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Sometimes I wonder whether the common practice of dividing dividend stocks into two groups - high yield and dividend-growth - doesn’t set up a false dichotomy. The implications are that high-yield stocks do not grow their dividends, and stocks that grow their dividends have low yields. Neither generalization is true.
The purpose of this article is to identify those stocks that offer both high yield and dividend growth. The qualification for “high yield” is a projected yield of 5% or more. The qualification for “dividend growth” is residence on David Fish’s most recent Dividend Champions document. The document - affectionately known as CCC - includes Champions (25 straight years of dividend growth or more), Challengers (10 years) and Contenders (5 years).
As usual, thanks go to David for allowing me to stand on his shoulders and present different perspectives of his CCCs. These stocks are ordered by yield, highest first.
Stock
Ticker
Yield %
Years of Dividend Growth
Notes
PennantPark Investment
10.2
5
Vector Group
9.1
13
Inergy
NRGY
8.9
10
Telefonica
8.9
9
ADR (Spain)
Getty Realty
8.3
11
REIT
StoneMor
8.3
7
MLP
Omega Healthcare Investors
8.2
9
REIT; Dividends in Danger?
National Presto Industries
8.1
8
Exterran
8.1
5
MLP
United Community Bancorp
8.1
5
Last increase 5/28/10
CenturyLink
7.8
37
Last increase 3/22/10; Dividends in Danger?
Suburban Propane
7.7
13
MLP
Teekay Offshore
7.5
5
MLP
Boardwalk Pipeline
7.3
6
MLP
Enbridge Energy
7.2
5
MLP
Transmontaigne
7.1
7
Crestwood Midstram
7.1
5
MLP
Pitney Bowes
6.9
29
Dividends in Danger?
TC Pipelines
TCLP
6.9
12
Natural Resource
6.9
8
MLP; Last increase 5/14/09
AmeriGas
6.9
7
MLP
Teekay LNG
6.9
7
MLP
NuStar Energy
6.8
10
MLP
Old Republic International
6.7
30
Targa Resources
6.6
5
MLP
Mercury General
6.5
24
Kinder Morgan Energy
6.5
15
MLP
Holly Energy
6.5
7
MLP
Buckeye
6.4
16
MLP
Genesis Energy
6.4
8
MLP
Plains All America Pipeline
6.3
11
MLP
Spectra Energy
6.3
5
MLP
Senior Housing Properties
6.2
7
REIT
DCP Midstream
6.2
6
MLP
National Retail Properties
6.1
22
REIT
Energy Transfer Equity
6.1
7
MLP
Reynolds American
6.0
7
Cincinnati Financial
5.9
50
AT&T
5.9
27
Universal Health Realty
5.9
22
REIT
Altria
5.8
42
Enterprise Products
5.8
14
MLP
Cheviot Financial
5.8
8
W.P. Carey
5.7
14
MLP
Sunoco Logistics
5.7
10
MLP
Urstadt Biddle Properties
5.5
17
REIT
ONEOK
5.5
6
MLP
Verizon
5.5
6
Realty Income
5.4
17
REIT; pays monthly
National Health Investors
5.4
10
REIT
Duke Energy
5.4
7
NuStar
5.4
6
MLP
Corporate Office Properties
5.3
13
REIT
Magellan Midstream
5.3
11
MLP
Astrazeneca
5.3
8
ADR (UK)
Vectren
5.2
51
Universal
5.2
40
HCP
5.2
26
REIT
Bowl America
5.1
39
Harleysville Savings
5.1
22
Last increase 8/19/09
TransAlta
5.1
5
ADR (Canada)
Legggett & Platt
5.0
39
United Bancshares
5.0
37
Last increase 1/4/10
SCANA
5.0
11
PPL
5.0
9
Westar Energy
5.0
7
Fun facts about the list above:
  • There are 66 stocks with yields of 5% or higher
  • Of these, 12 are Champions, 22 are Challengers and 32 are Contenders
  • 26 are MLPs, these are called out because of their unconventional tax treatment
  • 10 are REITs, also noted because of their special tax treatment
  • 10 have yields of 8% or higher
  • The 66 stocks here represent about 15% of the 451 stocks on the most recent CCC document
  • 3 have appeared in the “Dividends in Danger?” series
  • 5 have “overdue” increases - their last increase was over a year ago; see David Fish’s most recent article on this subject.
The usual fine print applies. Appearance on this list does not mean that these are all great stocks for dividend investors. High yielders typically have lower rates of dividend increases than other dividend-growth stocks. Dividend stocks - like any investment - should be matched to your own situation and goals. The bottom line is to do your own due diligence before investing in anything.
Disclosure: I am long TEF, KMP, T, SXL, O.
Source: The Highest Yielding Dividend Champions, Challengers and Contenders