5 Dividend Stocks Getting Slammed

In particular, I'm a huge fan of dividend stocks. Renowned professor Jeremy Siegel has illustrated that from 1957 to 2003, when reinvesting dividends, the S&P's 100 highest-yielding stocks outperformed the market by an average of 3 percentage points. Over a long period of time, three percentage points can really add up. So if you can find dividend stocks trading cheaply, and can separate the good from the bad, you may have found yourself a real winner. In this regular series, I run a screen for dividend stocks that have gotten crushed in the past three months, in addition to companies that are trading at low P/E's. Below is a selection of stocks that I like, additionally rated by our own 170,000-strong CAPS community.... more

Rising Stars: Safe High Yielders

My real-money Rising Star portfolio uses a smart screening process to find great stocks. Today, we're going hunting for the most attractive high-yielding companies out there -- those with businesses strong enough to hopefully avoid a devastating dividend cut. Most people now recognize the power of dividend investing. Higher-yielding stocks tend to offer higher returns over time than low- or no-yield stocks, according to research from Jeremy Siegel and others. In fact, the 20 best-performing survivor stocks from the original S&P 500 in 1957 are all dividend payers.... more

Highest-Yielding Financials (You Might Actually Want to Buy)

What's more, reinvesting dividends acts as a "bear-market protector and return accelerator," according to Siegel. The extra shares purchased and accumulated at higher dividend yields during down periods act as a protector in falling markets, and these extra shares rising in value turn into a "return accelerator" when prices rise. As the recent economic crisis illustrated all too well, however, you can't buy just any high-yielding stock. Dividends that get cut or suspended entirely can wreak havoc on a stock price -- and thus, your portfolio.... more

The Most Promising Dividends in Airlines

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

The Best Portfolio Protection Money Can Buy

These aren't necessarily outliers. Using the same strategy -- the one I'll reveal in a minute -- you could have enjoyed 25% or better returns in each of these two "losing" stocks: Company Unadjusted Return* Total Return N. European Oil Royalty Trust (NYSE: NRT) (3.4%) 26.1% Resource Capital (NYSE: RSO) (5.2%) 73.2% Sources: Capital IQ, a division of Standard & Poor's, and Yahoo! Finance.*From July 10, 2008, per Yahoo! Finance. Our family portfolio has done almost as well. Our stake in Apollo Investment is up 18%, while Prospect Capital has returned 33%. Gross losses became net gains thanks to some not so fancy maneuvering on my part.... more

2 Aerospace/Defense Dividends to Buy and 1 to Avoid

After some careful digging, I've uncovered two aerospace and defense sector dividends that can be trusted to protect and serve your portfolio, while also digging up one that you may be best off avoiding. Raytheon (NYSE: RTN) -- Trust itNot only is Raytheon the manufacturer of the military assault missile, the Tomahawk, but it's also producing explosions on the dividend front. Raytheon's dividend has more than doubled since 2004, and the company now bears one of the highest yields in the sector at 3.4%.... more

Rising Star Buy: Annaly Capital

High unemployment, a dour housing market, overleveraged consumers, and dallying legislators -- what's a Fool have to do to earn a return in this market? I see the answer in Annaly Capital (NYSE: NLY) , which my Special Situations portfolio is buying tomorrow. Annaly can still benefit from this set of ugly circumstances, as the economy returns to normalcy only in fits and starts. And we get to cash the company's 13.8% dividend. The businessAnnaly's business model is focused around the interest rate spread it earns between borrowing short-term money and buying long-term mortgage-backed securities that are guaranteed by the government and collecting the interest on them. Since Annaly is a mortgage REIT, it pays out nearly all of its earnings, and so it has that gaudy dividend you see.... more

The Big Dividend Heist

All could happen. But there's something simple American corporations could do today that would dramatically boost the appeal of the stock market: increase the dividend payout ratio back to historic averages. The dividend payout ratio -- dividends as a percentage of earnings -- on the S&P 500 Index has plunged to its lowest level in modern history. The current payout ratio, 29%, is less than half its long-term average:... more

Crush Inflation With This Dividend Strategy Guide

Source: Google Trends. The number of people typing "inflation" into search engines is now outpacing that of people searching for "stock market."... more

How to Get an ETF to Pay You Fees

Why did someone invest in a Spider?Let's take a step back. The world of ETF investing has exploded over the past decade, and BlackRock's iShares is the 800-pound gorilla in the space. ETFs trade like stocks, yet at the same time, they provide diversification benefits, low expenses, and are relatively tax efficient. Most ETFs aren't actively managed and as a result have low turnover and lower costs than actively managed mutual funds. The first true ETF was issued in 1993 to track the Standard and Poor's S&P 500 index. This ETF trades under the ticker SPY and commonly referred to as "spiders."... more