Best Dividend-Paying Financials And REITs

Includes: AGNC, BX, CYS, HVB, NNN
by: StockMatusow

In part 1 and part 2 of my best dividend0paying stock list, I listed a total of 10 top dividend paying stocks in the market. These stocks were not ranked in any particular order, as each one of them has pros and cons for investors to consider. In this article, I will list 5 financial and REIT stocks that pay nice dividends for investor consideration. The financial sector can be a riskier play these days, so please take this into consideration. Spreads can fluctuate quickly, and dividend yields can fall equally as fast due to uncertain global economic issues.

For those of you who wish to know more about basic dividend stock form and function, please read my article about Seadrill Limited (NYSE:SDRL), a top-rated common dividend stock.

National Retail Properties (NYSE:NNN)

  • 2/17/11 pps: $26.63
  • Dividend yield: 5.78%
  • Dividend type: Cash
  • Annualized dividend: $1.54 per share, $0.385 last quarter
  • Next Ex-dividend date: Not yet announced; expected in late April or early May

National Retail Properties acquires, owns, manages, and develops retail properties in the United States.

NNN beat the street estimates in their recent Q4 11 earnings calls by $0.03, which is quite an accomplishment when compared with their peers, who are struggling to meet estimated earnings for the respective quarter. For 22 years in a row, NNN has been increasing its dividend payout.

NNN is seeing improved occupancy along with 8 consecutive years of occupancy at 96% or higher with acquisitions of $772 million, a huge increase from the $256 million in 2010. More properties and more occupancy equates to more cash flow for NNN and a virtually certain continuance of its increased dividend payouts moving forward.

My rating on National Retail Properties: 5 out of 5 stars.

Cypress Sharpridge Investments (NYSE:CYS)

  • 2/17/11 pps: $13.60
  • Dividend yield: 14.71%
  • Dividend type: Cash
  • Annualized dividend: $2.00 per share, $0.50 last quarter
  • Next Ex-dividend date: Not yet announced; Expected sometime in March
  • The company has roughly $17 million in cash on hand

Cypress Sharpridge Investments is a specialty finance with the objective of achieving consistent risk-adjusted investment income.

The company provides loans through intermediaries to homeowners, real-estate developers, corporations and other borrowers. It invests' in residential mortgage backed securities either issued or guaranteed as to principal and interest by a government agency or a government-sponsored entity, or Agency RMBS, collateralized by either adjustable-rate mortgage loans, or ARMs, with interest rates that reset monthly, hybrid ARMs that typically have a coupon rate that is fixed for an initial period and thereafter resets at regular intervals, or fixed rate mortgage loans.

The Market Vector Mortgage REIT Income ETF is up more than five percent over the last month, and Cypress is trading near its 52 week high. The company reported net income of $44.1 million during the fourth quarter of 2011, or $0.53 per diluted share, compared to net income of $96.3 million, or $1.16 per diluted share in the third quarter of 2011.

Even with weaker Q4 11 earnings, Cypress makes this list because of its higher 15% yield and low beta of 0.20. Cypress has only been paying out dividends since 2009, so come caution is warranted here before making a decision to invest in the stock. I rate this dividend stock higher risk, but having a higher dividend reward. The risks entail, but are not limited to: prepayment and spread issues, interest rate fluctuations, decreased liquidity, and extension risk.

My rating on Cypress Sharpridge Investments: 3 out of 5 stars.

American Capital Agency (NASDAQ:AGNC)

  • 2/17/11 pps: $30.37
  • Dividend yield: 16.46%
  • Dividend type: Cash
  • Annualized dividend: $5.00 per share, $1.25 last quarter.
  • Next Ex-dividend date: 3/5/2012
  • Record date: 3/7/2012
  • Pay date: 4/27/2012

American Capital Agency Corporation operates as a real estate investment trust. It invests in residential mortgage pass-through securities and collateralized mortgage obligations for which the principal and interest payments are guaranteed by a U.S. Government agency or U.S. Government-sponsored entity. The company funds its investments primarily through short-term borrowings structured as repurchase agreements.

Last Friday's Q4 earning call for American Capital was less than stellar with comprehensive income $2.27 per share, comprised of $0.99 of GAAP net income and unrealized gains on assets, which are recorded in other comprehensive income of $1.28 per share. Core income was $0.98 during the quarter or $1.1, backing out approximately $0.03 per share of catch up premium amortization.

The beta is low for American Capital, coming in at 0.56, and the company has been paying out dividends since 2008. For the same reasons mentioned about Cypress, American Capital makes this list, except is a much safer dividend play, as a financial stock with U.S. government backing.

My rating on American Capital Agency: 4 out of 5 stars.

Blackstone Group L.P. (NYSE:BX)

2/17/11 pps: $15.97
Dividend yield: 5.51%
Dividend type: Cash
Annualized dividend: $0.88 per share; $0.10 last quarter; announced $0.22 for next payout
Next Ex-dividend date: 3/13/2012
Record date: 3/15/2012
Pay date: 3/30/2012

Blackstone Group L.P., together with its subsidiaries, provides alternative asset management and financial advisory services worldwide. The company operates in five segments: Private Equity, Real Estate, Hedge Fund Solutions, Credit Businesses, and Financial Advisory.

There is only one reason Blackstone makes my list here, and that is the huge quarterly dividend increase from $0.10 to 0.22, more than double the previous quarter. The ex-dividend date is coming up soon, so couple these 2 factors, and Blackstone is rated high here, at least for the upcoming dividend in March. If they continue to increase and/or keep it at $0.22, consider adding the stock to your longer term dividend portfolio.

Blackstone has a very high beta of 2.12. so the pps will move around quite a bit in any given trading session, so consider this fact, notwithstanding the huge quarterly dividend increase.

My rating on Blackstone Group: 4 out of 5 stars if dividend increase occurs on a regular basis; otherwise my rating would be 3 stars.

Hudson Valley Holding (NYSE:HVB)

2/17/11 pps: $16.85
Dividend yield: 4.75%
Dividend type: Cash
Annualized dividend: $0.80 per share, $0.18 last quarter
Next Ex-dividend date: Not yet announced, expected in May

Hudson Valley Holding Corporation operates as the holding company for Hudson Valley Bank, which provides banking and related services to businesses, professionals, municipalities, not-for-profit organizations, and individuals in New York.

Hudson saw declines in the fourth quarter and for the year ended 2011 profitability, due largely to write-downs associated with the transfer of loans to held-for-sale status in contemplation of loan sales, to reduce classified loans and the concentration of commercial real estate loans.

The Hudson dividend should not go away any time soon, as the company has been consistently paying out dividends since 2001. Hudson stock has a slightly higher beta, coming in at 1.12, so the pps can be a bit volatile. Because of the longer history of dividend pay-outs, and the safer move away from commercial real estate loans, Hudson makes my list.

My rating on Hudson Valley Holding: 3 out of 5 stars.

All of the information above is provided as a starting point for investors to begin their due diligence. Careful consideration is needed when contemplating making an investment in REITS and financial dividend paying stocks.

Dividend data sourced from and

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

Disclaimer: This article is intended for informational and entertainment use only and should not be construed as professional investment advice. Always do you own complete due diligence before buying and selling any stock.