Eight Dividend Stocks Raising Yield On Cost

Dividend growth stocks are the best kept secret on Wall Street. These companies provide early investors with a growing stream of dividend income, which increases their yields on cost. Few investors recognize the potential of solid companies paying yields of 2%-3% today that consistently grow distributions. Such investments could produce a double digit yield on cost over time to early investors. For example, investors who purchased Lowe's (LOW) shares 15 years ago are generating a 12.60% yield on cost today. Those lucky few who purchased when Lowe's became a Dividend Aristocrat 24 years ago are sitting on an yield on cost of over 100%. Several dividend growth stocks increased distributions last week, which increased yields on cost for its investors. The companies include: Lowe's... more

4 Dividend Stocks Showing You the Money

Readers of the Income Investor newsletter can certainly appreciate that kind of thinking. Let's take a closer look at some of the companies that inched their payouts higher this past week. Let's start with Deere (NYSE: DE) . The maker of agricultural equipment is harvesting a more bountiful dividend. Deere's new quarterly rate of $0.41 a share is a 17% improvement. Shareholders should be used to this by now, since Deere has come through with nine increases over the past seven years.... more

Dividend Sector Review: Technology

Not just any dividend-paying stocks will do, however, and it's important to take a holistic approach to evaluating these opportunities. That's one reason that last year I created the Dividend Report Card, which looks at metrics such as dividend history, payout ratios, and interest coverage to determine the sustainability and growth potential of a company's dividend. Today, I'd like to take a bird's-eye view of dividend health at the sector level and take a gander at technology stocks.... more

Intel: Dividend Dynamo or Blowup?

Let's examine how Intel (Nasdaq: INTC) 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

General Electric: Dividend Dynamo or Blowup?

Let's examine how General Electric (NYSE: GE) 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

Cisco Systems: Dividend Dynamo or Blowup?

Let's examine how Cisco (Nasdaq: CSCO) 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

The Most Promising Dividends in Industrial Electrical Equipment

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

Caterpillar: Dividend Dynamo or Blowup?

Let's examine how Caterpillar (NYSE: CAT) stacks up in four critical areas to determine whether it's a dividend dynamo or a disaster in the making. 1. Yield First 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. Caterpillar yields 1.7% -- modest and certainly not cause for alarm. 2. Payout ratio The payout ratio might be the most important metric for judging dividend sustainability. It compares the amount of money a company pays out in dividends with the amount it generates. A ratio that's too high -- say, greater than 80% of earnings -- indicates that the company may... more

Applied Materials: Dividend Dynamo or Blowup?

Let's examine how Applied Materials (Nasdaq: AMAT) stacks up in four critical areas to determine whether it's a dividend dynamo or a disaster in the making. 1. Yield First 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. Applied Materials yields 2.3% -- moderate and certainly not cause for alarm. 2. Payout ratio The payout ratio might be the most important metric for judging dividend sustainability. It compares the amount of money a company pays out in dividends with the amount it generates. A ratio that's too high -- say, greater than 80% of earnings -- indicates that... more

General Electric: Eschew the Buybacks, Hike the Dividend More Meaningfully

General Electric (GE), trading at $19.62/share, has done rather well since its stock price troughed in early 2009. Even its two-thirds slashed dividend is recovering as it now stands at $0.60/share annually vs. $0.40/share at the bottom -- but that's still less than 50% of its $1.24/share payout in 2008, and also happens to be 50% of ttm EPS. While the '08-'09 stock price collapse was painful to watch, it has benefited those who dollar-cost-average (such as myself, via a DRIP), although such investors (non-employees) are likely in the minority. Nevertheless, as you can see in the accompanying stock chart (click to enlarge), GE's stock price remains at half its pre-crash high. At present, given GE's pruning back of GE Capital, its strengthening of its balance sheet, and its robust cash... more