7 Stocks That Initiated Dividends In 2011

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 |  Includes: AMGN, CSCO, CY, F, HL, PCP, RCL
by: MyPlanIQ

As we are likely to be in a financial environment where income is going to be squeezed, companies that have dividends are going to be valued more highly. Not only that, but there is anecdotal evidence to suggest that a commitment to paying the investor, reduces the focus on fattening the bonuses that go to management. In any case, Dan Caplingerof the Motley Fool noted seven companies that started to pay dividends -- either for the first time or after a significant break.

We have noted that some companies increase dividends to attract buyers and can be a danger sign. Despite this, it is good to see an increasing number of companies offering dividends and it will be interesting to see how they fare.

Stock

Current Dividend Yield

Ford (NYSE:F) 1.9%*
Hecla Mining (NYSE:HL) 1.6%
Titanium Metals (TIE) 2.0%
Cisco Systems (NASDAQ:CSCO) 1.3%
Royal Caribbean (NYSE:RCL) 1.6%
Cypress Semiconductor (NASDAQ:CY) 2.2%
Amgen (NASDAQ:AMGN) 2.3%*
Click to enlarge

Source: Yahoo Finance. *Ford and Amgen have announced new dividend policies but haven't yet paid them.

This is a diversified set of equities. The selection may not be attractive today but is worth tracking and comparing with our dividend ETF benchmark.

Asset Fund in this portfolio
REAL ESTATE (NYSEARCA:ICF) iShares Cohen & Steers Realty Majors
CASH CASH
FIXED INCOME (NYSEARCA:TIP) iShares Barclays TIPS Bond
Emerging Market (NYSEARCA:VWO) Vanguard Emerging Markets Stock ETF
US EQUITY (NYSEARCA:DVY) iShares Dow Jones Select Dividend Index
US EQUITY (NYSEARCA:VIG) Vanguard Dividend Appreciation ETF
INTERNATIONAL EQUITY (NYSEARCA:IDV) iShares Dow Jones Intl Select Div Idx
High Yield Bond (NYSEARCA:HYG) iShares iBoxx $ High Yield Corporate Bd
INTERNATIONAL BONDS (NYSEARCA:EMB) iShares JPMorgan USD Emerg Markets Bond
Click to enlarge

Portfolio Performance Comparison

Portfolio/Fund Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe
Retirement Income ETFs Tactical Asset Allocation Moderate 1% 9% 9% 72% 7% 55%
Retirement Income ETFs Strategic Asset Allocation Moderate 1% 6% 15% 98% 2% 7%
7 Stocks That Initiated Dividends in 2011 -13% -36% 38% 106% 2% 3%
Click to enlarge

This is a very unusual set of results. Poor over the past year, strong over three years, and only fair over the longer term.

Fund in this portfolio Percentage
F (Ford Motor) 8.39%
HL (Hecla Mining Company) 6.26%
CSCO (Cisco Systems Inc) 6.79%
RCL (Royal Caribbean Cruises Ltd.) 4.17%
CY (Cypress Semi) 42.48%
AMGN (Amgen Inc) 6.66%
TIE (Titanium Metals) 25.25%
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We can also see that Cypress and Titanium metals are clearly the best of the bunch.

Three Month Chart One Year Chart Three Year Chart Five Year Chart

My view on this selection is that while it's a good idea to find dividend producers, this is not a selection in which I would invest immediately. There are too many other large companies that have a long history of doing well.

Look at the comparison with the dividend aristocrats that we have previously reviewed:

Portfolio Performance Comparison

Portfolio/Fund Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe
Retirement Income ETFs Tactical Asset Allocation Moderate 1% 9% 9% 72% 7% 55%
Dividend Aristocrats for 2012 15% 86% 18% 101% 8% 36%
Retirement Income ETFs Strategic Asset Allocation Moderate 1% 6% 15% 98% 2% 7%
7 Stocks That Initiated Dividends in 2011 -13% -36% 38% 106% 2% 3%
Click to enlarge

This selection of 7 stocks may be worth tracking, but that's about all for now.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.