22 Dividend Stocks with Good Fundamentals 41 comments
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If you believe that we've already seen the bottom of the market and it has nowhere to go but up (or sideways at the worst), then you might be thinking that now would be a good time to start lining your larder with some high dividend-paying stocks. Why would you want to do this? For the following reasons:
1. Dividends account for most of the wealth accumulated in the stock market. And don't believe that dividend stocks are for income generation only—au contraire mon ami! In fact, if you're a young person just beginning to save for retirement (which you should be doing!), adding some high-quality dividend-paying stocks to your portfolio is one of the wisest things you can do. Especially if you elect to re-invest your dividends into buying shares of your stock. This is a form of compounding, one of the most powerful methods of generating long-term wealth.
2. Buying dividend-paying stocks at depressed prices boosts your dividend yield because of the low cost basis.
3. Buying dividend stocks at depressed prices also gives you the added benefit of price appreciation.
To find stocks that have high dividends and with good fundamentals, I ran a stock screen on the MSN Money Central Stock Screener (which is free to all and with whom I have no affiliation) according to the following criteria:
* Average daily volume greater than 100,000 shares. This ensures liquidity and a narrower bid/ask spread.
* Last price greater than $2. In bullish environments, this criterion could be raised, but I chose this value since many issues are so undervalued.
* Current dividend yield = As high as possible
* Stock Scouter rating greater than or equal to 7. This is an attempt to capture the higher quality issues.
I screened the top 50 stocks according to the bullish strength in their charts. (I know this is subjective but judging from Monday's action, this group is up on average over 3.5% as of this writing.) The following twenty-two stocks are my top picks. The stocks highlighted in rose are those that broke out Monday.
The table is divided into three groups: the top seventeen stocks are drawn from the energy, financial, real-estate, and utility sectors—exactly where you'd expect to find the high-dividend payers. The next three are from other sectors that are trending up. The last two are currently in a holding pattern after an initial run up. [Click on the chart to enlarge.]
So, how should you play these?
I know you've heard that stocks that pay a high dividend should be avoided because there's usually a reason for the high payments. But in many of these cases, I think that the reason is just that they've been way oversold. Some of these stocks are as much as 75% off their highs. However, that doesn't mean you should neglect your due diligence!
I grouped the table according to sector because it's important to diversify your holdings. You don't want your nest eggs to all come from the same basket as doing so increases the risk to your portfolio. Remember, it's not only profits that count, but also the amount of risk that goes into getting that return.
If you don't like my picks, try modifying the screening parameters to reflect your investment taste, but don't waste too much time. I think that now is THE time to begin stocking up on dividend-paying stocks. Go get 'em!
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On May 06 04:16 PM RetiredAt45 wrote:
> Hey OldGuy67, do you want to reveal your dividend portfolio to the
> dividend-interested among us?
>
> I have found the work by DividendsForLife and DividendGrowthInvestor
> to be VERY educational.
>
> By the way, authors of DVL and DGI, many thanks for your insights
> on dividend stock investing. Much appreciated
>
> Disclosure: Retired at 45, and have found the secret to making a
> small fortune in this recesso-depresso-rama, which IS (drum roll
> please): start with a big fortune, and put it under money management
> that is not so interested in technicals analysis. And while I *am*
> currently holding an assortment of ETFs in this market up-leg, I
> am most definitely interested in building a list of dividend candidate
> companies for accumulation during what might be another martket down-leg.
>
> -- Sincerely,
> Daniel
a few I am holding in my discretionary portfolio names and yields of VZ at 6.1%, BP at 7.49% COP at 4.38%, Nat at 14.45% ( after being cut in half) , CAT at 4.26% KMP at 8.93%,, ETE at 7.94%. , MKC at 3.19%, HNZ at 4.71%
CPB at 3.79%. I know I am heavy energy but these are carriers and have no anchor to anything but moving product. I have one real speculator here in RGM at 102.98%. yes you saw it right .. crazy yielder but at a buck plus 70 that is how much I have to loose.
go dividends!
