monthly dividend stocks

Article Index

Two Dividend Stocks to Buy for Increasing Payouts

By Guest Editorial, Money Morning - February 21, 2013

Following a banner year for dividend stocks in 2012, 2013 is delivering more of the same as an increasing number of companies are either initiating cash dividends or boosting existing payouts.

From Feb. 1 to Feb. 8, at least 15 companies increased their cash dividends. That list included familiar names such as Dow component 3M Co. (NYSE: MMM), Allstate Corp. (NYSE: ALL) and Archer Daniels Midland Co. (NYSE: ADM), a new addition to Warren Buffett's Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) equity portfolio.

It was more of the same when 14 companies raised their payouts in the week ending Feb. 15. That list includes Comcast Corp. (Nasdaq: CMCSA), PepsiCo Inc. (NYSE: PEP) and United Parcel Service Inc. (NYSE: UPS).

With all these familiar blue chips delivering ever-increasing dividends, it is not surprising that some stocks of the same caliber go overlooked by investors. Here are a couple of those unheralded names investors on the hunt for dividend stocks should become more familiar with.

To continue reading, please click here...

10 Dividend Stocks to Buy Now

By Diane Alter, Contributing Writer, Money Morning - February 12, 2013

Near-zero interest rates have lots of savers clamoring for yield and plunging into dividend stocks.

Compared with paltry yields on a bevy of bonds, dividend stocks - especially those with the potential of capital appreciation - have become progressively more attractive to income-seeking investors.

Now's a good time to hunt for dividend stocks, as more companies increase payouts. Dividend payments grew sharply in Q4 2012, with 1,262 dividend increases reported, a 94.5% gain over the 649 increases in Q4 2011, according to S&P Dow Jones Indices.

And rich dividend payments are expected to continue among companies flush with cash since
they have curtailed expansion and investment amid growing global uncertainty.

In fact, more than 5,000 analyst estimates compiled by Bloomberg News forecast that companies in the MSCI World Index will boost payments by 3.8% to a combined $39.43 a share this year, up from a low of $29.58 in 2009.

To continue reading, please click here...

Dividend Stocks to Buy Now: The Only New "Aristocrat" Worth a Bet

By Don Miller, Contributing Writer, Money Morning - February 4, 2013

Weary investors scouring the landscape to find decent dividend stocks to buy should take a hard look at the latest list of Dividend Aristocrats.

The S&P 500 Dividend Aristocrat Index measures the performance of companies in the S&P 500 Index with amarket value of at least $ 3 billion that have increased dividends for at least 25 consecutive years.

In 2013, only 54 companies, approximately 11% of companies in the S&P 500, made the cut.

Actually, it's no surprise this group of dividend stocks is tiny.

Think about it.

These companies have raised dividends for the last 25 years - a period of time that included the Great Recession, numerous oil price shocks, at least two major market meltdowns and wars in Iraq and Afghanistan.

If they can steadily raise their dividends in the face of that kind of adversity, you can be pretty confident they're going to be around for awhile.

They're the kind of companies that consistently deliver the goods, having outperformed the rest of the S&P 500 on a regular basis. The Aristocrats returned 4.59% annually over the last five years, while the group as a whole produced a negative 0.25% return for the period.

These are businesses with strong balance sheets, healthy earnings and cash flow generation that can help you protect your portfolio - regardless of the market's direction.

But not every Aristocrat is worthy of your hard earned dollars.

Some drop by the wayside. Others are increasing their dividend by draining capital from their business.

Here's what to look for when choosing the best dividend stocks to buy.

To continue reading, please click here...

Dividend-Paying Stocks to Buy: High Yield from an Unexpected Sector

By Guest Editorial, Money Morning - January 28, 2013

Until recently you rarely if ever heard technology mentioned as a good sector to search for dividend-paying stocks to buy.

Technology companies for decades have eschewed paying dividends to shareholders - to grow, you had to spend money. They plowed their annual profits back into the company, spending on research and development or acquiring smaller tech companies that improved their product offerings.

Only the largest tech companies like International Business Machines Corp. (NYSE: IBM) ever paid meaningful dividends to their shareholders. If a tech stock paid a dividend, investors would take it as a sign that the company had matured and was no longer a growth stock with meaningful opportunities for appreciation.

In fact, a dividend declaration by a technology company could often lead to a sizable stock decline.

But those days have changed.

How Tech Companies Evolved Into Dividend-Paying Stocks

Tech stopped shunning dividends in the 1990s when tech stocks went through a boom phase.

That's because institutional investors have mandates that prevent them from buying anything other than dividend-paying stocks, and they felt they were missing the action in the technology and Internet sector. They began to pressure tech stocks to pay a small dividend so they too could participate in the runaway rally.

Since then we have seen many of the tech giants initiate regular dividend payments to their shareholders. They were never intended to be significant but things have changed dramatically in the last decade.

