5 Dividend Paying Stocks Worth a Closer Look

We generated this list of stocks by filtering for large companies with low valuations, earnings growth, high returns on capital and at least a modest dividend yield. These characteristics are powerful investment traits. These companies do not necessarily have the market's highest dividend yields but we like them because of their overall appeal and safety. These companies each hold a strong brand value and a strong competitive edge in their respective industries. Investors would be wise to take a closer look at these companies.Exxon Mobil Corporation (XOM) Trailing P/E: 11.56 Forward P/E: 8.95 Return on Assets: 10.37% Dividend Yield: 2.9% The global petroleum giant is the largest U.S. company by market capitalization. As of December 31, 2010, the company operated... more

Desperately Seeking Yield Through Equities: Part 1 - BDCs

Fixed income yields are increasingly meager and investors often hesitate to increase yields by buying longer duration fixed income securities because the long awaited increase in interest rates will (if and when it comes) would drive down the prices of those securities dramatically. Thus, we see fixed income investors huddled under the shelter of short term Treasuries, even though the 2 year Treasury yield is .44% and the 5 year is 1.63%. These are pre-tax yields and it is clear that a number of investors in these securities will see the real value of their portfolios slowly evaporate before their eyes with even limited inflation.The equity markets offer opportunities to obtain higher yields with some degree of inflation protection. For example, the dividend on the Dow Jones Utility... more

5 Tips for Young Investors Looking to Start Investing in Dividend Stocks

Young investors rarely get involved in investing in individual stocks for a number of reasons. Whether it is a lack of money available to invest or the inability to navigate the stock market due to a lack of experience and knowledge, it can be difficult to start investing.With that said, starting while young can be very fruitful in many ways. Obviously, your money has more time to grow, but even more, learning how to invest takes years and the experience gained from starting early can be very lucrative.I believe dividend stocks are a great area to focus on for new and young investors because they tend to be less volatile, provide a slight buffer against loss because of the dividend, and most importantly, because the philosophy of investing in such stocks tends to be a more conservative... more

6 Dividend Stocks Providing Increasing Returns

The only way to generate a return on a stock that does not pay dividends is to sell it. Once you sell that stock, you have a taxable event where you have to pay taxes on your whole gain all at once. Contrast this to dividend paying stocks, where a consistent dividend payment spreads out your returns and the taxable liabilities associated with it over time.Several consistent dividend growth stocks announced increased distributions to shareholders, like clockwork. These increased distributions would surely increase the return on investment, particularly at a time when stock prices have been in a decline for six consecutive weeks.Target Corporation (TGT) operates general merchandise stores in the United States. The company’s Board of Directors approved a 20% increase in its quarterly... more

The 15 Top Performing U.S. Dividend Contenders

A U.S. Dividend Contender stock is a stock which has increased its dividend payout between 10 and 24 consecutive years. David Fish provides his list of U.S. Dividend Contenders here. This list is a useful resource for stocks offering dividend reinvestment plans (i.e. DRIPs), and for those investors who automatically reinvest their dividends. In this article, I provide a list of the top performing U.S. Dividend Contenders. Methodology The metric used to identify the top performing U.S. Dividend Contenders is the DRIP-adjusted compound annual growth rate (CAGR). That is, a stock’s compounded annual growth rate assuming full dividend reinvestment at market price on the day the dividend is received. The procedure for identifying the top U.S. Dividend Contenders is as follows.For each... more

Comparing Pollution Control Dividend Payout Ratios

Further to my recent article discussing garbage management companies, here is another closely related group of companies operating in the recycling, remediation and pollution control business. Beyond the resources harvestable from garbage, pollution causes noticeable problems. Pollution control companies produce products such as the filters used everywhere, masks worn by those sorting garbage and the chemical dispersants like those used on oil in the Gulf of Mexico. These businesses are also growing with the increase in global polulation and garbage production. Company Symbol Market Value Payout Ratio Yield Donaldson Company, Inc. DCI $4.2 B 20% 1.10% Nalco Holding Co. NLC $3.7 B 7% 0.50% Pall Corp PLL $6.1 B 28% 1.30% Pentair, Inc. PNR $3.64 B 35% 2.10%... more

Sherwin-Williams' 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. The FCF payout ratio, or dividends per share divided by free cash... more

Are These Dividends Going to Be Around for Long?

But if anyone had a doubt about the power of dividends, they need only read Jeremy Siegel's The Future for Investors, where he writes: "Dividends matter a lot. Reinvesting dividends is the critical factor giving the edge to most winning stocks in the long run." An important metric for dividendsThe telecom sector, in particular, is a gold mine for dividend investors. The average yield in this industry is just below 3%.... more

Deere'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. The FCF payout ratio, or dividends per share divided by free cash... more

Terra Nitrogen'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. The FCF payout ratio, or dividends per share divided by free cash... more