Each month we identify high-yield stocks that have ex-dividend dates coming up in the next 30 days. To qualify for a dividend an investor must own stock at the close of trading the day before the ex-dividend date. If the investor sells the stock on the ex-dividend date he or she will receive the dividend. The ex-dividend date is the day the stock trades without the dividend and in a normal market the stock will open lower to reflect the loss of the dividend from the stock price.
Our dividend ratings (DSO ratings) are based on dividend yield, dividend growth, income growth, payout ratio and stock performance. Today we are highlighting a few of the top-rated dividend stocks that still have ex-dividend dates coming up in February 2012.
Eli Lilly (NYSE:LLY)
DSO rating: 96/100. Eli Lilly has a dividend yield of 5% and an ex-dividend date of February 13. The five-year dividend growth rate is 4.2%, which is a little less than we would like to see. The payout ratio is only 47% and the stock is up 11.4% in the last 12 months.
Eli Lilly develops and manufactures pharmaceutical products, which are then sold in over 125 countries. The products include cardiovascular, oncology and endocrinology products. They also have a division that focuses on animal health products.
Johnson & Johnson (NYSE:JNJ)
DSO rating: 94/100. Johnson and Johnson has a dividend yield of 3.4% and an ex-dividend date of February 24. The five-year dividend growth rate is 9.4% and it has been raising the dividend for 49 consecutive years. It has a low payout ratio of 55%. We would like to see higher income growth form JNJ before we can increase its rating.
JNJ researches, designs and sells healthcare-related products. The products are developed through its more than 250 companies in three business segments: Medical devices, Consumer and Pharmaceutical. It owns and operates more than 130 manufacturing facilities worldwide.
Consolidated Edison (NYSE:ED)
DSO rating: 90/100. Consolidated Edison has a dividend yield of 4.1% and a ex-dividend date of February 13. The five-year dividend growth rate is only 1%, which is its only negative in our rating system. It does have 37 years of consecutive dividend increases and a modest payout ratio of 65%.
Consolidated Edison operates as a regulated electric, gas and steam delivery business. It sells electricity to wholesale and retail customers in New York. It delivers gas to over 1 million customers in Manhattan, Queens, and the Bronx.
Centerpoint Energy (NYSE:CNP)
DSO rating: 94/100. Centerpoint Energy has a dividend yield of 4.2% and an ex-dividend date on February 14. CNP has a five-year dividend growth rate of 5.7% and has been paying dividends since 1922. The payout ratio is 61% and it has increased the dividend for the last six years making it one of our highest rated energy dividend stocks.
Centerpoint is a public utility company that operates in many different segments, which include electric and natural gas distribution. It also owns interstate natural gas pipelines and gas gathering systems.
Hickory Technology (HTCO)
DSO rating: 91/100. Hickory Tech has a dividend yield of 4.5% and an ex-dividend date of February 13. HTCO has a five-year dividend growth rate of 2.6%, which is less than we'd like to see but it has increased the dividend for four consecutive years. The payout ratio is also a little higher than we like to see at 75%.
Hickory Tech is a communications and telecom company. It provides VOIP and data solutions to business customers. The telecom business provides residential and business services.
Disclosure: I am long JNJ.