The Best Dividend Stocks For 2015

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Includes: AGU, BLX, BNS, COH, CPA, CYD, DE, F, FCAP, MHLD, NKSH, NPBC, NUS, PFS, RGR, RIG, RIVR, RY, SAFT, SDRL, SUSQ, TD, TGH, TUP, WU
by: Shailesh Kumar

Which are the best dividend stock values that will potentially return superlative income and capital gains performance in 2015? The time to look for these ideas is now. The recent market declines have created some extraordinary values in the dividend paying stocks. We are also in the time of the year when many investors are looking at their tax plans and considering repositioning their portfolios for the year 2015. The following companies across a wide range of industry spectrum have been selected for their excellent dividend yield, history of above average dividend growth rates which are likely to continue based on their dividend coverage, and of course, valuations.

You will find that most of the stocks in this list are currently trading at very close to their 52-week lows. This is not a surprise as the broader market indices have not done much this year except to provide palpitations to anxious investors. As the readers of Value Stock Guide, you understand the value of patience. Coupled with good upfront research, and careful selection to maintain a diversified portfolio, these stocks should form a solid basis for a dividend portfolio. I run these screens to find ideas to recommend as part of the VSG portfolio to my members. A number of my members also maintain a dividend portfolio as part of their investment plan, and this screen in particular also helps them structure their dividend portfolio.

One way to create a diversified portfolio is to get exposure to a variety of industries and sectors. To help with this, let’s list these stocks by sectors

1. Basic Materials

Company Name Symbol Market Capitalization Dividend Yield (Annualized) Dividend Growth Rate (5 year avg) Dividend Coverage (EPS TTM/IAD) P/E (Price/TTM Earnings) Industry
AGRIUM INC. (NYSE:AGU) $12.0B 3.59% 93.71% 1.9 14.5 Agricultural Chemicals
TRANSOCEAN LTD (NYSE:RIG) $10.9B 9.95% 102% 1.9 5.7 Oil & Gas Drilling and Exploration
SEADRILL LTD (NYSE:SDRL) $11.3B 17.44% 17.98% 2.2 2.7 Oil & Gas Drilling and Exploration

We all have seen the oil prices declining. There are indications that the supply is starting to exceed the demand while at the same time, OPEC is leaning towards keeping the production up to keep/gain market share. If the oil prices continue to soften, higher-cost production will start to shut down. There may also be slowdowns in drilling and exploration activity. This explains the low multiples and high dividend yields being sported by the O/G drillers. Seadrill also has a few management challenges it is coping with.

2. Consumer Goods

Company Name Symbol Market Capitalization Dividend Yield (Annualized) Dividend Growth Rate (5 year avg) Dividend Coverage (EPS TTM/IAD) P/E (Price/TTM Earnings) Industry
FORD MOTOR CO (NYSE:F) $54.2B 3.58% 20.11% 3.2 8.7 Auto Manufacturers
TUPPERWARE BRANDS CORP (NYSE:TUP) $3.4B 3.98% 25.32% 1.7 14.8 Packaging and Containers
NU SKIN ENTERPRISES INC. (NYSE:NUS) $2.6B 3.17% 24.57% 3.8 8.7 Personal Products
COACH INC (NYSE:COH) $9.7B 3.84% 35.10% 2.1 12.4 Textile, Apparel, Footwear and Accessories

3. Financials

Company Name Symbol Market Capitalization Dividend Yield (Annualized) Dividend Growth Rate (5 year avg) Dividend Coverage (EPS TTM/IAD) P/E (Price/TTM Earnings) Industry
WESTERN UNION CO (NYSE:WU) $8.4B 3.16% 65.72% 2.9 11.1 Credit Services
BANCO LATINOAMERICANO DE COMERCIO EXTERIOR SA (NYSE:BLX) $1.2B 4.60% 13.60% 1.8 12.4 Money Center Banks
BANK OF NOVA SCOTIA (THE) (NYSE:BNS) $71.3B 4.01% 6.14% 2.3 10.2 Money Center Banks
TORONTO-DOMINION BANK (THE) (NYSE:TD) $85.3B 3.64% 9.03% 1.8 11.7 Money Center Banks
ROYAL BANK OF CANADA (NYSE:RY) $99.1B 3.67% 7.26% 2.1 12 Money Center Banks
MAIDEN HOLDINGS LTD (NASDAQ:MHLD) $831.5M 3.86% 12.89% 2 13.3 Property and Casualty Insurance
SAFETY INSURANCE GROUP INC (NASDAQ:SAFT) $891.1M 4.72% 11.84% 1.6 14.5 Property and Casualty Insurance
SUSQUEHANNA BANCSHARES INC (NASDAQ:SUSQ) $1.9B 3.60% 12.47% 2.6 11.2 Regional Banks
RIVER VALLEY BANCORP. (NASDAQ:RIVR) $52.7M 4.35% 1.84% 3 7.9 Regional Banks
NATIONAL PENN BANCSHARES INC (NASDAQ:NPBC) $1.3B 4.18% 14.87% 1.7 14.1 Regional Banks
NATIONAL BANKSHARES INC (NASDAQ:NKSH) $207.4M 3.69% 6.05% 2.2 11.5 Regional Banks
FIRST CAPITAL INC (NASDAQ:FCAP) $63.1M 3.65% 3.13% 2.4 11.9 Regional Banks
PROVIDENT FINANCIAL SERVICES INC. (NYSE:PFS) $1.1B 3.54% 6.40% 1.9 14.5 Regional Banks

Some of the banks in this list are very small so you need to consider the liquidity in the shares and also the fact that these banks tend to be heavily concentrated in a single geographical area and are therefore have risks aligned with the economic risks of the local area. Canadian banks appear to offer sound value and great income stream and should be actively considered.

4. Industrial Goods

Company Name Symbol Market Capitalization Dividend Yield (Annualized) Dividend Growth Rate (5 year avg) Dividend Coverage (EPS TTM/IAD) P/E (Price/TTM Earnings) Industry
STURM RUGER & CO INC. (NYSE:RGR) $961.5M 4.16% 33.16% 2.5 9.5 Aerospace/Defense Products and Services
CHINA YUCHAI INTERNATIONAL LTD (NYSE:CYD) $689.8M 6.64% 64.38% 2.6 5.9 Diversified Machinery
DEERE & CO (NYSE:DE) $30.2B 2.85% 16.47% 4 9.4 Farm and Construction Machinery

Although China Yuchai is based in Singapore, its business is heavily dependent on China. Consider country risk if you would like to look into this stock deeper.

5. Services

Company Name Symbol Market Capitalization Dividend Yield (Annualized) Dividend Growth Rate (5 year avg) Dividend Coverage (EPS TTM/IAD) P/E (Price/TTM Earnings) Industry
COPA HOLDINGS SA (NYSE:CPA) $4.4B 3.84% 59.67% 3.2 8.5 Regional Airlines
TEXTAINER GROUP HOLDINGS LTD (NYSE:TGH) $1.8B 5.84% 15.36% 1.7 10.4 Rental and Leasing Services

This list of 25 of the best dividend stocks for 2015 includes many foreign names. If the USD were to weaken further, these stocks may benefit (for the US-based investors). I have no opinion on the currency market, but in any case, low valuations afford a great deal of protection against capital loss should the global economy continue to be volatile. As usual, do your own due diligence before you invest any money in these stocks.

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.

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