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These days, a lot of people are chasing yield, and some are even going after the super-high-yielders. Personally I like the ones that I consider to be "medium-yield," in the 3-5% range.

I also like companies that have been paying and raising dividends consistently for many years, and companies that are beating the S&P 500 in total return for the past 12 months.

On the other hand, many investors are looking at the popularity of dividend stocks, and wondering whether or not a bubble is developing. Of course, bubbles can really only be labeled such in hindsight, but it does seem prudent to examine high-yielding stocks for overbuying. For that reason, I am building a PE analysis into my criteria as well.

I’ve found only three companies that fit these criteria. They are dependable and stable, performing well, and not overpriced according to PE comparisons. I suggest you take a look for your own dividend portfolio.

  1. United Health Realty Income (UHT) has been paying and raising dividends for 19 years. It is currently trading at approximately $49 per share, and yields 5.1%. It has returned 37.4% over the past 12 months, compared with 15.5% for the S&P 500. Its PE is 8.0, compared to 14.0 for the S&P 500. This PE is far lower than it has been in recent years.
  2. Cincinnati Financial (CINF) has been paying and raising dividends for 51 years. It is currently trading at approximately $39 per share, and yields 4.1%. It has returned 42.9% over the past 12 months. Its PE is 17.5, significantly off its highs from 2011.
  3. Abbot Labs (ABT) has been paying and raising dividends for 39 years. It is currently trading at approximately $65 per share, and yields 3.1%. It has returned 25.7% over the past 12 months. Its PE is 15.9, which is on the low end of its PE for the past five years.

I also considered Bemis (BMS), Kimberly Clark (KMB) and UGI Corp. (UGI). All three met my initial criteria of yield and total return over the past year, but all were at the top of their PE ranges for the past few years, as well as being substantially higher than the PE for the S&P 500, so I did not include them in this list.

Source: 3 Dependable Dividend Stocks With Great 12-Month Returns