!Before we get to those companies, though, you should understand just why you'd want to own dividend payers. These stocks can contribute a huge chunk of growth to your portfolio in good times, and bolster it during market downturns. As my colleague Matt Koppenheffer has noted: "Between 2000 and 2009, the average dividend-adjusted return on stocks with market caps above $5 billion and a trailing yield of 2.5% or better was a whopping 114%. Compare that to a 19% drop for the S&P 500."... more

2 Tobacco Dividends to Buy and 1 to Avoid

U.S. lawmakers are making it increasingly difficult for tobacco companies to sell their products. Numerous states have raised their tobacco tax rate over the past decade, while the FDA recently released a ruling requiring tobacco companies to affix large warning labels to their packages and advertisements by October 2012. In sum, the going has been tough for tobacco companies in the U.S., and it's likely to get tougher. Thus it makes sense to look past the dividend paid by most tobacco companies and dig deeper to see whether you have a payout you can trust for the long term, or a high-yield smoke-and-mirrors candidate. While the tobacco sector doesn't offer a vast selection of choices, there are two clear-cut dividend standouts and one company that could burn you if you aren't careful.... more

Abbott Laboratories: Dividend Dynamo or Blowup?

Dividend investing is a tried-and-true strategy for generating strong, steady returns in economies both good and bad. But as corporate America's slew of dividend cuts and suspensions over the past few years has demonstrated, it's not enough simply to buy a high yield. You also need to make sure those payouts are sustainable. Let's examine how Abbott Laboratories (NYSE: ABT) stacks up in four critical areas to determine whether it's a dividend dynamo or a disaster in the making. 1. Yield First and foremost, dividend investors like a large forward yield. But if a yield gets too high, it may reflect investors' doubts about the payout's sustainability. If investors had confidence in the stock, they'd be buying it, driving up the share price and shrinking... more

Dividend Superstars for Your Portfolios

Long term growth records appeal to value investors. Below is an elite group of companies (and their yields) with track records of increasing annual dividends for half a century, the Superstar Dividend Aristocrats. OK, I bent the rules for JNJ and KO. They will achieve this status next year, just 6 months away. But I trust that they will increase dividends next year. 1) Johnson & Johnson (JNJ)__3.4% 2) Coca-Cola (KO)_________2.7% 3) 3M Company (MMM)_____2.3% 4) Emerson Electric (EMR)__2.4% 5) Parker-Hannifin (PH)____1.7% 6) Procter & Gamble (PG)__3.2% 7) Genuine Parts (GPC)___3.1% 8) Dover Corp. (DOV)_____1.6% In the last century, financial studies said that 1/3 of investment gains came from dividends and 2/3 came from capital appreciation. That belief has been put to the test in the... more

An 18% Dividend Yield I Don't Want to Earn

5 stocks hedge funds are selling This table contains five among the top 20 stocks in the Russell 1000 that have suffered the largest absolute declines in hedge fund ownership since the end of March: Company Hedge Fund Ownership: Latest vs. March 31 Forward Price-to-Earnings multiple* Alpha Natural Resources (NYSE: ANR) 9.6% / 18% 9.0 American Capital Agency (Nasdaq: AGNC) 6.8% / 9.4% 1.2[Price-to-book value] CIENA (Nasdaq: CIEN) 13.8% / 17.8% 50.2 Novellus Systems (Nasdaq: NVLS) 3.8% / 7.3% 10.8 Family Dollar 15.9% / 24.6% 15.8 Source: Capital IQ a division of Standard & Poor's. *As of July 7, based on next 12 months' forward earnings estimates. An old classic: Borrow... more

My Top-10 Must-Own Dividend Stocks

I have a fairly focused stock portfolio. On a regular basis, I review my holdings to sell, buy, add additional shares, or do nothing. My portfolio is based upon dividends. Thus I typically have incoming money to add to the portfolio. Here are the top-10 dividend stocks I currently own, in order of preference. 1. American Capital Agency Corp. (AGNC) American Capital Agency continues to outperform the S&P 500. Since 2008, AGNC has returned a total annualized rate-of-return of 27.5%. When compared to the S&P 500 return of .4% over the same time period, the differences are accentuated and crystal clear. AGNC's business model is to borrow Treasury Bills at low yield rates, and invest the proceeds in higher yield paying agency-mortgage obligations. Government Sponsored Entities... more