The 40 Best Dividend Paying Stocks in the World

Posted on February 10, 2012 by danno52000

…from an excellent piece by SocGen (courtesy of Business Insider).  We’ve profiled most of these stocks on this site and while some names (Chevron, Johnson & Johnson and Exxon) are perpetually solid dividend payers, one sector that didn’t pop up on our radar but is potentially very compelling long-term is:  Australian Banks

Westpac (WBK)

Sector:  Banks (Australia)

2011 Yield: 7.9%

Westpac has a September year end, and announced a second half dividend of AU$0.8, on top of the AU$0.76 paid at the half year stage, or a 12.2 percent increase over the prior year. Looking forward to 2012, expectations are for the dividend to increase 4.5 percent to AU$1.67. On current numbers, Westpac is yielding 8.1 percent for 2012FY.

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Commonwealth Bank of Australia (CMWAY)

Sector:  Banks (Australia)

2011 Yield:  6.6%

“For the full fiscal year 2012, consensus is expecting a dividend of AU$3.39, meaning that Commonwealth Bank of Australia is yielding 6.7 percent.”

Source: Societe Generale

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Interesting Insight into Closed End Funds

Posted on January 26, 2012 by danno52000

Closed-End Funds have offered shrewd dividend seekers, great opportunities for years.  Often times the reason underlying the premium or (more often) the discount is simply liquidity-driven.  Sometimes it’s more complicated than that…but, in my mind, it’s always worth a deeper look.

SmartMoney has a great article offering some insights into the nature of Closed-End Funds and their discounts:

“It’s not uncommon for one that holds, say, $13 a share worth of stocks or bonds to sell for $12. Discounts like that give investors an opportunity to secure dividend yields that are larger than the yields on the underlying stocks and bonds. And if they choose wisely, they can make money two ways, says Doug Bonds, manager of the Cohen & Steers Closed-End Opportunity fund: (1) when the fund assets earn a return, and (2) if the fund discount shrinks.”

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Mortgage REITs still a great buy

Posted on December 19, 2011 by danno52000

Credit Suisse just released a 2012 outlook for mREITs and the picture is still good…as long as “Helicopter Ben” keeps rates this low, RMBS (especially non-agency) is going to be a great place for yield hunting and seeing how committed the FED is towards keeping rates low (which is why we recommended this space after the last FOMC meeting), this opportunity should be around for awhile.

Their top recommendation:  TWO Harbours…which is also our favorite pick (and yielding 16%).

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Dividend stocks get new respect

Posted on November 22, 2011 by danno52000

Good Fortune article on why Dividend Paying Stocks are worth paying attention to…

T. Rowe Price’s Tom Huber says the category makes more sense than ever and explains what he’s buying.

Some highlights:

“One that’s moved into the top five is PepsiCo (PEP). We have a valuation bias, so when we notice a company of Pepsi’s quality that seems to be struggling, we’ll do the work. It has underperformed relative to its peers, in part because of losing some market share domestically to Coca-Cola. I think it is now making the right decisions to increase marketing and ad spend. If you look out a few years and assume a reasonable multiple, you can make 15% to 20% without taking on undue risk.”

“United Technologies (UTX) [which makes everything from air conditioners to elevators to helicopters] is well positioned in the industrial world and is a good way to play global GDP growth. It does about 20% of its business in emerging markets. That’s important now, and it’s only going to become more important. We think it could earn close to $6.80 in 2013. It trades around 11 times that number, and it could get a higher multiple in an environment where people feel better about the global economy.”

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One of the best dividend stocks ever…

Posted on November 14, 2011 by danno52000

Philip Morris International Inc (PM) – is the world’s largest publicly traded tobacco company after being spun off from Altria Group (MO) in 2008 and has been one of the best dividend paying stocks of all time.

Despite having given the following example ad-nauseum, I’ll drill it home once more: $2,000 invested in Phillip Morris back in 1980 would’ve grown to over $670,000 today and would be paying over $9,600 a year in dividends.

