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In light of low bond yields and the threat of interest rate risk, investing in dividends companies is attractive because of higher present yields and the opportunity for dividend growth. Income investors searching for growing dividends could benefit by adding retail stores and restaurants to their portfolios.

It seems counter-intuitive to add consumer-facing stocks whose storefronts are found in malls and stripmalls. Macro, qualitative arguments about an aging, more frugal U.S. population and the need for consumer deleveraging do not bode well for these industries. Regardless, do not throw the baby out with the bathwater. Even if you believe these macro trends are a destiny of industry headwinds, quantitative screens allow investors to find good stocks in bad industries.

The following dividend paying stocks were screened for their long term performance. Each of the following companies pays a dividend in excess of the 10-year treasury yield and had over a 5% average annual increase in dividend payments over the past 10 years. Thus, each of these dividend stocks pays more than treasuries and has a long-term trend of dividend growth, which is better than the static interest payments on fixed-rate treasuries.

Price multiples, dividend histories, and return on equity histories are provided below:

Cato Corp. (CATO) recently traded at $25.88 per share. At this price level, the stock has a 3.6% dividend yield. For 10 out of the past 10 fiscal years, a share of CATO paid a total of $5.40 in dividends. Of these dividend payments, a total of $3.27 were paid in the last five years.

CATO shareholders have seen a 6.9% change in share price over the past year. At present, shares of this small cap stock trade at a price-to-book ratio of 2.1, a price-to-earnings multiple of 12.2, and a price-to-sales multiple of 0.8 (trailing twelve months). Over the past decade shareholders savored a 16.9% average annual return on equity.

Darden Restaurants, Inc. (DRI) recently traded at $46.75 per share. At this price level, the stock has a 3.7% dividend yield. For 10 out of the past 10 fiscal years, a share of DRI paid a total of $4.95 in dividends. Of these dividend payments, a total of $4.26 were paid in the last five years.

DRI shareholders have seen a 3.5% change in share price over the past year. At present, shares of this mid cap stock trade at a price-to-book ratio of 3.5, a price-to-earnings multiple of 14.3, and a price-to-sales multiple of 0.8 (trailing twelve months). Over the past decade shareholders savored a 23.1% average annual return on equity.

Frisch's Restaurants Inc. (FRS) recently traded at $20.35 per share. At this price level, the stock has a 3.1% dividend yield. For 10 out of the past 10 fiscal years, a share of FRS paid a total of $4.48 in dividends. Of these dividend payments, a total of $2.47 were paid in the last five years.

FRS shareholders have seen a 4.9% change in share price over the past year. At present, shares of this micro cap stock trade at a price-to-book ratio of 0.8, a price-to-earnings multiple of 21.4, and a price-to-sales multiple of 0.3 (trailing twelve months). Over the past decade shareholders savored a 10.9% average annual return on equity.

Gap Inc. (GPS) recently traded at $18.63 per share. At this price level, the stock has a 2.4% dividend yield. For 10 out of the past 10 fiscal years, a share of GPS paid a total of $2.28 in dividends. Of these dividend payments, a total of $1.72 were paid in the last five years.

GPS shareholders have seen a 0.4% change in share price over the past year. At present, shares of this mid cap stock trade at a price-to-book ratio of 3.4, a price-to-earnings multiple of 10.8, and a price-to-sales multiple of 0.6 (trailing twelve months). Over the past decade shareholders savored an 18.6% average annual return on equity.

The Home Depot, Inc. (HD) recently traded at $44.51 per share. At this price level, the stock has a 2.6% dividend yield. For 10 out of the past 10 fiscal years, a share of HD paid a total of $5.70 in dividends. Of these dividend payments, a total of $4.33 were paid in the last five years.

HD shareholders have seen a 5.9% change in share price over the past year. At present, shares of this large-cap stock trade at a price-to-book ratio of 3.9, a price-to-earnings multiple of 19.1, and a price-to-sales multiple of 1.0 (trailing twelve months). Over the past decade shareholders savored a 18.9% average annual return on equity.

McDonald's Corp. (MCD) recently traded at $101.74 per share. At this price level, the stock has a 2.8% dividend yield. For 10 out of the past 10 fiscal years, a share of MCD paid a total of $10.53 in dividends.

MCD shareholders have seen a 1.4% change in share price over the past year. At present, shares of this large-cap stock trade at a price-to-book ratio of 7.8, a price-to-earnings multiple of 20.0, and a price-to-sales multiple of 3.9 (trailing twelve months). Over the past decade shareholders savored a 20.9% average annual return on equity.

Target Corp. (TGT) recently traded at $50.17 per share. At this price level, the stock has a 2.4% dividend yield. For 10 out of the past 10 fiscal years, a share of TGT paid a total of $4.44 in dividends. Of these dividend payments, a total of $3.06 were paid in the last five years.

TGT shareholders have sustained a -2.1% change in share price over the past year. At present, shares of this large-cap stock trade at a price-to-book ratio of 2.2, a price-to-earnings multiple of 11.7, and a price-to-sales multiple of 0.5 (trailing twelve months). Over the past decade shareholders savored a 18.8% average annual return on equity.

Walgreen Co. (WAG) recently traded at $33.4799 per share. At this price level, the stock has a 2.7% dividend yield. For 10 out of the past 10 fiscal years, a share of WAG paid a total of $3.53 in dividends. Of these dividend payments, a total of $2.55 were paid in the last five years.

WAG shareholders have seen a 1.3% change in share price over the past year. At present, shares of this large-cap stock trade at a price-to-book ratio of 2.0, a price-to-earnings multiple of 11.4, and a price-to-sales multiple of 0.4 (trailing twelve months). Over the past decade shareholders savored a 17.5% average annual return on equity.

Wal-Mart Stores Inc. (WMT) recently traded at $61.01 per share. At this price level, the stock has a 2.4% dividend yield. For 10 out of the past 10 fiscal years, a share of WMT paid a total of $6.86 in dividends. Of these dividend payments, a total of $4.80 were paid in the last five years.

WMT shareholders have seen a 2.1% change in share price over the past year. At present, shares of this large cap stock trade at a price-to-book ratio of 3.1, a price-to-earnings multiple of 13.7, and a price-to-sales multiple of 0.5 (trailing twelve months). Over the past decade shareholders savored a 21.3% average annual return on equity.

You should keep an eye on each of these stocks and do additional research when they trade at attractive prices. (Good valuations come to those who wait.) Which of these stocks are currently trading at attractive prices? TGT, WAG and GPS are trading at particularly attractive multiples and warrant additional consideration as additions to an income portfolio.

Source: Ring Up These Dividends