Why Dividend Paying Consumer Staples Are No Longer a Safe Haven

It feels like a perfect storm. A magnitude-9 earthquake and a tsunami devastate much of Japan. Thousands of people are killed or missing. Radiation poisons the air and the food supply. A core meltdown is still possible. The global supply chain for everything from technology products to the auto industry is disrupted. From Morocco on the shores of the Atlantic to the mountains of Iran, country after country struggles with regime change and civil war. The problems in Europe are different-- but no less dramatic. The financial crisis is alive and well, particularly in the countries bordering the Mediterranean Sea. Portugal, Spain, Italy and Greece are on the verge of financial collapse. Where does this leave us? The emerging markets have their own set of problems and, for the time being at... more

So What's With The Bank Dividends?

Oh, so "some" banks can increase dividends or buy back shares? Overall, both the quantity and quality of capital at many large bank holding companies have improved since the financial crisis, the Fed said. The return of capital to shareholders under appropriate conditions is a step in the process of improvement in the financial sector and will help to promote banks long-term access to capital. Really? Is there actual coverage of bank "assets" by actual capital? How about second lines on homes, for instance? There are a few people who I converse with on the forum and elsewhere who have been looking through some offerings of these loans, and also tracking their performance. I've long argued that one of the big scams with bank balance sheets is that these loans are, as second... more

After Cisco: 5 Tech Giants With Enough Free Cash Flow to Initiate or Raise Dividends

After Cisco announced it would start paying a quarterly dividend for the first time ever last week, we decided to take a look at the other tech giants in the marketplace to see they're next. Here's what we discovered:Microsoft (MSFT): Microsoft Corporation develops, manufactures, licenses, and supports a range of software products and services for various computing devices worldwide. Microsoft’s market cap is 208.38B and their dividend yield (rate) is 0.64 (2.5%). The next dividend will be paid June 8, 2011.With regard to the last ten years' financial statements, the trends of free cash flow, net margin percentage and return on equity are increasing. Therefore, Microsoft has room to raise its dividend through 2012. Microsoft holds over $40 Billion in cash on its books. It is time for... more

9 Big Banks With Dividends Poised to Rebound Strongly This Year

We took a look at large bank balance sheets to see who was most likely to reinstate a hefty dividend. Dividends were previously cut in early 2009 because of the financial crisis. But fresh from undergoing ‘stress tests’, the top banks have been given approval to raise dividends. According to the Fed, firms are “generally expected” to limit 2011 dividends to 30 percent of expected earnings. Still, this is good news for investors not only because of the extra income, but also because of the total return they provide. Our sights are on the following financial services companies: Here are nine safe bets to win the race: Fifth Third Bancorp (FITB): Fifth Third Bancorp is the holding company in which Fifth Third Bank is the principal subsidiary. The current P/E is 22.27; the... more

Do Dividend Increases Keep Up With Inflation?

Perhaps you are wondering whether the income from the portion of a retirement portfolio that you allocate to dividend-growth stocks will keep up with inflation. It’s an important question. Inflation is the hidden leak that all retirement plans must account for. The news is good. While stock prices move up and down all the time, dividends almost always go up. Whoa! Dividends only go up?? At first glance, that sounds like a ridiculous statement. Companies cut or freeze their dividends all the time. Didn’t a bunch of banks drop their dividends, or cut them to a penny, just a couple years ago? Didn’t BP eliminate their dividend shortly after their rig blew up last year? Yes, they did. But in a well-selected portfolio of dividend-growth stocks, the total dividends paid by the portfolio... more

5 Stalwarts With Solid Yields That Consumers Cannot Do Without

Investment Underground took this breather in the markets to identify five stocks worthy of your attention. These companies offer solid yields and sell products consumers can't do without. Here is the list: WalMart Stores (WMT): The venerable big-box discount retailer has a P/E of 12.5, P/B of 2.9, P/S of 0.5. The respective industry averages are 14.7, 2.9, and 0.5. From 2003 to 2007, the P/S multiples were between 0.5 and 0.9. In 2010, EPS grew by 12.1% to $4.18, after +9.14% in 2009. The company expects Q1 2011 EPS to be between $0.91 and $0.96, versus last year's EPS of $0.87. For the full year ending in January 2012, the company expects EPS to be in the range of $4.35 to $4.50. The next earnings release occurs on May 17. The dividend yield is just under 3% and there is plenty of room... more

4 High Yield Tobacco Stocks Benefiting From FDA's Recent Decision

On Friday, after tobacco companies were anxiously awaiting a report from the Food and Drug Administration, it was reported that the FDA would not ban menthol cigarettes. The news caused several of the cigarette stocks to rise. Lorillard, Inc. (LO) rose by over 10% for the day. Some investors have strong feelings against investing in cigarette stocks, but if you don't, you should consider them for their extremely high yields. Lorillard has a payout of 6.6%. The stock, which markets the Newport, Kent, True, Maverick, Old Gold, and Max brands, trades at 11.6 times forward earnings. According to WallStreetNewsNetwork.com, there are over half a dozen tobacco stocks with yields in excess of 4%.Another example is Vector Group Ltd. (VGR), a Florida based tobacco company that has many brands of... more

15 Energy Stocks for Dividend Lovers

Energy sector stocks were among the best performers in 2010. IShares S&P Global Energy (IXC) gained 22.3% during the last 12 months, beating the SPY by a large margin. We prepared a list of 15 energy companies which pay fat dividend checks regularly. All companies in this list have a market capitalization above $1 billion, P/E ratio lower than 26, and dividend yield of at least 5%. These 15 stocks returned 29.4% (including dividends) during the past 12 months, beating government bonds by a large margin. 1. TOTAL SA (ADR) (TOT): Total is one of the leading multinational companies in the oil and gas industry. TOT recently traded at $57.58 and has a 5.4% dividend yield. TOT gained 6.8% during the past 12 months. The stock has a market cap of $135 billion and P/E ratio... more

Bullish on Financials: Investors Banking on Earnings and Dividend Growth

In early October, I suggested that Financials might soon join the party, as they were still mired then in a trading range. After acknowledging the well-known risks, I pointed out several positives: Improving Charts Good Valuations Risk-taking in favor again Improving Breadth While it has been Energy getting all of the attention lately, Financials have been staging a stealth run at leadership among the remaining sectors. With the clarity on dividend payments fueling a flood of announcements this week, I thought it might make sense to take another look at the sector. So far in 2011, only 4 sectors are up. Energy, of course, is dominating, with cyclical Industrials and Consumer Discretionary showing green as well. Financials, at +1.95%, are in a solid 3rd place. After the past few years,... more

7 High Growth and High Yield Ideas for a Diversified Retirement Portfolio

A strong retirement account requires not only solid dividends but also high growth. Therefore, we investigated high-growth and high-dividend ideas from various sectors. The solidness of these stocks and funds has been confirmed in the form of a strong recovery after the global crisis. As the V-shaped recovery gains further momentum, these stocks are expected to appreciate even higher, thanks to strong economic growth. We compiled a list of seven high-growth diversified retirement ideas that pay regular dividends. In the last five years, they all experienced sustainable earnings growth rates and stable profit margins. All stocks and closed-end funds have a minimum dividend yield of 6%: A.F.P Provida SA (PVD): AFP Provida is a private pension fund administrator in Chile that operates in... more