FirstEnergy: Dividend Dynamo or Blowup?

Let's examine how FirstEnergy (NYSE: FE) 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

10 Stocks Using Real Cash To Pay Higher Dividends

You can't spend earnings! At first glance, this seems like an odd statement, possibly even incorrect. However, it is not only correct, but an important axiom for all types of investors. Through fraud and manipulation financial statements can be made to look quite impressive, but the cash that arrives in your brokerage account is real. An increasing cash dividend keeps pressure on management to ensure the company is well run. If there are too many missteps, eventually the dividend will slip. Here are several stocks where management recently met the challenge by raising their cash dividends: Medtronic, Inc. (MDT) manufactures and sells device-based medical therapies worldwide. June 23rd the company increased its quarterly dividend 8% to $0.2425 per share. Medtronic's dividend has more... more

A Top 10 Dividend Growth List

Most yield oriented investors maintain some sort of watch list for possible purchase candidates to add to their portfolio. I maintain one but also screen larger databases in search of new ideas or perhaps a security I missed. I decided to run a screen searching for top dividend growers. I screened by using the following criteria: Current yield in excess of 2.5%. Payout ratio less than 60%. Five year dividend growth rate over 10%. Excluding utilities, MLP's, REIT's, and foreign securities. The securities that survived the screen were: Abbott Labs (ABT) Automatic Data (ADP) Colgate-Palmolive (CL) Clorox (CLX) Flowers Foods (FLO) General Dynamics (GD) McDonald's (MCD) Northrop Grumman (NOC) Pepsico (PEP) Procter & Gamble (PG) Target (TGT) Wal-Mart (WMT) I was... more

10 Stocks Using Cash to Pay Higher Dividends

You can’t spend earnings! At first glance, this seems like an odd statement, possibly even incorrect. However, it is not only correct, but an important axiom for all types of investors. Through fraud and manipulation financial statements can be made to look quite impressive, but the cash that arrives in your brokerage account is real. An increasing cash dividend keeps pressure on management to ensure the company is well run. If there are too many missteps, eventually the dividend will slip. Here are several stocks where management recently met the challenge by raising their cash dividends:Medtronic, Inc. (MDT) manufactures and sells device-based medical therapies worldwide. June 23rd the company increased its quarterly dividend 8% to $0.2425 per share. Medtronic's dividend has more than... more

4 Stocks Still Increasing Dividends After 50 Years

A lot can happen in 50 years. Cultures shift, celebrities die, wars are fought. But through it all, a select group of companies have continued their policies of yearly dividend increases uninterrupted. These elite companies remain steadfast in their devotion to dividends, providing their lucky shareholders with an ever-increasing source of income. Past performance is no guarantee of future success, but with companies like these, it's as close to a guarantee as you can get. Diebold Incorporated (DBD) Years of Dividend Growth - 58 Current Quarterly Dividend Rate - $0.28 10 Year Average Dividend Growth - 5.99% Current Price - $30.61 Current Yield - 3.66% Diebold Incorporated is engaged in providing integrated self-service delivery and security systems and services to the financial,... more

Top 10 Stocks Based on Yield and Payout Ratio

I write extensively on the U.S. Dividend Champion list maintained and updated by DRIP Investing. The list is comprised of stocks that have increased their dividend payout for at least 25 consecutive years. My initial Dividend Champion articles and monthly High Yield Dividend Champion Portfolio focused on just the Dividend Champions. However, DRIP Investing also maintains a Dividend Contenders list which is comprised of stocks with a history of raising dividends for the past 10-24 years. Combining June's Dividend Champions and Dividend Contenders into one list gives us a strong starting point of 248 stocks with long histories of raising dividends. Historical tests have also shown that stocks with higher yields and lower payout ratios have tended to outperform other stocks. With this... more

Assurant's Dividend Is Safe

Here, we'll highlight a given company and its closest competitors to see just how safe their dividends are, with a little help from three crucial tools: The interest coverage ratio, or earnings before interest and taxes, divided by interest expense. The interest coverage ratio measures a company's ability to pay the interest on its debt. An interest coverage ratio less than 1.5 is questionable; a number less than one means that the company is not bringing in enough money to cover its interest expenses. The EPS payout ratio, or dividends per share divided by earnings per share. The EPS payout ratio measures the percentage of earnings that go toward paying the dividend. A ratio greater than 80% is worrisome. The FCF payout ratio, or dividends per share divided by free cash flow per... more

A Better Breed of Dividend Stock

Ring that register Those little checks you receive in the mail (or used to before that whole Internet, e-brokerage thing) actually do more than give you a warm, fuzzy feeling. Evidence proves stocks that pay dividends outperform non-dividend-paying stocks and the broader market over the long term. In a recent article, heralded finance professor Jeremy Siegel echoed as much, saying, "the evidence is overwhelming that dividend-paying stocks are still your best long-term investment. Through the years, diversified portfolios of stocks that pay dividends have not only beaten those that don't, but they have also handily outperformed the S&P 500." It doesn't get much more convincing than that. A better breedAnd while I hope it's abundantly clear we should love dividend stocks, I'll contend that... more

10 High Yield Stocks With Strong Profit Margins

If you are looking to improve your portfolio’s income, this list will provide with a list of high yield and profitable stocks you may want to keep an eye on.To construct this list we looked for stocks with market caps above $300M, dividend yield greater than 3.5% and beta between 0 and 0.5. Once we had gathered this universe of about 100 stocks, we compared each of these names against their industry and kept only those that beat the average in all of the following profitability ratios: Gross margin Operating margin Pretax margin We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 (SPY) index over the last month. Considering this data, which of stocks would you be most likely to put your money... more

8 High Yield Dividend Stocks Still Offer Opportunity to Boost Income

With near record low yields on Treasury securities, investment grade bonds and stocks, investors are looking for alternatives earning higher yields. The benchmark 10 year Treasury bond yields less than 3% and the 2 year Treasury yields a meager 37 basis points. Dividends and capital appreciation provide investment earnings. With the dependability of earning profits from capital gains being called into question, a growing stream of dividends has become more important (especially after the financial meltdown in 2008). Dividend Aristocrats earned their elite status by increasing annual dividends for a minimum of 25 consecutive years. Below is a list of 8 Dividend Aristocrats reviewed 7 months ago with yields then and on June 22:Company Yields------------------Nov 2010--Jun 20111) Pitney... more