Dividends: What Companies Should Do With Their Cash Hoards

In an article in Saturday's Wall Street Journal, Jason Zweig asked the question, "What will it take for companies to unlock their cash hoards?" At Smead Capital Management, we'd like to expound on his thoughts and examine our own portfolio under the magnifying glass presented. Zweig dealt with the key facts. First, companies with large cash balances are adding to them. Second, payouts are historically low as he showed through this research: "Meanwhile, the payout ratio - the proportion of earnings paid out as dividend income to shareholders - fell to 28.9% for the past four quarters. That, says S&P senior index analyst Howard Silverblatt, is the lowest level since 1936." Third, the point has probably come where the best interests of corporate management and the shareholders are at odds.... more

10 Asian Stocks for Dividend Seekers

Traditionally investors have preferred large cap companies in developed countries when it comes to investing for dividend income. This is because many of the large companies in Western Europe, Canada, the U.S. and other developed markets are established companies with defined dividend payout policies and have history of rewarding shareholders with cash in the form of dividends.Investors rarely considered emerging market equities for their dividend potential. However, this view is slowly changing and smart investors are heading to the emerging markets of Latin America and Asia, hunting for dividend stocks. Asia is increasingly becoming an attractive destination for dividend investors. Some of the reasons for investing in Asian equities for dividend income are: The dividend yield for... more

Growing Your Portfolio With Water-Utility Stock Dividends and 5 to Consider

In a world where disruptive technologies keep changing modern society, water remains a constant. Clean water is taken for granted by many citizens. To ensure safe water is available, there are water utilities, and these companies are worth considering for their investment potential. They generally have low betas and are typically bought for their dividends. When I was younger I thought water companies were boring. Today I like the fact that they are boring. One's age and one's desire for capital preservation can be dominant investment themes. After all, water infrastructure is required in all communities. Water is one core "must have" item for each and every family. In this sector, I look at the debt levels which have a higher debt-to-equity percentage than other sectors. A closer review... more

8 Stocks Providing Positive Feedback With Higher Dividends

It seems that every investing article ends with the same conclusion - you should be buying dividend stocks. Beyond the simple concepts, some of the writers of these articles are making really bad recommendations and cross-breeding dividend investing with their preferred form of investing. Dividend growth investing is not about exit points, momentum swings, relative strength, sector rotation; instead it is about studying fundamentals, selecting superior stocks and building a portfolio with a long-term horizon. When we buy a dividend stock, we hope to hold it forever. This week several companies provided their shareholders positive feedback with increased cash dividends:Lowe's Companies, Inc. (LOW) operates as a home improvement retailer in the United States, Canada, and Mexico. May 27th... more

3 High Yield Stocks With Strong Cash vs. Operating Expenses

It has been proven time and again that the market is uncertain, so how does a company prepare for shifts in the market? One was is to look at a company’s cash holdings relative to their average operating expenses. To create this list we screened for US stocks with high yield dividends (above 5%). We then took the average operating expense of each company’s 4 previous market quarters and compared that with its cash holdings. Cash/Average Operating Expenses translates into the number of quarters the company can survive without generating new revenues (while operating at average expense). Companies with more cash holdings than operating expenses may be less risky during business downturns (but do your own analysis to confirm). Interactive Chart: Press Play to compare changes in analyst... more

The World's Best Dividend Portfolio

Fool.com readers have clamored for coverage of some of the juiciest dividend stocks out there, and I'm here to deliver what I call the world's best dividend portfolio. I'll even back up my words with some cold hard cash. I believe so strongly in the long-term prospects of the 10 companies below that I promise not to sell them for at least the next 12 months. In fact, I expect they'll become the cornerstones of my dividend portfolio for years. Read on to find out where my money's going, because the time to act is now.... more

7 Little-Known Companies With Extraordinary Dividends

The basis for my screen was: Dividend yield >/= 3% Market cap > $200 million Average daily volume < 30,000 Price > $5.00 I felt this screen would allow me to weed out volatile micro-caps so we could discover some truly special dividend payers that have thus far gone unnoticed. Here are the seven companies I chose:... more

The 10 Highest-Yielding Royalty Trusts

One particular area has garnered interest over the years are royalty trusts. Investors are drawn to royalty trusts for their high yields. Royalty trusts don't pay taxes at the corporate level, so the tax burden then gets passed to the investor. One thing to consider, however, is that unlike normal operating businesses, most trusts are depleting assets. Eventually the income-producing ability of the trust will end.... more

Dividend Scan: CHG, VZ, HD, CBK, GIM, YSI

Several companies declared their future dividend plans despite the US stock indexes remaining in a negative territory. Some notable dividend payers are discussed here. CH Energy Group, Inc. (NYSE: CHG) announced a regular quarterly dividend of 54 cents per share, payable on August 1, 2011 to shareholders of record on July 11, 2011. Shares were down 0.77 percent or 41 cents to trade at $52.67. Shares of Verizon Communications In. (NYSE: VZ) lost 0.70 percent or 26 cents to trade at $36.01 despite announcing a quarterly dividend of 48.75 per outstanding shares. The dividend is payable on August 1, 2011 to shareholders of record on July 8, 2011. Home Depot Inc. (NYSE: HD) announced a quarterly dividend of 25 cents per share, payable on June 30, 2011 to shareholders of record on June... more

Step Away From This Dividend Stock

I tend to tune out the talking heads on CNBC, stay away from minute-by-minute checking of my stocks, and take long walks on the beach. Yet there is one group of people whose opinion counts above all else in my investing world: My middle-school-aged cousins.... more