The 10 Highest-Rated Dividend Champions

I write extensively on the U.S. Dividend Champion list maintained and updated by DRIP Investing. The list is comprised of stocks which have increased their dividend payout for at least 25 consecutive years. My initial Dividend Champion articles on Scott's Investments focused on one or two company metrics, such as payout ratio, yield, or past performance. However, I now regularly combine multiple metrics to create an overall quantitative ranking for stocks in the list. This article uses a simple quantitative system which combines multiple metrics to give an "overall" rank of the stocks within the March U.S. Dividend Champion list. This ranking system is the most comprehensive yet, combining Dividend Yield, Payout Ratio, Forward Price/Earnings, Return on Equity, Total Debt/Equity, and price... more

Two CEFs Offering Tax Equivalent Yields of 13%

With rates still near record lows, it's hard to find a reasonably safe investment to earn an attractive return. However, there are some interesting places to get paid high yields if you look at closed end bond funds. Both of the two funds I found invest most of their portfolios in municipal bonds which are exempt from federal taxes. These funds trade at a premium to net asset value which means you should try to buy on dips. Some investors are concerned that with all the budget deficits, some municipalities will default. Meredith Whitney recently predicted that there would be 50 to 100 municipal bonds defaulting in 2011 totaling hundreds of billions of dollars. However, Alexandra Lebenthal, President of Lebenthal & Co., and a well known muni bond expert does not agree with that assessment.... more

Largest Fund Manager's Top 10 Dividend Stocks Yielding a Healthy 4.8%

The American Funds mutual fund family continues to be one of the dominant fund managers despite some recent performance issues. It claims 7 of the world's largest 15 mutual funds with those funds holding over $600 billion in assets. Because American Funds now updates holdings every month, it is now possible for investors to follow and consider the funds' top investments for their own portfolio. In addition we can filter and focus on the highest yielding positions. We are also going to track these picks over time to see if investors can benefit from tracking the largest manager. Here are the top 10 holdings that each yield over 3%, aggregated across six of their largest funds, as of 2/28/2011. Top 10 Holdings Aggregated Across 6 Funds, Yielding > 3% click to enlargeAs expected many of... more

Buffett's Buy, One New Dividend, and Spousonomics

Here are five questions we'll answer on this weekend's Motley Fool Money radio show: 1. With the evolving crisis in Japan and rising tensions in the Middle East, what are the economic implications for investors?... more

Say Hello to Cisco's Newborn

Assuming that the $0.06 payout per share stays stable over the first year, we're looking at a dividend yield of about 1.4% at today's share price. With about 5.5 billion shares outstanding, this amounts to an annual cost of about $1.3 billion or just under 15% of Cisco's free cash flow in 2010. Considering that the company already spent some $9 billion over the last 12 months to buy back its own shares, Cisco seems quite committed to returning value to shareholders. And before you start complaining about the company's stock-based compensation programs eviscerating the value of those buybacks, you should also know that Cisco issued $3 billion in new shares over the same period. Most of the buybacks really do achieve something more than just staying afloat.... more

8 Safe Dividend Stocks With Excellent Growth Rates

In our recent study we have shown that the average return of high dividend yielding stocks was 13.04% between 1927 and 2009. The dividend stocks beat the overall market by an average of 1.36% per year during this period. We prepared a list of eight large scale companies with high growth rates and pay fat dividend checks regularly. All companies in this list have a market capitalization above $2 billion, five years EPS growth rate higher than 20%, and dividend yield of at least 4%. These eight stocks returned 19.22% (including dividends) during the past 12 months, beating the government bonds by a large margin. 1. AmeriGas Partners, LP (APU): AmeriGas is the only major propane company in the U.S. APU recently traded at $44.83 and has a 6.29% dividend yield. The stock returned... more

7 Companies That Pay Dividends but Are Burdened With High Debt

Companies with high debt loads usually shouldn’t be paying dividends. That money could be better used to pay off debt. By paying dividends, the company is essentially borrowing money to pay its shareholders and sometimes at high rates of 6% or more. Let Tasty Baking (TSTY) be a cautionary tale. The company continually borrowed to pay dividends, ignored its mounting debt problem, and now can’t make its principle payments and is most likely headed toward bankruptcy. If you can find the next TSTY and short it before the “debt hits the fan,” you can make a hefty profit. Check out my article on TSTY here. These six other companies also have large amounts of debt yet still pay dividends. Exterran Partners (EXLP): Natural gas compression services and equipment industry. Market Cap:... more

Cisco to Pay First-Ever Dividend

Few stocks have lost as much luster as Cisco (CSCO) has over the past few years. I’ve been continuously disgusted by how much money the company has wasted on stock buybacks. Here’s a post from August 2005 where I predicted that Cisco would start paying a dividend: I’m going to make a prediction. No, not like my other lousy predictions. This time, I’m nearly serious. I predict that Cisco will start paying a cash dividend. Really, it makes perfect sense. The company generates gobs of cash, but they waste it on buying their own stock (just like everyone else who buys Cisco’s stock).... more

Complex Events Lift Yields At The End Of Torrid Week

Bond prices have swung between gains and losses overnight as a complex of financial and geopolitical factors tripped up traders around the globe. Asian markets welcomed the success of a central bankers? agreement to tame the rampant yen. Speculators had almost dared for intervention by pushing the Japanese unit to its highest ever in the aftermath of the earthquake. The relief from a lower yen stoked a recovery in sentiment and a rebound for stocks. Bond prices suffered from a drop in the perceived need to hold government paper following. However, a unanimous United Nations vote to use air-strikes against Libya further jolted bond-buyers into action. Eurodollar futures But Libya's leader suddenly woke up to the international response and offered peace talks, which saw oil prices... more

Dividend Scan: CSCO, APD, AKR, GM, INTC, MSFT, JAH, TTT

Amid the positive movement of the US market following cease-fire in Libya, several companies declared their future dividend plans. Some notable dividend payers are discussed here. Cisco Systems Inc (Nasdaq: CSCO) added 2.03 percent or $0.34 to $17.34 as it declared its first quarterly dividend of 6 cents per share. The dividend is payable on April 30, 2011 to shareholders of record on March 31, 2011. Air Products & Chemicals Inc (NYSE: APD) announced a dividend of 58 cents, up from its previous dividend of 49 cents per share. APD gained 2.04 percent or $1.77 to $88.02. Acadia Realty Trust (NYSE: AKR) declared a cash dividend of 16 cents per share, payable on April 15, 2011 to shareholders of record on March 31, 2011. AKR added 1.56 percent or $0.29 to $18.93 after the... more