Top Dividend Stocks Based on Dividend History, Yield and Payout

I write extensively on the U.S. Dividend Champion list maintained and updated by DRIP Investing. The list is comprised of stocks that have increased their dividend payout for at least 25 consecutive years.My initial Dividend Champion articles focused on just the Dividend Champions. However, DRIP Investing also maintains a Dividend Contenders list which is comprised of stocks with a history of raising dividends for the past 10-24 years.Combining April's Dividend Champions and Dividend Contenders into one list gives us a strong starting point of 242 stocks with long histories of raising dividends. Historical tests have also shown that stocks with higher yields and lower payout ratios have tended to outperform other stocks.With this information in tow, I ranked the yields and payout ratios... more

Periodic Table of Dividend Champions - New and Improved

This is an update to the first Periodic Table of Dividend Champions, published last December. For our periodic stock table, the two key characteristics that determine the presentation are yield and dividend growth rate (DGR). Once again, I give my thanks to David Fish for his blessing in allowing me to stand on his shoulders and present various snapshots of his terrific Dividend Champions work. This presentation is based on David’s document dated March 31, 2011. For the uninitiated, Dividend Champions are stocks that have increased their dividend payout for 25 consecutive years or more. At the moment there are 100 such stocks. I am making what I believe is an improvement in the presentation of this table. Last time, I used the five-year dividend growth rate (DGR) as the determinative... more

8 Dividend Champion Inflation Proof Plays

Inflation seems tamed as the core inflation rate is growing a mere 1.1 percent annually and consumer prices rose only 2.1 percent over the year according to the most recent data out in February. Even so, inflows of cash have been gushing into funds that invest in customary inflation plays. These funds include Treasury inflation-protected securities, stocks, and commodities. Morningstar’s Editorial Director Kevin McDevitt, CFA, stated (pdf): “Long-term flows roared back in January with nearly $30 billion in estimated inflows, reversing December's $10.6 billion outflow. U.S. stock funds led the surge with nearly $16 billion in inflows, with U.S. stock exchange-traded funds collecting another $10 billion. This is the biggest haul for open-end U.S. stock funds since February 2006 and... more

Dividend Stocks That Make the Grade

The initial criteria I used for my screen were: Return on assets of 1% or more (to eliminate inefficient financials). Dividend yield of 3% or higher. Debt to equity ratio of 50% or less. We don't want high-risk debt-laden companies with dividends likely to be cut or disappear. Five-year dividend growth rates in the 70th percentile. You want companies that have shown a track record of increasing their payouts. Dividends to free cash flow of around 50% or less. This one I check for manually after the initial screening. There were 62 stocks that came up based on the first four criteria. Here are five that passed the final test and are worth a closer look, based on safety of the dividend and long term catalysts.... more

7 Cash-Rich, High Dividend Stocks Seeing Short Covering

When choosing a high dividend stock, it is important to look at the free cash flows that would be financing the dividend to assess whether it appears sustainable. One appropriate measure is levered free cash flow, which is the free cash flow available after paying interest and re-paying necessary principal to bondholders. Levered free cash flow is the cash flow from which dividends are paid or earnings are retained (under the Board’s discretion). Using levered free cash flow, we wanted to find attractive, high-dividend stocks, so we screened for those with significant amounts of levered free cash flow as a percentage of market cap.Then we went one step further. Among this list of high cash, high dividend stocks, we found those with recent bullish sentiment, as indicated by significant... more

Dividend Scan: GR, FCX, OKE, TCB, OCC, FCCO, BRO

Several companies declared their future dividend plans. Some notable dividend payers are discussed here. Goodrich Corp. (NYSE: GR) declared a quarterly dividend of 29 cents per share, payable on July 1, 2011 to shareholders of record on June 1, 2011. Shares of the company gained 2.06 percent, or $1.77, to trade at $87.71 in the mid-day session. Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) announced a supplemental dividend of 50 cents per share to shareholders of record on May 15, 2011. Shares of the company added 3.58 percent, or $1.86, to trade at $53.55. ONEOK, Inc. (NYSE: OKE) declared a quarterly dividend of 52 cents per share, payable on May 13, 2011 to shareholders of record on April 29, 2011. Shares of the company gained 2.67 percent, or $1.72, to trade at... more

The Dangers Of Some High-Yield Dividend Stocks

Dividend stocks are a powerful way to build up your portfolio, but you must keep in mind that not all dividend stocks are created equal. Investors with little experience purchasing dividend-yielding stocks often look only at the dividend yield of the stock, which is a large mistake. There are certainly times where high-yielding stocks are a great investment, but there are other times where a high dividend yield is a sign of underlying problems for the company. It is important to realize the dangers associated with dividend-yielding stocks that look too good to be true. When is a high-dividend yield a warning sign? There are a couple quick ways to gauge the dividend yield of an individual stock. The first metric you should take a look at is the dividend payout ratio. This tells you what... more

The Top Dividend Aristocrats in Retail

When searching for great dividend stocks, it makes a lot of sense to start with companies that have been playing the dividend game the longest. Standard & Poor's has culled the dividend winners from the also-rans in a list it calls the "Dividend Aristocrats." Let's examine the top Dividend Aristocrats by yield in the retailing industry. For context, I've also included their five-year annualized dividend growth rate.... more

The Top Dividend Aristocrats in Consumer Durables

When searching for great dividend stocks, it makes a lot of sense to start with companies that have been playing the dividend game the longest. Standard & Poor's has culled the dividend winners from the also-rans in a list it calls the "Dividend Aristocrats." Let's examine the top Dividend Aristocrats by yield among consumer durables. For context, I've also included their five-year annualized dividend growth rate.... more

6 Safe Yields Whether Q2 Is Foggy or Fair

Investment Underground anticipates two scenarios for Q2 2011. Investors will head for the exits amid choppy markets, congressional debt grappling and QE2 curtailment, or investors will scoop up bargains paying dividends, often paying yields in excess of company bonds. Either way, these names should stand out from market peers: Johnson & Jonson (JNJ): The healthcare giant is making moves to buy device maker, Synthes, and looks like a leader in earnings season. The company holds a price/sales ratio of 2.7, not much higher than its 10-year low of 2.14, and sports a P/E ratio of 12.6. While recent product recalls could hurt the JNJ brand and cost millions of dollars, the firm is too diverse, too financially healthy, and too well run to not overcome the setback. And considering that the firm... more