Tobacco stocks are absolute cash-machines…the problem is, over the years litigation and increased anti-smoking campaigns have reduced demand and taxed profits.  There is one convenient little way to bypass these issues, though….they only exist in America.  So invest in tabacco stocks that are growing abroad – and PM is a great example.

The company has almost 16% of the world market for cigarettes (led by its Marlboro brand, which accounts for almost a third of sales). About 41% of total sales come from the EU, 24% from Middle East & Africa, 22% from Asia and 13% from Latin America (and Canada).

Aside from the potential for future dividend growth from its current yield of about 4.4% (which isn’t too shabby at all in this low interest rate environment), management is using cash to buy back shares as well, so investors will get higher dividend payments on fewer outstanding shares.

Point is – every dividend investor should seriously consider some exposure to Phillip Morris.

Read more here.

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Dogs of the Dow not worth investing in…

Posted on October 25, 2011 by danno52000

I have always been against using the “Dogs of the Dow” strategy for the simple reason that the strategy itself is just too simple.  Doing even basic research into the companies you’re buying (as well as not relegating yourself to a small universe, which doesn’t contain the best dividend paying stocks) will yield much improved returns over time.

Specifically, investors can do much better by focusing on a larger universe (including international stocks) and looking at more parameters (dividend yield alone is not sufficient).

…But don’t take my word for it.

The Dividend Aristocrats List is an obvious place to start but our Dividend Aristocrats Select List is a list of the best dividend stocks (from the Dividend Aristocrats list) and is a much better starting point for those who just want to “point and click” their way to a portfolio that will grow over time and generate a robust income stream…

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Great Small Cap High-Yield Dividend Stock

Posted on October 18, 2011 by danno52000

Medallion Financial Corp. (Nasdaq: TAXI)

This small-cap company operates in a great little niche that generates alot of cash and has huge barriers to entry.  Medallion Financial is a leading provider of financing for taxi medallion purchases in New York (as well as Boston, Chicago, Newark, Philadelphia and Baltimore) to help them purchase the “medallion” required to operate a cab in the city - which run between $686,000 to $975,000 each in NYC.  Loaning against these medallions is a fantastic business because the supply is regulated by the city, the demand is high and there is little competition.  The company has about $650m in outstanding loans at between 6-7%.

The prospect of charging cars to enter midtown Manhattan during peak hours could benefit Medallion’s business as it would cause a jump in medallion prices.  The company hasn’t written off a loan in 70 years, and only has to repo an average of only 2 medallions a year.   Also, the company recently secured a new credit facility from Citigroup would would allow it to increase its leverage and thus bump its ROE from high single digits to about 15%.

This is one of those unknown high dividend stocks in a very lucrative niche sporting a 7% yield that’s going to be a good earner for years to come.  Read the full article here.

 

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The Power of Reinvested Dividends

Posted on October 9, 2011 by danno52000

Whenever I talk to a ‘newbie’ about the virtues of investing in dividend paying stocks for the long haul, I always have to give a concrete example of how the power of compounded dividends (no matter how small) will add up to solid wealth over time.  Phillip Morris and Pepsi are two classic examples of how top dividend paying stocks can build a solid cash flow over time.  Here are some others just to prove this point:

Johnson & Johnson (JNJ) – one of my favorite dividend payers and a great one to buy right now.  100 shares of JNJ 20 years ago would’ve cost about $6,750.  By reinvesting those dividends back into the stock, you’d have over 1200 shares today worth over $68,000 (10x your original investment) and paying over $2,500 in dividends a year – almost 40% yield on your original investment.

Nationwide Health Properties (NHP) - A $10,000 investment in Nationwide Health Properties back in 1988, would’ve turned into a whopping $358,554 today AND you’d be getting $11,132 in dividends every year.

