A Disciplined Approach to Weighting High-Dividend Yield Stocks

The interest in the stocks of companies paying higher than average dividends has been in a rapid upswing over the past couple of years as it has become readily apparent that short-term interest rates are not rising any time soon. Ben Bernanke has all but promised us years of low short-term rates. With money market funds paying less than 0.1% on average, many investors are turning to high-dividend paying stocks to supplement their income.Once the decision has been made as to which stocks will make up an investor’s high-dividend portfolio, there is still the question of how these stocks will be weighted. Some investors and financial advisors will use the tired and increasingly out of favor method of weighting by market capitalization. There is also the idea of equally weighting each... more

Electric Utilities Offer Above Average Yield Growth Potential

A portion of our portfolios should be in selections made with income as the primary objective. A good rule of thumb is that a minimum of 15% of portfolio value should be categorized as income oriented opportunities, based on the investor’s age and objectives. Many younger investors are so focused on capital gains potential that they bypass the importance of the more conservative nature of income selections. One approach to income investing is to find dividend paying stocks that offer both higher yield and growth potential. A good benchmark for comparison of income opportunities is the current long Treasury yield, with a minimum of 4.4% overall yield goal. Unlike Treasuries, with their fixed rate coupon rate until maturity (except TIPS), many dividend paying companies raise their... more

Harleysville Group Inc. Dividend Stock Analysis

This article originally appeared on The DIV-Net January 10, 2011.Linked here is a detailed quantitative analysis of Harleysville Group Inc. (HGIC). Below are some highlights from the above linked analysis:... more

Dividend Stocks: A Better Alternative to Bonds

My previous article explained my negative outlook for the bond market, and also promised an alternative to fixed income. As I'm sure you have guessed, the answer is dividend stocks. The proper approach can provide the reliable income associated with bonds, and also the unlimited upside characteristic of equities. This article will delve into the process for choosing suitable equities to replace and/or augment bonds in your portfolio. According to Robert Shiller, the current dividend yield of the S&P 500 is 1.74%. Now I know you're saying, "That's only half the yield on the 10-year T-Note." That's true, but consider the growth rate of dividend payouts for several blue chip firms: CAT, MCD, and PG.... more

Five High Yield Stocks Raising Dividends

Dividend investors typically face a tradeoff between dividend yield and dividend growth. Companies with high yields often keep distributions unchanged or do not increase them at a rate that would compensate for the eroding power of inflation. Because of the higher yields, retirees tend to prefer the higher yield today. The companies with low yields on the other hand typically can afford to grow distributions much faster than the rate of inflation. Younger investors typically invest in these dividend growth stocks, in order to generate a sufficient yield on cost down the road.The dividend growth companies that raised distributions last week were no exception:... more

Reverse Decoupling: U.S. Dividend ETFs Outperform Their International Counterparts

The world is entering into a divergent environment: recently, U.S. dividend ETFs have outperformed their international developed country and emerging market counterparts. There has been a consistent pattern that U.S. equities have been strong while stocks in other parts of the world have exhibited lackluster performance.The performance of both equity and fixed income markets largely reflects the underlying economic development: the U.S. economy, while still being bogged down by its debt and high unemployment numbers, has recovered slowly. Meanwhile, the eurozone economy is ladened with peripheral countries' debts and fiscal difficulties. Emerging markets, with global trade imbalance being adjusted through currency manipulation and trade restriction, have to deal with rising inflation and... more

Two Top Yielding Japan Stocks

Economists have been saying for the last few years that Japan has been stagnating, and many of those economists believe that the United States is turning into another Japan. But maybe, just maybe, there may be a turn-around in the 'Land of the Rising Sun'. After all, the iShares MSCI Japan Index (EWJ) is up 20.8% since July 1 of last year.Japan has the third largest economy in the world based on gross domestic product for purchasing power parity and nominal GDP. Three quarters of the GDP comes from the service sector. The country's unemployment rate is 5.1%. The Tokyo Stock Exchange is the largest exchange in the world outside of the United States. There are over 15 different Japanese companies that trade on American stock exchanges, according to WallStreetNewsNetwork.com.... more

Is Intel Destined to Remain Only a Dividend Play?

I have been on the Intel (INTC) bandwagon for quite some time now. I felt that the stock had the potential to make money for patient investors. Intel’s management is doing a great job of guiding the company. Intel was one of the few technology company that emerged from the recession even stronger than before.So, is now the time to buy Intel?... more

Teva Pharmaceutical Has It All: Value, Growth and Yield

Headquartered in Israel, Teva (TEVA) is the world's largest generic drug maker, which markets over 1200 molecules in over 60 countries throughout the world. In addition to their generic portfolio, Teva also possesses a strong branded portfolio led by Copaxone, the world's leading injectable therapy for multiple sclerosis. Teva generates high levels of cash flow, has a very strong debt to equity ratio of 18% and therefore, has the scale and financial muscle to be more flexible and aggressive with their business model than most of their peers. Strong History of Operating Excellence The following historical F.A.S.T. Graph plots Teva’s earnings growth since calendar year 2000. Earnings growth in excess of 28% per annum was far in excess of any of its peers. The only blemishes on this... more

Best Dividend Stock of the Last 50 Years: Leggett & Platt

There aren't many companies that can say they've paid dividends every year for the past four decades. Fewer still are those that have raised their dividends in every single one of those years.... more