Today many of these tech giants have seen their stock prices decline as their cash balances increased. They have raised the dividend to the point that tech stocks can now be a meaningful addition to income portfolios - especially for pre-retirement investors looking for income streams that will still be healthy 10 years from now.

Here are a couple examples of some of the best sources of yield in tech.

To continue reading, please click here...

Don't Miss These Last Special Dividends in 2012

By kdowdle, Money Morning - December 18, 2012

If you missed out on the rush of special dividends in 2012 or simply want to reap further rewards, there's still time to cash in.

That's because even if a fiscal cliff deal is reached, tax rates on dividends will probably still increase. If you add in the investment surtax included in U.S. President Barack Obama's healthcare bill, the top tax rate on dividends could almost triple next year, from 15% to 43.4%.

That is why companies are looking to help out investors in the way of special dividends in 2012.

"Tax rates on dividends are never going to be better," said Steve Joyce, CEO of Choice Hotels International Inc. (NYSE: CHH), on its last earnings call. "I don't know how much worse they are going to get, but they are going to get worse."

Special Dividends in 2012

Special dividends offer investors the chance to cash in on a large dividend payout before it's taxed at a higher rate, plus investors will enjoy higher share prices as special dividend-paying stocks get a bump from the news.

More than 420 special dividends have been announced just in November and December, which will soon exceed the 433 paid in all of 2011, according to S&P Capital IQ.

And it's not just special dividends that are helping investors - regular dividends are being altered as well.

Wal-Mart Stores Inc. (NYSE: WMT) announced its fourth-quarter dividend payout, originally scheduled for Jan. 2, will be paid on Dec. 27, and Costco Wholesale Corp. (Nasdaq: COST) and Oracle Corp. (Nasdaq: ORCL) also moved up their first 2013 dividend payments.

Costco not only paid out its first dividend of 2013 in December, it also issued a $7 per share special dividend, totaling $3 billion, to be paid on Dec. 18.

Wynn Resorts Ltd. (Nasdaq: WYNN) was another company in the past two months to announce a special dividend. Along with Wynn's $750 million dividend, some of the biggest payouts have been Brown-Forman Corp's (NYSE: BF.B) $853 million payout, a $1.1 billion payout by HCA Holdings Inc. (NYSE: HCA) and a $1.6 billion dividend by LyondellBasell Industries NV (NYSE: LYB).

Dozens of other companies have also rewarded shareholders.

"It's like a nice end-of-the-year gift," Jay Wong, a Los Angeles-based portfolio manager for Payden & Rydel, a money manager that manages $75 billion told The Wall Street Journal. "We anticipate that some others will probably issue special dividends before the end of the year, when they get a better sense of what's going to change in the tax structure and they assess their financial health."

So where can investors find the next payout?

To continue reading, please click here...

2013 Dividend Stock Forecast: The Road to True Wealth Starts Here

By Martin Hutchinson, Global Investing Specialist, Money Morning - November 27, 2012

If you listen to the press, Taxmageddon is going to be a "nightmare" for dividend stocks.

There's only one problem with this scary story: It isn't true.

Of course, I'll be the first one to tell you I'm not in favor of higher taxes on dividends.

And it is true that if we fall off the "fiscal cliff" taxes on dividends will revert to the full income tax rate of each individual taxpayer.

For the top taxpayers that means the top rate on dividends will rise from 15% to 43.4% if dividends become fully taxable again.

However, that's not as bad as it sounds, which is why I believe dividend stocks will remain the place to be in 2013.

Here's why.

First institutional holders of dividend stocks are taxed at their own rate so they did not benefit from the 2003 cut in dividend taxes. That means they won't suffer from a new increase.

And even among individual investors, many have their investments in IRAs or 401(k )s or other tax- deferred accounts. These holders will continue to receive dividends that won't be immediately taxed.

As for those on more modest incomes, perhaps being retired and living mostly on their dividend income, they will pay taxes only at 15%, 25% or 28%.

These are the thresholds which have been indexed for inflation since 2001, meaning the vast majority of tax payers will never get close to the 43.4% figure that makes for great scary headlines.

But it's not just all about tax rates. There are other reasons why savvy investors should continue to invest in dividend stocks in 2013.

One of them is Barack Obama...

To continue reading, please click here...

Three Dividend-Paying Stocks Likely to Increase Payout

By Don Miller, Contributing Writer, Money Morning - November 26, 2012

One reason investors are scared silly over fiscal cliff 2013 is the potential tax hike that will affect investing in dividend-paying stocks.

If Congress doesn't act the rate on dividends will revert to the ordinary income rate, which tops out at 39.6%, after it was lowered to 15% during the George W. Bush administration.

"It's a foregone conclusion the rates are going up -- it's just a matter of how high they go," Todd Lowenstein, a money manager with HighMark Capital Management Inc. told Bloomberg News.

