10 Dividend Growth King Candidates for 2012

Why do we like dividends? Because we like to get paid. While it might be simple to go out and find the biggest yield you can, this method usually isn’t practical. Problems such as sustainability, unreliable income streams and finding a unique business model often get in the way. So income investors turn to the stable companies that have proven that they can consistently increase payouts while maintaining a fundamental business. The true beauty in this consistency is the power of time. Long term investors aren’t overly concerned over a current yield of say 2 or 3%; rather they’re looking forward 10 and 20 years, to 10 and 20% yield on costs. Problem is, even the greatest companies come to a point where growth is difficult. Let’s see if these 10 companies are poised to grow and... more

Value Ideas: 9 High Dividend Yield Stocks With Encouraging ROE Trends

How do you know when a company’s dividend is sustainable? You can always look at historical dividend trends for the company, but another way to is to study the health of the company’s profitability – through DuPont analysis of the company’s return on equity.With that in mind, we ran a DuPont analysis of the return on equity (ROE) of all U.S. companies with dividend yields between 4-7%. From this analysis, we found 9 companies that passed all requirements for positive results. Click to expand image:We broke the ROE equation into three parts:

 ROE = (Net Profit/Equity) = (Net profit/Sales)*(Sales/Assets)*(Assets/Equity) = (Net Profit margin)*(Asset turnover)*(Leverage ratio) 

All of the stocks mentioned below have seen rising ROE values for the... more

This High-Yield Dividend Portfolio Will Beat the Market

Movers & ShakersOf our stocks, again, the biggest mover in the portfolio the past two weeks was Bristol-Myers Squibb, which rose 7.5%. The stock first jumped two Fridays ago when, as Fool Pharma Analyst Brian Orelli expected, the FDA approved the firm’s melanoma drug Yervoy. The drug is a breakthrough in that it is the first time a drug has significantly extended survival for melanoma patients. Money!There are 2 upcoming dividends for the portfolio:... more

Business Development Corporations Yielding Over 8%

A private equity firm is a company that invests in the equity and/or debt of private companies. Many of these firms are limited to accredited investors. But according to a list at WallStreetNewsNetwork.com, there are over 20 that are publicly traded on the NYSE or Nasdaq, with yields ranging from 3.5% to 12.6%. Some of these companies are registered as Business Development Corporations. A Business Development Corporation, also known as a Business Development Company or BDC, is a publicly traded private equity fund. Many private equity companies are registered as BDCs for tax advantages, generally paying no corporate income tax because at least 90 percent of their income, profits, and capital gains are paid out as taxable dividends to investors. PennantPark Investment (PNNT) is a business... more

10 Dividend Achievers Offering Income Growth and Capital Appreciation

Peter Lynch, the legendary manager of the Fidelity Magellan Fund has mentioned the following about dividend achievers: "The Dividend Achievers Handbook is one of my favorite bedside thrillers. Here's a simple way to succeed in Wall Street: Buy the stocks on Mergent's list and stick with them as long as they stay on the list." The stocks he mentions in his book, "One Up on Wall Street," is Automatic Data Processing (ADP), which incidentally has kept raising distributions 20 years after his book was published. In fact some of the best performing stocks on Wall Street over the past decade have been the dividend achievers. Dividend achievers are companies which have increased their distributions for at least ten consecutive years. They provide a superior alternative than investing... more

Will Banks Increase Dividends ?

With the Federal Reserve finally giving its consent for big banks to increase dividend payments, everyone is heaving a sigh of relief … well, almost everyone. The Little Book of Big Dividends: A Safe Formula for Guaranteed Returns (Little Books. Big Profits) Credit rating agency Standard & Poor's seems to have different ideas. The immediate results With several big banks coming up with plans to raise their dividends and buy back stock, it seems that the financial crisis is firmly a thing of the past. Economic recovery aided by strong operating profits in the financial sector has no doubt helped the big banks pass the dividend stress tests. Let's put things into perspective. According to revisions in the GDP last week, the finance sector accounts for 30% of all... more

5 Buffett-Style Dividend Stocks to Own

Stock markets today are volatile, and many investors who don't want to own bonds here for somewhat obvious reasons (for one, Bill Gross is shorting them) may look to the following five high-yielding dividend payers which appear to be exceptional long term-values, based on cash flows and earnings. All five of the following pay out solid dividends to their investors, and are all owned by investment gurus who make a living by holding stocks for incredibly long periods of time.Coca Cola (KO), for example, makes up roughly 20% of Warren Buffett's stock holdings and both KO and Pepsi (PEP) are top investments for value investment ace Donald Yacktman. If you are like me, and believe that the Russell 2000 is destined for a crash given the index fund's curreny overvalued and overbought nature,... more

Why Aren't Banks Justified in Boosting Dividend Payouts?

Credit rating agency Standard & Poor's seems to have different ideas. The immediate resultsWith several big banks coming up with plans to raise their dividends and buy back stock, it seems that the financial crisis is firmly a thing of the past. Economic recovery aided by strong operating profits in the financial sector has no doubt helped the big banks pass the dividend stress tests.... more

Dividend Investing and Higher Interest Rates: BDCs vs. Mortgage REITs

There seems to be more discussion of the prospect and timing of a turn in Federal Reserve policy. From an investor's perspective, it is important to develop a sense of how this will impact different securities. It is well known that long-term fixed rate bonds tend to lose value as prevailing interest rates increase, and an initial assumption might be made that bond-like equities which are attractive primarily because of dividend yield would behave the same way. Two categories of equities I have followed closely bear scrutiny in this regard. Both Business Development Companies (BDCs) and Agency Mortgage REITs are "bond-like" in that their primary assets are debt instruments and they are bought primarily by yield oriented investors.Before going any further, I should note that I am not in... more

7 Stocks That Have Raised or Are Expected to Raise their Dividends

Three consistent dividend stocks raised distributions over the past week. I define consistent dividend payers as companies which have raised dividends for at least five years in a row. These companies merit further research by dividend investors. However, I only intend to purchase stock in companies which have consistently raised dividends for at least one decade. The companies which announced dividend increases last week include:The TJX Companies, Inc. (TJX) operates as an off-price retailer of apparel and home fashions in the United States and internationally. The company raised its quarterly dividend by 26.70% to 19 cents/share. This marked the 16th consecutive annual dividend increase for this dividend achiever. Yield: 1.50% Bank of the Ozarks, Inc. (OZRK) operates as the bank holding... more