4 Dividend Stocks Showing You the Money

Dividend checks continue to get fatter in Corporate America, as more companies jack up their distribution rates. Readers of the Income Investor newsletter can certainly appreciate that kind of thinking. Let's take a closer look at some of the companies that inched their payouts higher this past week.... more

EXG and ETY: Two Good Buys Ahead of Ex-Dividend Date

Eaton Vance's Tax-Managed Global Diversified Equity Income fund (EXG) and Tax-Managed Diversified Equity Income Fund (ETY) both go ex-dividend on Wednesday, February 16th. I believe this presents an opportunity for investors to get in ahead of the ex-dividend date on two 10%+ yield Closed-End Funds (CEFs) that haven't been this attractive to investors since the spring of 2009 when most Closed-End Funds were recovering off their market lows. Note: An investor would need to purchase the fund(s) by the market close on Tuesday, February 15th to be entitled to the dividend. EXG and ETY have had a rough go of it recently, some of which is deserved, and some of which is based on misinterpretation of the source of these funds' high distributions and why these funds' have lagged in performance. ... more

How Equities Can Help Juice Your Portfolio's Yield

Portfolio yields are under pressure due to the worldwide flight to safety over the last few years, making conservative and income growth portfolios more difficult to manage. While bond investments made a few years ago have done historically well, new investments have greater principal risk with low historic yields. Some advisors have simply shifted from bonds into stocks, but for those truly in conservative and income growth risk classes, adding equities will increase the portfolio’s standard deviation, a common measure of risk, reducing the portfolio’s ability to soften the “blow” from the next crisis or even modern day volatility. Investors should never chase yield, meaning one should not simply buy the highest yielding product with no concern about who is paying the interest.... more

Hershey's: Strong Guidance and a Dividend Increase

Today is Valentine’s Day in America and if there is anything more symbolic of the holiday aside from flowers, it’s chocolate. Americans love chocolate and have built entire holidays around it to justify its exchange, except in the summer - consumers seem to be very reluctant to buy chocolate when it’s hot out - but I digress. Hershey (HSY) is the pinnacle of confectionaries, and aside from announcing an increase in their dividend of 7.8%, they have provided some strong guidance for 2011.... more

Dividend Investing: Tompkins Financial Nearing Low P/B

Tompkins Financial (TMP) is one of those rare financial stocks that has maintained and increased its dividend through the financial crisis. Not only that, but it's also grown earnings for 36 straight years. Let that sink in for a minute before we go on. Only one company has done it longer, Wal-Mart (WMT). Tompkins Financial is now trading near its price to book lows going back at least ten years. Its book value has grown each one of those years as well, with last year jumping 10% YoY. Throw in a 3.4% dividend yield and there’s a lot to like here. Tompkins Financial is a $452 million bank and trust company founded in 1836. It has 15 branches in New York. As you can imagine from its results, it stays away from sub-prime loans. It operates with five subsidiaries with three community banks:... more

Dividend Stock Lowe's: Good Valuation, But Low Yield

Linked here is a detailed quantitative analysis of Lowe’s Companies, Inc. (LOW). Below are some highlights from the above linked analysis: Company Description: Lowe’s Companies, Inc. sells retail building materials and supplies, lumber, hardware and appliances through more than 1,700 stores in the U.S. and Canada. Fair Value: In calculating fair value, I consider the NPV [net present value] MMA [money market account] Differential Fair Value along with these four calculations of fair value, see page 2 of the linked PDF for a detailed description: Avg. High Yield Price 20-Year DCF Price Avg. P/E Price Graham Number LOW is trading at a discount to only 1.) above. The stock is trading at a 7.4% discount to its calculated fair value of $26.68. LOW... more

Using Covered Calls to Achieve a 10% Yield on Apple

You own Apple (AAPL). Good for you. Great company. Insanely great stock. Sadly, the dividend yield is 0%. Or is it? Here's how to generate pretty much any reasonable dividend yield you want with AAPL and still leave yourself some upside potential: With AAPL closing at $356.85 Friday, this table shows how big the annual dividend would need to be to attain various yield levels:... more

Dividend Stocks Down Under: Two Telecom Companies to Consider

The telecom sector has stood out as one of the few sectors that maintained its high dividend yields through the financial crisis. Indeed, both wireless and land-line dividend paying stocks in this sector have continued to reward investors with high dividend payouts, even as other sectors (notably, financials) had to eliminate or slash their payouts: (Data Source: Standard & Poor's) As the above table illustrates, the financial sector slashed its dividends over 68%, and several sectors' current dividend yields fall below the current S&P average dividend yield of 1.81%. An interesting development (hopefully an ongoing trend) is that the tech and energy sectors actually increased their average dividend payouts by over 32% and 42% respectively. If you follow the logic of diversifying your... more

A Primer on Valuation: 8 Examples of How Earnings Growth Drives Dividends and Returns

Valuation Based on Fundamentals In order to prudently answer the question of when to buy a stock, an investor first needs to know the value of the company behind the stock.... more

Healthcare Stocks: The Right Investments Pay Dividends

The health care industry seems to have a better grasp of what President Obama’s reforms mean for business. Now executives can calculate their next steps, and investors are pushing up prices for shares of health care related stocks. For income investors seeking dividends, health care stocks are often attractive because of decent yields - but also because they are resilient in flat, or downward trending, markets. Health care is typically a defensive sector, and if stock prices do fall higher yields usually mean shares get snapped up quickly - thus putting a higher floor under the stocks.... more