As a dividend investor my goal is to protect my capital while earning a high dividend yield. To stay protected I make sure to diversify my investments. On our dividend blog we cover multiple industries to help investors develop a well diversified portfolio. Staying diversified keeps you from being over exposed to any single stock or industry. When your portfolio is built for yield and dividend growth it’s easy to stay diversified.
We’ve highlighted our favorite dividend stocks from 6 different industries. Each of these stocks ranks very highly on our dividend industry list due to their high dividend growth records, low payout ratios and high dividend yields. Each stock listed here has a 3 year income growth rate of 8% or more.
Hickory Tech Corporation - HTCO
Hickory Tech Corporation is both a telecom company and a communication solution provider for both large and small businesses. Hickory provides telecom services to both residential and business customers. Their services include internet, television and voice.
HTCO has a dividend yield of 5.1% and a payout ratio of 74%. Their 3 year dividend growth rate is 3.6% and they have raised their dividend for 3 consecutive years.
Dividend Score: 96/100 due to their high dividend yield and solid dividend growth. A lower payout ratio and higher dividend growth rate would improve their score but those two things will only come if they can continue to grow their net income.
Abbott Laboratories - ABT
Abbot Laboratories operates in 4 different healthcare segments which include pharmaceutical, diagnostics, nutrition and vascular products. Recently Valuentum made a case for ABT to trade at $70 per share which is over a 30% increase from where it trades today.
ABT has a dividend yield of 3.4% and a payout ratio of 65%. Their 5 year dividend growth rate is 10.1% and they have been raising their dividend for 38 consecutive years.
Dividend Score: 99/100 due to their solid yield, high dividend growth rate and a 38 year history of consecutive dividend increases. The only things keeping this stock from receiving our highest rating is their payout ratio (top scores go to stocks with payout ratios under 60) and their dividend yield.
Community Bank System - CBU
Community Bank System is a holding company that owns multiple subsidiaries. These subsidiaries include a benefit plan closeout service, a bank, realty company and trusts.
CBU has a dividend yield of 3.8% and a payout ratio of 49%. Their 5 year dividend growth rate is 4.9%. CBU has raised their dividend for 18 consecutive years.
Dividend Score: 97/100 due to their solid dividend yield, dividend history and low payout ratio. We'd like to see their dividend growth rate move above 5% but 4.9% is close enough.
Avista Corporation - AVA
Avista Corporation is a utility and energy management company that generates, transmits and distributes electricity and natural gas. They own 76% of Advantage IQ which provides expense management and energy efficiency services.
AVA has a dividend yield of 4.3% and a payout ratio of 61%. Their 5 year dividend growth rate is 13.9% and they have raised their dividend for the last 8 years.
Dividend Score: 100/100 due to their perfect dividend fundamentals. Avista does everything right with their high dividend yield, low payout ratio, very high dividend growth rate and commitment to increasing their dividend. In addition to their solid fundamentals AVA stock has a one year return of 11.7%
Kraft - KFT
Industry: Consumer Goods
Kraft adds international exposure to your portfolio through their global manufacturing of food and beverage products. Their products are sold in approximately 170 countries through their three segments which include developing markets, Europe and North America. You have probably consumed a Kraft product at some point in your life.
KFT has a dividend yield of 3.3% and a payout ratio of 63%. Their 5 year dividend growth rate is 4.3% but they have not increased their dividend since 2008.
Dividend Score: 93/100 due to it's solid yield and low payout ratio. Kraft needs to raise their dividend in 2012 to improve their rating with us.
Maxim Integrated Products - MXIM
Industry: Tech - Semiconductors
Maxim Integrated Products designs and manufactures analog circuits for a large number of international customers. Their products serve for markets which include industrial, communications, computing and consumer.
MXIM has a dividend yield of 3.1% and a payout ratio of 51%. Their 5 year dividend growth rate is 10.2% and they have raised the dividend for 8 consecutive years.
Dividend Score: 96/100 for their decent yield, low payout ratio and 8 years of consecutive dividend increases. Their dividend growth rate has slumped off in the last few years. We'd like to see improvement with regards to dividend growth to help raise the dividend yield. MXIM has a one year return of 20.9%.