But history shows dumping dividend-paying stocks because of higher tax rates is a losing game.

Even if tax rates go up, investors will fatten their wallets on companies that raise dividends because the money compounds over time, essentially paying interest on the interest.

And right now, there are plenty of good reasons for corporations to reward investors with higher payouts.

Why Dividend-Paying Stocks Will Increase Payout

Companies are sitting on $3 trillion of cash and can create badly needed goodwill by showing they're attuned to investor concerns about higher taxes, according to HighMark's Lowenstein.

Plus, if corporate tax rates climb, companies may want to increase their dividend payouts instead of paying more taxes on interest from that cash.

And it's about time, based on the miserly way companies have been treating investors.
Companies in the S&P 500 paid a paltry 27% of earnings to investors in dividends last year, according to research from Goldman Sachs Group Inc(NYSE: GS). Over the past 50 years, the payout ratio has rarely dropped below 40%.

In fact, the best companies are committed to boosting their dividends in even the worst economic times. Many of them are so predictable that you can narrow it down to the very day they'll pay dividends and, in some cases, even the size of the increase.

Three Dividend-Paying Stocks Likely to Pay More

Here are three companies with long track records that will almost certainly raise their dividends in the near future:

To continue reading, please click here...

Why Dividend Investors Should Worry About an Obama Victory

By Martin Hutchinson, Global Investing Specialist, Money Morning - September 12, 2012

I don't have to tell you there is a lot at stake for dividend investors in November.

In fact, an Obama victory could hit income investors with something of a double whammy.

You see, for dividend investors it isn't simply just a matter of higher tax rates, the changes President Obama has in mind may result in fewer dividends paid altogether.

You can chalk it up to the law of unintended consequences.

Let me explain.

Thanks to the Bush tax cuts of 2003, dividends are currently taxed at 15% to individual investors.

The rationale for the change was that dividends are paid from income that has already been taxed once at the corporate level. It means the total top federal tax rate on dividends, including the 35% corporate tax, is currently 45% (the net received is 85% of 65%).

Even with the tax break, that's still higher than the top 35% rate of personal income tax.

That's bad enough, but even if the Bush tax cuts are renewed before the "fiscal cliff" strikes at the end the year, investment income will suffer an additional 3.8% tax starting on January 1 to pay for Obamacare.

That means the total tax on dividends could jump to a whopping 47.2%.

To continue reading, please click here...

Six Dividend Stocks to Hold Forever

By Martin Hutchinson, Global Investing Specialist, Money Morning - July 18, 2012

Investor. Now there's a word you don't hear much these days. "Buy and hold," they tell us, has gone the way of the dinosaur.

Today, it's all about the fast money. In the market, out of the market... this stock, that stock...

Of course, that's perfectly fine for traders. The good ones earn small fortunes that way. But for folks who don't have that kind of experience, being nimble is simply an invitation to be whipsawed by the markets.

You may be one of them.

For instance, are you fed up with stock recommendations that only seem to last a couple of weeks?

Or do you constantly find yourself buying on a day when the market is hot, because you feel enthusiastic, only to end up selling on a bad day, because the same stock suddenly looked less attractive?

If so, there's a solution to all this day-to-day madness. Despite the rumors of its demise, there are still stocks you can buy and hold forever.

Of course, seasoned income investors have known this for years. That's why the truly rich don't spend their days watching the financial news and trading stocks. They're too smart for that.

They know that investing in steady-income producing dividend stocks is just as rewarding over the long haul.

How to Pick the Long-Term Winners

However, picking successful dividend-paying stocks is not as simple as buying only the stocks with the highest yield. In fact, the stocks with the highest yields are often the ones that trip up investors the most.

When it comes to buying stocks you can truly hold forever, what's important is the company's track record.

To continue reading, please click here...

How to Buy Foreign Market Dividend Stocks

By Don Miller, Contributing Writer, Money Morning - March 26, 2012

There's nothing better than buying stocks with strong upside and getting paid with cold, hard cash.

It's true here in the United States and in foreign markets all around the world.

As we showed you in last week's article, buying dividend stocks that deliver a steady and growing income stream is a great way to do just that.
But the U.S. isn't the only country with world-beating companies.

In fact, adding a few foreign market dividend stocks will diversify your portfolio and help you sleep better at night, no matter what the U.S. market does.

Here's what you need to know...

To continue reading, please click here...

How to Pick Winning Dividend Stocks

By Don Miller, Contributing Writer, Money Morning - March 22, 2012

Do you need more income? Join the crowd.

It seems everyone is scouring the landscape these days for decent income investments to beef up their monthly take-home - especially now with the price of gas and other everyday items skyrocketing.

But it's not too late to find great dividend stocks. You can still get cold, hard cash on a regular basis by investing in companies that reward loyal investors with substantial dividends.