Last example is Coca-Cola (KO) which is one of the best dividend paying stocks over its history.  The company went public in 1919 at $40 a share.  Today, each share is worth over $250,000…without dividends reinvested.  With the power of compounding dividends, each one of those KO shares is now worth $8.5 million and is throwing off $243,o00 a year in dividends.

For a good list of stocks to buy today that will turn into examples like this tomorrow…we recommend the Dividend Aristocrats List.  And as always…this site is dedicated to bringing the best ideas for top dividend paying stocks that can make you rich over time and that aren’t trafficked in the mainstream…

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Some Top Dividend Paying Stocks to consider buying on the dip…

Posted on September 27, 2011 by danno52000

Ambev (NYSE:ABV)

Ambev is a Brazilian based beverage company that controls 70% of the beer market and around 40% of the total beverage market in Brazil. Its better known for its premium beer label Stella Artois. Interestingly, the company is also the largest Pepsi bottler outside the US and also controls the Latin American soft drink Guarana Anarctica – a popular local drink made from an Amazonian fruit which is the number 2 drink in Brazil (after Coca-Cola).

The company currently sports a 1.6% dividend yield and has increased the dividend for the last 6 years (at an average rate of almost 50%).  The stock is up 50% in the last 12 months but still represents a top dividend paying stock for the long haul.  This isn’t the biggest dividend paying stock out there but it does offer the compelling upside in a fast growing market.

Century Link, Inc. (NYSE:CTL)

We’ve profiled CTL at length in this article.  Suffice it to say, CTL has a current dividend yield of 6.50% and have been steadily increasing it for years (it’s more than doubled in the last 3 years).  The company is aggressively growing its earnings and marketshare and should be a solid high-yield dividend payer for years to come.

Omega Healthcare Investors, Inc. (NYSE: OHI)

This is a great company in one of our favorite dividend sectors…. in an awesome industry for long-term growth.  In the next 10 years, the number of retirement-age seniors will be almost 60 million (up from 40 million currently).  OHI is a healthcare REIT that owns assisted living facilities in 27 states.  OHI is currently yielding 6.5% and has grown its dividend almost 40% since the start of 2007.

StoneMore Partners L.P.  (NYSE:STON)

StoneMor, the biggest funeral service company in the U.S., operates in a rather unusual sector and judging from the business description, its stocks can easily be ignored on the first glance.

The seemingly morbid company, dealing with after-death services, has a completely different picture to present to its investors. Its striking 8% dividend (and growing) is ample proof that this age-old profession can actually be a very profitable (and very stable) business … which is perfect for investing for dividends.

StoneMor covers more than 26 states in the U.S., mostly on the East Coast, and Puerto Rico. It boasts of operating 260 cemeteries and 58 funeral homes. It primarily deals in interment rights, caskets, burial vaults, cremation niches, markers, and other cemetery related merchandise. It also offers digging and refilling of burial spaces to install the vault and place the casket into the vault.

 

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Jeremy Grantham says “Buy High Dividend Paying Stocks”

Posted on September 22, 2011 by danno52000

GMO’s Jeremy Grantham is a legendary value investor whose quarterly letters are a must-read among value-investing disciples.  Today’s article in MarketWatch, Grantham basically says the only thing you can trust is big, global dividend-paying companies.  Especially for retirees – don’t bet on bonds.  Rising rates are coming and dividends can increase…coupon payments can’t.  As we’re just entering decades of a low-growth environment, a portfolio of top dividend paying stocks is best way to create long-term wealth.

Among some of the better gems from the article:

“[Grantham's] not jumping on the long-term-bond bandwagon. “One day we will have more inflation and our bonds will bleed like a pig,” Grantham said. “The only reason for buying long bonds is short-term or as a desperate haven for terrorized investors. But the potential to make longer-term real money is naught.” 

“Grantham advised taking a page from GMO and buying shares in companies with strong finances and which produce goods that people need, as opposed to luxury items. Look for dividend-paying opportunities in emerging markets especially.”

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