5 Must-Own Dividend Stocks To Consider In 2012

Includes: CSCO, F, GE, KMI, T
by: Dividend Kings

New Years resolutions come in all sizes and forms: to stop smoking, lose weight, go back to school and start exercising are some of the typical promises that people make as the clock strikes midnight and the ball drops. While self-improvement is a great promise to make, portfolio improvement is another excellent change to consider. Finding profitable holdings can help turn things around, and Kinder Morgan Inc (NYSE:KMI), Ford Motor Company (NYSE:F), AT&T Inc (NYSE:T), Cisco Systems Inc (NASDAQ:CSCO) and General Electric Company (NYSE:GE) all have that potential. These 5 must-own stocks for 2012 are poised to help start any investor’s change for the coming year.

While they represent different business sectors, (energy for KMI, automotive for Ford, communications and electronics for AT&T and CSCO and consumer products and services for GE) the companies have aspects in their investment fundamentals that will likely drive them forward for the next year. Finding solid performers like these can be an outstanding way to improve any portfolio.

Kinder Morgan Inc

Kinder Morgan is an American oil company that has built its reputation on controlling costs and rewarding its investors, so naturally it tends to garner a great deal of market attention. Carrying a hefty market cap of 22.17 billion, the company has a corporate structure that is unique enough to draw institutional owners, and KMI business decisions set it up for continued success.

For 2011, KMI posted a dividend of $1.20 and a yield of 4.10%. This year, analysts expect the company to move past its 52-week high of 32.14 with a 1-year target of 32.50. The company also sports an impressive PEG of 69.45, making it a prime acquisition to consider.

Ford Motor Company

Long considered one of the premier blue-chip stocks, Ford has come out of the economic crisis with a roar. Battling against General Motors (NYSE:GM) and Toyota Motor Corp (NYSE:TM), the company has reinvented itself as one of the top car producers in the world. Powering to a hefty 10.60% quarterly revenue growth, the company has outperformed both GM (7.8%) and a sliding Toyota. (-4.8%)

There are a number of reasons to believe Ford will continue its strong push in 2012. Building vehicles that the car-buying company wants, Ford's stock has appeared to find the bottom of its five-year valuation as its $10.50 current price hovers near its 52-week low of $9.05. The 1-year target for the company is $16.31, suggesting a climb of over 50%. The company also has a strong PEG of 3.77, making it another very good candidate.

AT&T Inc

Traditionally one of the Dogs of the Dow, AT&T continues to impress from its position as a global leader in the telecommunications industry. Well-managed, the company has a market cap of 178.14 billion and carries a relatively low debt to value of just over 29%.

For 2012, many analysts are touting that AT&T is a strong buy. Currently sitting around $30 per share, it is primed to break through its 52-week high of $31.94. The company’s future looks bright, thanks to its solid $1.76 dividend, a yield of 5.90% and its PEG of 7.74 allowing it to compete well with the likes of Verizon Communications Inc (NYSE:VZ), with a $2.00 dividend, 5.20% yield and PEG of 6.42, and Sprint Nextel Corp. (NYSE:S), with no dividend, yield or PEG)

Cisco Systems Inc

One of the top electronics companies in the world, Cisco is another of Wall Street’s strong performers. A consistent investment in both good and bad times, this is potentially a great addition to help balance an investment portfolio. Featuring a positive dividend, very impressive PEG and a stock price that is expected to rise, the company is poised to do battle with competitors like Hewlett-Packard Company (NYSE:HPQ) and Alcatel-Lucent SA. (ALU)

Among these firms, Cisco is the only one to record a positive year-to-year quarterly revenue growth. (4.70% for CSCO, -6.80% for ALU and -3.50% for HPQ) The company also boasts a 1-year target of $21.20 (an increase of nearly 16% over its current $18.00 share price) and a PEG of 13.5. Alcatel’s PEG stands at 15.8 and Hewlett-Packard has a PEG of 5.35. With positive growth in 2011 and a forecast for a sustained climb, this is a must-own stock for 2012.

General Electric Company

Another blue-chipper that historically lands among the Dogs, General Electric is once again found on the same list, joining the likes of AT&T, Merck (NYSE:MRK) and DuPont (NYSE:DD). Competing with the likes of Citigroup Inc (NYSE:C) and Siemens AG (SI), GE has ridden its traditionally solid business model to maintain its position as one of the better positions to hold. The company rode the strength of its financial arm, GE Capital, to weather the tough times of the recent economic crisis.

Many investors are high on GE, especially now that the company is reinstating the dividend from GE Capital to the parent company in the upcoming year. The company has a 1-year target estimate of nearly $21, a 15% increase over current price of just under $18 per share. The company’s forecast looks good, as it records a PEG of 10.56, while Siemens has a PEG of 1.15 and Citigroup sits at 1.89.

Finding the Must-own Stocks for the Coming Year

While there will be a number of solid investments available in 2012, these five must-own stocks offer an excellent combination of growth and dividend. Each company is faring very well against its competition and has a strong PEG to suggest continued growth. This is a good year for investors to skip the New Years resolutions they won’t keep and make one that will likely turn a profit as they take positions in these five must-own stocks for 2012.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.