On May 06 11:09 PM Pessimistic Optimist wrote:
> I too believe in dividends after homework is completed.. but it really
> never stops.
> a few I am holding in my discretionary portfolio names and yields
> of VZ at 6.1%, BP at 7.49% COP at 4.38%, Nat at 14.45% ( after being
> cut in half) , CAT at 4.26% KMP at 8.93%,, ETE at 7.94%. , MKC at
> 3.19%, HNZ at 4.71%
> CPB at 3.79%. I know I am heavy energy but these are carriers and
> have no anchor to anything but moving product. I have one real speculator
> here in RGM at 102.98%. yes you saw it right .. crazy yielder but
> at a buck plus 70 that is how much I have to loose.
> go dividends!
I also was buying EEP, TPP, EPD, TCLP, and KMP.
Forget the price 1.5 years ago. I was buying these 10-15 years ago. EPD has returned 420% for the last 10 years. S&P is negative over the same time frame. The fall drop in MLPs was overdone and was directly the result of Lehman forced sales and Hedge forced sales. This is opportunity. Too bad many bears are blinded in their exuberence to understand that this is/was a once in a lifetime opportunity.
On May 07 10:01 AM Dean M wrote:
> I wouldn't play these at all now. It seems as though they haven't
> participated much in the current rally but have sunk with the plummeting
> markets over the past 1.5 years. Ie all downside, little upside in
> a market that always seems to provide another shoe to drop.
hts....nly...hfs....nymt.
found hts in barrons nov '08 by fleming meeks in mktwatch section.
WKMA
On May 07 11:17 AM Smackdown wrote:
> Dean, the MLP picks in the list have all outperformed by a huge margin.
> ETP, NS, PAA. Look at their track records. DEP and DPM (started
> buying in fall and not when it was high) have also done incredible
> on YTD basis and since the fall lows. I backed up the truck and
> margined and added all of these in Nov/Dec. I am up about 150%
> from the market lows. 60% YTD. I am up about 15% annualized
> for the last two years, fully invested in the market, no shorts.
> And I get enough cash flow I could retire. Not exactly all downside
> with little upside. No?
>
> I also was buying EEP, TPP, EPD, TCLP, and KMP.
>
> Forget the price 1.5 years ago. I was buying these 10-15 years ago.
> EPD has returned 420% for the last 10 years. S&P is negative
> over the same time frame. The fall drop in MLPs was overdone
> and was directly the result of Lehman forced sales and Hedge forced
> sales. This is opportunity. Too bad many bears are blinded
> in their exuberence to understand that this is/was a once in a lifetime
> opportunity.
On May 07 05:17 PM Living4Dividends wrote:
> Some MLPs have high debt/equity ratios. When interest rates rise
> - watch out !
THANKS
On May 05 01:12 PM hwood007 wrote:
> I have 12 different stocks in a DRIP fund, where I invest $100 each
> month to each stock. I first research looking for good companies
> to replace any that I may have sold. I also look at the fees charged
> by the agent banks, anything over 0% is not considered. Then I look
> at the size of the dividend and also the payout raito of the dividend.
> I do not just pick the 12 highest dividends I can find. I would not
> buy any of those on her list at this time, but that is just me..
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High dividend stocks are risky at this point, because of the huge slash that has been given to many company's earnings. If a company has a high yielding dividend with a diminishing stock price, most likely that dividend will be cut, shedding more demand for the stock.
my reply to this is yes, if your looking only at the dividend , that can add u to added risk that the dividend could be cut. but there are ways to reduce this risk. you look for companies first, that have consistently paid out over at least a 10 year period. next you want companies with products or services in high demand (even in weak economies) with growing profit margins. after that, your looking for companies with a moat so strong they can ask higher prices (this goes to increasing profit margins). next, look for companies with management that is aligned with stock holders,who will be looking to raise or at least maintain dividend payouts. last,but not least, be looking for companies with plenty of insider ownership. if they have a large stake in the company(i.e. lots of stock) you can bet their going to be doing everything they can to keep that company growing to grow the value of the stock.
so due diligence ,is key . don't buy for high dividends only.