My Diversified, High-Yield Portfolio - Part 2

In the first part of this article, I laid out my diversified, high-yielding portfolio comprised of stocks, preferred stocks, ETFs, and closed-end funds here. In this article, I'd like to expand on one of the opening statements of Part I -- that the portfolio is constructed to provide nice risk-adjusted returns, with "risk-adjusted" being the operative word. Portfolio Comments I received a number of beneficial comments on specific holdings of the portfolio. Tom in Texas wrote, "[Cheniere Energy] CQP plans to export LGN by expanding their facility in the next several years, but in the meantime, I can only see declining revenues." I have done some additional due diligence on CQP, and after reading other discussions on this stock, coupled with the latest earnings report, I decided to... more

Dividend Scan: CE, LYB, RIG, SLB, BSRR, HRS, NWBI

Amidst negative trends in the U.S. market, several companies declared their future dividend plans. Some significant dividend announcements are highlighted here. Celanese Corp. (NYSE: CE) shares were down 1.42 percent, or 69 cents, to trade at $47.76 as it declared a 20 percent increase in its quarterly cash dividend to 6 cents from 5 cents. LyondellBasell Industries NV (NYSE: LYB) announced a dividend of 10 cents per share, payable on May 26, 2011 to shareholders of record on May 5, 2011. Shares of the company added 0.23 percent, or 10 cents, to trade at $42.83. Transocean Ltd. (NYSE: RIG) plans to pay its shareholders $1 billion in dividends even after the payout was blocked by a court in August 2010. Shares of the company lost 2 percent, or $1.51, to trade at... more

This High-Yield Dividend Portfolio Will Beat the Market

Over the past two weeks, the S&P rose a slight 0.69%. Our portfolio maintained its outperformance of the market, moving from outperforming the market by 2 percentage points to only beating it by about 1.4. While outperformance is always good, it should be taken with a grain of salt. We're investing for the long term, and it's only been nine weeks. I firmly believe the results will bear us out. Movers & shakersOf our stocks, the biggest mover in the portfolio the past two weeks was Philip Morris, which rose 2.7%. The company released its first-quarter earnings last week, in which it beat analyst expectations and also increased earnings guidance by $0.20 for 2011.... more

4 Bargain Stocks Yielding More Than 4%

We are getting close to the upcoming end of QE2 (not to sound like a broken record). In addition, the economy is dealing with rising gas prices that are closing in on $4/gallon and some other very worrying inflation signs. This combined with the continued European Debt troubles and unfolding Middle Eastern turmoil could make for a very turbulent summer. I continue to believe it pays to be safe here. Any new stock purchases should be targeted to safe, boring blue chips with high dividend yields and reasonable valuations in my opinion. Here are four stocks yielding over 4% that should be considered:American Electric Power Company (AEP) - American Electric Power Company, Inc. engages in the generation, transmission, and distribution of electric power. It generates electricity using coal and... more

The Most Promising Dividends in National Brokerages

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

Nine Income Stocks With Positive Dividend Trends

When evaluating a dividend stock, one of the criteria I look for is a rising dividend stream over time. I prefer to invest in companies which have consistently raised dividends for at least ten years in a row. I also examine the dividend record using as much historical data as available. I specifically look for prior dividend cuts, a pattern of significant dividend increases as well as a history of significant distribution payments. Most importantly, I look for the trend in dividend payments to be higher each year. I have highlighted the following stocks, which have raised dividends for more than five years in a row and also announced distribution increases over the past week: Kinder Morgan Energy Partners, L.P. (KMP) owns and manages energy transportation and storage assets. This... more

American Express (NYSE: AXP) Dividend Analysis

American Express Co. (NYSE: AXP) is not a huge dividend payer, but it does yield 1.5 percent on an annual basis. Does American Express have room to increase their dividend moving forward? How do the financial statements of the company look? What do analysts think of the company right now? Let's take a look at all of these questions as we analyze American Express. First of all, let's take a look at the dividend payout ratio for American Express. I consider any ratio above 60 percent to be at risk, meaning the company may have to cut the dividend payout moving forward. On the other hand, a dividend payout ratio of less than 40% often shows that the company has plenty of room to raise the dividend in the future. American Express currently has a dividend payout ratio of just 21%. On this... more

You Can’t Beat These Utility Dividends

Oil and natural gas prices can also positively and negatively affect the bottom line. A company that finds itself levered to the max can encounter serious issues if commodity pricing doesn’t go its way. Dynegy (NYSE: DYN) , for example, has already warned that it may not be able to meet its debt obligations in the second half of this year as the company has struggled mightily to return to profitability. Luckily for us, there are only a handful of bad seeds in the utilities sector; weeding out the best of the best is actually the toughest part. I consider this just the tip of the iceberg and encourage further research, but these five utility companies have unparalleled dividends and other encouraging similarities. Company Years Paying Current Yield ... more

28 Undervalued Dividend Stocks

In the past year, a friend of mine has shifted a large percentage of his portfolio to stable, dividend paying companies from growth stocks. The allure of a steady stream of dividends overcame his desire for capital appreciation. He is not alone in his quest but is he correct to place a greater emphasis on dividends than on capital appreciation? I do not think this is an either/or proposition. Dividends contribute significantly to an investment’s total return. Ibbotson Associates estimates that over the very long term, dividends contribute as much as 40% to total return. However, the largest gains in total return are derived from capital appreciation. To resolve this dichotomy, I try to identify undervalued dividend paying stocks. The income stream provides a certain level of support... 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 Southern Company (NYSE: SO ) . The Atlanta-based electric utility with 4.4 million juiced-up customers powered up its quarterly dividend by 4% to $0.4725 a share. Investors should be used to this by now, as Southern has come through with 10 consecutive years of giving its distributions a northern push.... more