5 Dividend Stocks Ready to Become Champions Soon

The difference between a “dividend champion” and a “dividend contender” is a bit arbitrary, but it still makes for an interesting screen criteria. A “dividend champion” represents a company that has not only paid, but also increased, its dividend payout for at least 25 straight years. A “dividend contender” is a company that has increased its payout for at least 10 years, but not more than 24 years. In the upcoming year we have 5 stocks on the cusp of becoming champions. While there might be debate as to the growth prospects of “dividend champions” or the sustainability of “dividend contenders,” it is widely accepted that a slashed dividend creates a negative signal. Add in the fact that these companies are bidding for the coveted “champion” status and you have... more

5 Surprising and Special Dividend Stocks

Special situation, meet income investingIf you've clicked on this article, you probably love dividend stocks as much as I do. I've written extensively about income investing, detailing the dividend play for a lifetime, the outstanding dividend stock I was buying in January, and other high yields to own for decades. But I think you can do even better by combining your focus on dividend payers and special situations. At its heart, special situations investing is about finding specific events, such as forced selling of a spinoff, that aren't yet reflected in stock prices for technical reasons rather than fundamental business reasons. Such events often create big inefficiencies in the market.... more

Dividend Investors Should Favor Pepsi Over Coke

The other day I was sharing my thoughts with subscribers to my new blog, My Own Analyst, about how some downtrodden Mega Caps were looking like they may finally be turning. In the course of highlighting seven that were within 15% of their 52-week lows, one name surprised me: Pepsico (PEP). I recall 18 months or so ago participating in a debate during an investment committee meeting at one of my clients, and we opted to go with Coca-Cola (KO) over PEP for its higher international exposure, primarily. We also were somewhat concerned over the snack food exposure at PEP. Take a look at how the two stocks have diverged so dramatically since Q3:Click to enlarge While I am no expert on all of the nuances of these two mature companies, one factor that I believe accounts for the vast majority of... more

WWE's Dividend About to Get Slammed?

World Wrestling Entertainment, Inc. (WWE) announced plans to expand beyond wrestling and rebrand itself simply as "WWE" this week. I guess that's pretty interesting, but not nearly as interesting as a small change at the bottom of the company's press release that caught my eye.It's fairly well known that, while WWE's stock carries an unwieldy dividend yield of more than 11%, the stress on the company's cash flow is substantially mitigated by founder Vince McMahon and his family taking a smaller dividend on their shares. When the company raised its quarterly dividend by 50% back in 2008, the McMahons waived the increase on their Class B shares. This was a big deal, essentially evening the total amount distributed to Class A and Class B shares each quarter despite Class B shares accounting... more

Telefonica: Company With High Dividend Yields, Low Payout Ratios

For our dividend portfolio we follow the strategy pioneered by Tweedy Browne of buying companies with high dividend yields but low payout ratios. You can read Tweedy Browne’s investing studies here. Telefonica (TEF) is one company we own that fits the bill. TEF offers a current yield of approximately 6% and over the last five years has paid out only an average 41% of free cash flow as dividends.Telefonica is headquartered in Spain and is the fifth largest telecommunications company in the world with 278M accesses (or total connections) as of June 2010. The company has operations in Spain, Europe and Latin America. Although the company is Spanish, 70% of sales are outside Spain. A detailed overview of Telefonica’s business and growth is shown in Appendix A.Many telecom companies in... more

Dividend Scan: CE, SEE, KALU, STX, PNC, KBH, QADA

As the US market remained volatile during the day, several companies declared their future dividend plans. Some notable dividend payers are discussed here. Celanese Corp. (NYSE: CE) declared a quarterly dividend of 5 cents per share, payable on May 2, 2011 to shareholders of record on April 18, 2011. Shares of the company gained 0.52 percent or 24 cents to $46.68. Sealed Air Corp. (NYSE: SEE) reported a regular cash dividend of 13 cents per share, payable on June 17, 2011 to shareholders of record on June 3, 2011. Shares of the company lost 0.38 percent or 10 cents to $26.46. Kaiser Aluminum Corp. (Nasdaq: KALU) gained 0.32 percent or 16 cents to $49.63 as it declared a quarterly cash dividend of 24 cents per share. The dividend is payable on May 13, 2011 to shareholders of record... more

The Most Promising Dividends in Shoes

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

Bank Dividends Ready to Roar: How to Take Full Advantage

PNC Financial Services Group (PNC) just announced that it will raise its quarterly dividend payout from $0.10 to $0.35 per share. In addition, the bank plans on spending as much as $500 million to repurchase shares in 2011. For the financial industry, this is another positive sign for the increasing health of bank balance sheets. The management's decision to repurchase shares may also be very bullish for equity holders, as this sends a clear signal that PNC's management views the stock as a undervalued.Stronger Than It AppearsWhile the $0.35 quarterly dividend is a nice increase, it hides the company's true implied dividend paying capacity. PNC is allocating $500 million to share buybacks, but if the company had allocated the $500 toward dividend payments, with 525.51 million shares... more

6 Dividend Stocks Building Shareholder Returns

Numerous research projects have shown, a conservative dividend growth based investment strategy has consistently outperformed the market over time. My goal as a dividend growth investor is to build a steadily increasing income and not necessarily to outperform the market via capital gains. But given the choice, I certainty don't mind having both. Below are several dividend stocks building shareholder returns with higher cash dividends: Tanger Factory Outlet Centers, Inc. (SKT) is a publicly-traded REIT headquartered in Greensboro, North Carolina that operates and owns, or has ownership interests in, a portfolio of 34 upscale outlet shopping centers in 22 states. April 7th the company increased its quarterly dividend 3.2% to $0.20/share. The dividend is payable on May 13, 2011 to... more

Highest-Yielding Energy Stocks (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, h owever, 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