With Hanukkah only a couple of months away, I look forward to profitable presents from dividend yielding companies. Here are 5 dividend stocks that could make your holiday a little brighter:
General Electric (GE) is touting a solid $0.60 per share dividend (3.94%) to those who believe in Jack Welch's protege and current CEO, Jeff Immelt. The company’s diversified portfolio of products keeps a solid balance when one industry moves and the others do not. Coming from this month’s double bottom, GE looks to move back onto the positive growth track as the company projects to double its China revenue to $10 billion by 2014.
With the market still in a conundrum, GE and 3M (MMM) are the dividend yielding blue chips in which investors can confide. Although GE slashed its dividend during the economic recession, the giant is back on its feet and payout is back up to $0.60 per share. With a solid price-to-earnings-to-growth (PEG) ratio at 0.85, the growth in China should help the company surge through the current economic market and potentially lead to a higher dividend yield for investors’ delight.
AT&T (T) is holding its own despite Apple (AAPL) moving its iPhone to other carriers such as Verizon (VZ). The two companies flaunt the highest dividend yields in the Dow 30 at 6.00% and 5.42% respectively. The telecommunications industry continues its growth track as well as smartphones, tablets, and other devices connect to the networks. Investors around the board are confident in T with the short float at 1.09% and VZ at 1.87%.
On top of it all, the two companies boast gross margins in excess of 50% as well as strong return on equity ratios over 15%. T is also a value considering the price-to-earnings ratio of 8.31 versus an industry average of 14.10. Maybe pick up a little of both stock for some extra holiday cheer.
Annaly Capital Management (NLY), sports one of the highest dividend yields, and rightly so. Yielding 14.38%, this real estate investment trust (REIT) has a profit margin of 63%. At $2.40 dividend per share, this company returns the favor for investors taking the risk on the real estate market. The company has a low price-to-earnings ratio of 5.84 and a low forward price-to-earnings ratio of 6.52, but the debt–to-equity ratio of 5.69 and a PEG ratio of 7.78 leaves most investors wary of any shifts in the real estate or financial industries.
Any movement from Ben Bernanke and the Federal Reserve that does not favor the mortgage industry may squeeze NLY a little too tight with its mortgage backed securities. The word on the street is that the Fed may purchase long term treasuries, which would in turn tighten the spread NLY makes on the difference of short-term and long-term securities. Despite all of the attractive factors of growth and value, the company’s poor debt management and what “Uncle Ben” may commit to, you may want to just hold out, or go all in.
Finally in today’s analysis of dividend stocks, Alcoa (AA) pays you about the same amount as your bank, with a dividend yield at 1.20%. However, one thing AA is doing that your bank is probably not, and that is innovating already tried and true products. A recent Alcoa press release from September 23 states that the company has “launched a new lightweight aluminum cement hauler for the Russian market using Alcoa’s new advanced aluminum sheet alloy 1565M.”
This saves cement haulers from exorbitant fuel rates and transport costs. With the ever rising costs of fuel, more distributors and construction companies may convert their steel products to the lighter yet efficient aluminum produced by AA. The driving factor of AA’s growth is the 26% quarter over quarter sales growth; this coupled with the low forward price-to-earnings ratio of 7.44 and PEG ratio of 0.17, the sustainability is better than your bank. These may make AA a solid pick for this season’s payout.