12 Highest-Yielding Stocks in Bill Nygren's Extremely Profitable Portfolio

We have a look at value investor and guru Bill Nygren's stock holdings. Nygren runs several funds under the Oakmark Funds brand. His cumulative 10-year track record soundly beats the S&P 500. He earned returns of 74.5% to the S&P's 16.4%. Here are the highest yielding stocks in his portfolio: Glaxo Smith Kline PLC (GSK): Nygren holds nearly 1.6 million shares of Glaxo. The pharmaceutical giant is currently trading at a 35.47 P/E ratio, and offers a $2.46 (6.40%) dividend. After 18 years in a partnership with Human Genome Sciences (HGSI), GSK finally has its first reward after the FDA approved a new lupus treatment discovered by the group. The group has several treatments for other conditions still in testing. BristolMyers Squibb (BMY): Nygren holds 2.65 million shares of BristolMyers.... more

The Most Promising Dividends in Agricultural Chemicals

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

Investors Who Seek Alpha Should Seek Out Dividend Stocks

“The deepest sin against the human mind is to believe things without evidence.” Thomas H. Huxley. I hate to be one of those bores who keeps repeating the same thing repeating the same thing, but yet more research shows that dividend stocks generate simply superb long-run returns, not only beating the market but absolutely walloping non-dividend payers. What’s so intriguing about this newest research (pdf) is it also calculates dividend stocks’ alpha – a fancy rocket-science statistic measuring risk-adjusted excess returns. While mathematically complex, alpha’s purpose is straightforward. It provides an objective measure of whether investors taking higher risks are being rewarded with higher returns. In a stunning reversal of the conventional tenets of risk vs. reward,... more

Gold Versus Dividend Stocks

Investors typically make money when the assets they own increase in value and/or when the assets they own deliver dividend, interest or rental income. When combined, income and price returns results in the total returns equation. One asset that has generated positive total returns every year since 2000 is gold. Investors who bet on the yellow metal have generated 17.70% annual returns over that period. Right now the precious metal is hitting all-time highs, as many investors expect that the amount of monetary stimulus by the Federal Reserve would create massive inflation in the US. This speculative frenzy is catching up quickly, as investors bid up gold through one of the many vehicles available to dabble ”“ gold etfs, gold futures, physical gold etc. For example, one of the largest... more

Why Dividend Stocks Are Evil

I can't carry on anymore. The secret has become too much of a burden and it must be shared with the masses. This will shock some and enrage others, but it must be said, and I should be the one to say it. Dividend stocks are evil and they will eventually lead to the collapse of western civilization as we know it. There, I said it and here is why I believe it… Dividend Stocks Empowers People By starting early in life and building a portfolio of dividend growth stocks, people are empowering themselves and taking charge of their future. At first blush, this may not sound like a bad thing but consider the consequences. Lord Acton saw the problem more than a century ago when he stated "All power tends to corrupt; absolute power corrupts absolutely." Power is meant for the government, not... more

Why You Should Hold Your Dividend Stocks in Tax-Sheltered Accounts

Among dividend investors, where is it best to hold dividend stocks has become a frequent topic of debate. So here's the question: you have cash to invest in dividend stocks, do you: Pay income tax on the cash, and invest the rest in a taxable account; or do you Invest the entire amount of cash in a tax-sheltered account (IRA/401K/etc)? You might think that you should hold dividend stocks in a taxable account, because then the dividends would be taxed at the rate for qualified dividends, rather than be taxed at the rate for ordinary income. But it turns out you would be better off if you hold dividend stocks in a tax-sheltered account. I’ll start out by providing a specific example, then widen out my perspective to try to arrive at a general rule. Here's the example: ... more

Gold vs. Dividend Stocks

Investors typically make money when the assets they own increase in value and/or when the assets they own deliver dividend, interest or rental income. When combined, income and price returns result in the total returns equation. One asset that has generated positive total returns every year since 2000 is gold. Investors who bet on the yellow metal have generated 17.70% annual returns over that period. Right now the precious metal is hitting all-time highs, as many investors expect that the amount of monetary stimulus by the Federal Reserve would create massive inflation in the US. This speculative frenzy is catching up quickly, as investors bid up gold through one of the many vehicles available to investors who wish to dabble in gold – gold ETFs, gold futures, physical gold etc.... more

Here's Why Dividend Stocks Are Evil (And 7 Good Examples Worth Considering)

I can’t carry on anymore. The secret has become too much of a burden and it must be shared with the masses. This will shock some and enrage others, but it must be said, and I should be the one to say it. Dividend stocks are evil and they will eventually lead to the collapse of western civilization as we know it. There, I said it and here is why I believe it: Dividend Stocks Empowers People By starting early in life and building a portfolio of dividend growth stocks, people are empowering themselves and taking charge of their future. At first blush, this may not sound like a bad thing but consider the consequences. Lord Acton saw the problem more than a century ago when he stated “All power tends to corrupt; absolute power corrupts absolutely.” Power is meant for the government,... more

Dissecting Perkins Small Cap Value Fund:Top Dividend Stocks Yielding 4.1%

Perkins Small Cap Value Fund (JSIVX) has all the right ratings and a great long-term track record. It's so good that the fund is closed to new investors.For income investors looking for some small/mid cap diversification I thought it would be interesting to take a closer look at the Perkins Fund's top small/mid cap holdings that provide attractive dividend yields. Seven of the top ten holdings as of 2/28/2011 have attractive yields, with the group generating an average yield of 4.1%. Those seven stocks have an average market cap of $1.8 billion. Perkins Top Small Cap High Dividend Yield StocksAdditional Analysis - Dividend Growth Rate When looking at smaller cap income opportunities I like to see a solid track record of dividend increases since small cap stocks generally carry more risk... more

First Niagara Financial: The Impact of Dividends on Returns

In my last article, I analyzed the top Small Cap dividend stocks in the Perkins Small Cap Value Fund. While most investors know intuitively that dividends have a significant impact on returns, I found a great example among one of the fund's holdings illustrating this point, which make it worth sharing. First Niagara Financial Corp (FNFG) has raised dividends a total of 45% over the past 5 years. At the same time, its stock price during the past 5 years has shown almost no price appreciation. Note the 5 year chart (click to enlarge), below. A return of approximately 0% without dividends based on the price chart above.So how did the dividends help? In the table below (click to enlarge), note that FNFG provided a return of 14.8% and beat its benchmark by 11.8% over the 5 year time frame!... more