By Roger Choudhury, Lead Editor
We ran a screen for large cap companies with big dividend yields alongside price stability. Here are the dividen kings we found:
CenturyLink (NYSE:CTL) currently yields 7.2%. The company has paid dividends since 1991. Moreover, the 52 week trading range is $14.16 - $46.87. Shares are now trading over $40. The next dividend payment should be announced in late May for payment in late June. You may view the dividend history here. The company provides telecommunications services, including local and long distance voice, wholesale local network access, high-speed Internet access, other data services and video services. It is also a Fortune 500 company. On April 1, the company and Qwest Communications today completed their merger, creating the nation's third largest telecommunications company in the US. CTL shares trade slightly above our fair value estimate, and we recommend this solid company.
Deutsche Telekom (DTEGY.PK) pays dividends on an annual basis with the next one to be paid on May 12 for investors of record at May 12, which is the date of the next shareholder meeting. The company aims to pay 0.7 euros ($1.009) in dividends annually through 2012. This is a current yield of 6.2%. In 2010, the dividend per ADR was 0.78 euros or a yield of 8.3%. For shares, the 52 week trading range is $10.57 - $16.09. It now trades just over $16. The company offers telecommunications and IT services to clients around the world. DTEGY trades below our fair value estimate, and we recommend this for income investors because this firm consistently generates enough free cash flows to pay out dividends at these levels.
France Telecom (FTE) proposed a dividend of 1.40 euros ($2.021) per share for 2010, 2011 and 2012. This is a current yield of 8.9%. Also, the 52 week trading range is $17.26 - $24.60. Shares are now trading above $22.50. The company is a France-based telecommunications operator that serves 203.4 million clients around the world. FTE shares trade below our fair value estimates, and thus offer good capital appreciation and dividend opportunities. We believe this is a safe and reasonable buy for income investors.
GlaxoSmithKline (NYSE:GSK) paid $2.04 in dividends in 2010, which would be a current yield of 5%. The latest dividend payment was made on April 7 in the amount of $0.6153. Cross your fingers, you may be in for higher dividend payments in 2011. The next dividend payment is on July 7 for investors of record on May 6. The 52 week trading range is $32.15 - $42.10, and GSK trades currently near $40.50. The company is focused on diversifying global growth and introducing new products. We believe it is worth a gamble to buy in now as these shares trade below our fair value estimates. However, we would not recommend this for pure income investors, due to significant downside.
Kinder Morgan Energy (NYSE:KMP) currently yields 6.1%. The latest quarterly dividend payment was made on February 14 in the amount of $1.13. The next one should be announced in the next 2 weeks. Here is the dividend payment history since 1992. The 52 week trading range is $57.40 - $74.69, and KMP currently trades above $74.25. Kinder Morgan (NYSE:KMI) owns the general partner interest of Kinder Morgan Energy Partners, one of the largest publicly traded pipeline limited partnerships in the US. Combined, the companies have an enterprise value of approximately $55 billion. KMP shares trade comfortably above our fair value estimate, and we place an $85 price target. We believe that the company has strong growth prospect in servicing natural gas production and different shale plays. As such, we put a buy on KMP.
Annaly Capital Management (NYSE:NLY) currently yields 15.2%. The 52 week trading range is $14.09 - $18.54, and it now trades near $17.25. The next dividend payment should be announced after the second week of June for payment at the end of June. The company is a REIT, and owns and manages a portfolio of mortgage-backed securities. We suggest this specifically for income investors because we do not expect much capital appreciation nor do we expect much on the downside.
Southern Copper (NYSE:SCCO) currently yields 6.1%. The 52 week trading range is $25.56 - $50.35. SCCO currently trades above $37. The next dividend payment should be announced in the next 2 weeks for payment in the end of May or early June. View the company’s dividend history. These shares trade above our fair value estimates, but we expect copper prices to continue to rise this year as well as for the long run. This is because of improving global and US economic conditions. We recommend investors to buy SCCO, after the next correction to lock in a higher dividend yield as well as have more upside.
Telefonica (NYSE:TEF) pays out dividends twice per year in May and November, and paid 1.30 euros ($1.878) in 2010. This would be a current yield of 7.2%. We have good news. The Board of Directors of Telefónica, at its meeting held on February 23, 2011, has proposed a dividend for the year 2011 of 1.60 euros per share ($2.311), showing an increase of 14.3% with respect to the 1.40 euros dividend for 2010. This is a current yield of 8.8%. Additionally, the company confirms its target to distribute a dividend of at least 1.75 euros per share ($2.528) for 2012. The 52 week trading range is $17.73 - $27.60, and TEF trades at $26 now. View the dividend history here. The company already enjoys a strong domestic presence, generating strong free cash flows. Its robust mobile subscriber growth in Latin America also provides significant revenue growth for the foreseeable future. TEF shares trade below our fair value estimate, and we place a price target of $29.25. This a good buy move for income investors.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.