Qualcomm'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... more

The Most Promising Dividends in Residential and Commercial Building

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

11 Higher Yielding, Lower Risk Stocks To Perk Up Your Dividend Income

As a society we have grown accustom to wanting it all, including our investments. Specifically, many income investors want both high yield and low risk. A dividend stock with a high yield doesn't mean much if the dividend is cut or eliminated, and the stock price declines significantly.  So can an investor find both higher yields and lower risks? If your goal is to accumulate wealth for a comfortable retirement, then there is no risk-free path. Throughout time every angle has been tried and failed. Inherently, individual stocks will carry higher risk due to the lack of diversification when evaluated on a stand-alone basis. Sometimes it is desirable to accept higher risk for a higher yield. Other times we may be accepting higher risk and are not being adequately compensated for the... more

12 Dividend Boosting Consumer Stocks

In a previous study, we showed that the average return of high dividend yielding stocks was 13.04% between 1927 and 2009. Many defensive investors love high dividend yielding stocks and consider them as alternatives to 10-year Treasury bonds especially in loose monetary environments. On the other hand, some dividend investors are also attracted to a recent dividend boost as well as high dividend yields. Together with high dividend yields, the stocks that increased their dividend payouts in the last year may look promising to dividend investors in the upcoming inflationary environment. Since we believe a recent dividend growth may suggest further increases in dividend yields, the stocks with dividend boosts not only have decent potential upsides but also are appealing to dividend... more

Is Your Dividend Income Riskier Than Expected?

I try to maintain a conservative portfolio of dividend growth stocks, where I maintain proper asset allocation, position sizing and have exposure to asset classes and markets outside of the US. You could see my portfolio here. Since my investments are spread out in several brokerages, it makes sense to keep track of them in one place using spreadsheet software. This makes it easy to compare the overall position size of each stock that I own in relation to my total portfolio overall. In an ideal world, In a dividend portfolio consisting of 40 stocks, one would expect to have a 2.50% allocation to each one of them. In reality however, building a dividend portfolio takes time. The companies which might have been great buys in 2008, might not fit in my entry criteria today. Since I only... more

Broadcom'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 1 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.... more

Lowe’s: Dividend Dynamo or Blowup?

Let's examine how Lowe’s (NYSE: LOW) 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 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

Nucor: Dividend Dynamo or Blowup?

Let's examine how Nucor (NYSE: NUE) 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 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

Aqua America: Dividend Dynamo or Blowup?

Let's examine how Aqua America (NYSE: WTR) 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 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

11 High Yielding, Lower Risk Dividend Stocks

As a society we have grown accustom to wanting it all, including our investments. Specifically, many income investors want both high yield and low risk. A dividend stock with a high yield doesn’t mean much if the dividend is cut or eliminated, and the stock price declines significantly. So can an investor find both higher yields and lower risks? If your goal is to accumulate wealth for a comfortable retirement, then there is no risk-free path. Throughout time every angle has been tried and failed. Inherently, individual stocks will carry higher risk due to the lack of diversification when evaluated on a stand-alone basis. Sometimes it is desirable to accept higher risk for a higher yield. Other times we may be accepting higher risk and are not being adequately compensated for the... more