In fact, if dividend-paying stocks aren't a major part of your portfolio, the odds of being successful in the markets are stacked against you.

Need proof?

An exhaustive study of stock market returns from 1871 through 2003 showed that over a 135-year period owning stocks and reinvesting the dividends produced 97% of all stock market returns. Meanwhile a paltry 3% was produced by capital gains.

Dividend stocks are safer too. The very same qualities that allow companies to pay steady dividends means they're much less vulnerable to broad market drops than your typical stock.

And right now corporate America is willing to pay even more in dividends.

Companies are on pace to pay a record $263 billion in dividends to shareholders over the next year even though the S&P 500 Index is still more than 10% below its peak, according to S&P Capital IQ reports.

"We're seeing good dividend increases across the board," Richard Helm of Cohen & Steers Dividend Value fund told USA Today.

Buying Great Dividend Stocks

It's no secret - a company's dividends play a major role in their performance. Yet many investors completely ignore this important fact.

But you can't just plunk your money down on any old dividend stock.

To continue reading, please click here...

Four Dividend Stocks to Put Money in Your Pocket

By Don Miller, Contributing Writer, Money Morning - January 12, 2012

Anxiety over the European debt crisis and distrust in the markets drove volatility in global stock markets to dizzying heights in 2011. The intense level of chaos, and record low bond yields, sent investors scrambling for stocks that deliver steady returns in the form of dividends.

Dividend stocks have long been regarded as "widow-and-orphan" stocks because they provide steady payouts and tend to fall less than others when times are tough. And when stock prices fall, dividend yields actually rise because they reflect a percentage of a stock's price.

In fact, investors seeking shelter from market volatility and economic cycles flocked to dividend stocks in 2011. And most held up much better than the Standard & Poor's 500 Index.

The top 100 highest-yielding stocks in the S&P 500 last year were up an average of 3.7%, before dividends, The Wall Street Journal reported. By comparison, the 100 lowest-yielding stocks were down 10% on average.

Meanwhile, some investors tapped into dividend yields of more than 4% -- more than double the feeble yields of 10-year Treasuries -- on the stocks of utilities, manufacturers, and telecom companies.

"The problem with going for capital growth is that you very often don't get it, and then you've got nothing - the investment just sits there," said Money Morning Global Investing Strategist and Editor of the Permanent Wealth Investor Martin Hutchinson. "Dividends are easy - you can drop them on your foot, as it were. All you have to do is figure out which companies are run by sharpies - and are paying dividends out of capital - and which companies have genuinely solid business models that aren't going away."

Still, buying dividend stocks can be tricky. Individual stocks are inherently risky because they are confined to one sector of the economy. As such, they tend to rise and fall along with the rest of their industry peers.

Many investors are solving that problem by turning to dividend exchange-traded funds (ETFs).

ETFs allow investors to capture income from a cross section of companies, without risking all of their capital on one sector. And because ETFs track broad categories of stocks rather than relying on active managers to pick securities, they provide some safeguards against loading up on the riskiest companies.

That said, here are four dividend stocks worthy of a look right now:

To continue reading, please click here...

Dividend Stocks: How To Profit From The World's Best Investment Protection

By Martin Hutchinson, Global Investing Specialist, Money Morning - October 14, 2011

Read More…

Investment Protection: These Dividend Stocks Yield Twice as Much as Treasuries

By Martin Hutchinson, Global Investing Specialist, Money Morning - September 13, 2011

Do you know what the ultimate investment protection is?

It's not gold, and it's certainly not Treasuries.

It's dividend stocks.

Companies that pay consistent dividends are in better fiscal shape than the U.S. government and the payouts significantly outpace those of Treasuries. The advantage over gold of course is that the yellow metal yields nothing - it's simply a store of value.

And yet dividend stocks also protect against inflation, since profits for the companies behind them tend to rise alongside prices.

To understand the advantages dividends can provide an investor during a down market, just look at the implosion of the dot-com bubble in 2000.

According to Morningstar research, the Standard & Poor's 500 Index lost 9%, while dividend-oriented mutual funds - including high-yielding stocks in the financial-services, mutual-fund and real-estate sectors - gained anywhere from 10% to 30%.

And I shouldn't need to remind you that dividends account for the majority of the stock market's returns.

A study by Yale economist Robert Shiller showed that in the 109 years from 1889 to 1998, the average real return on common stocks was 7%, of which 4.7% was represented by dividends.

While stock prices have been plunging, dividend payments are rising. Through Aug. 31, 243 companies in the Standard and Poor's 500 Index increased or initiated a dividend payment. In fact, dividend payments are expected to end 2011 up 18% from 2010.

That's the case for dividend stocks. Now I'm going to give you some potent investment ideas to help you get on board.

Investing in Dividend Stocks

Generally speaking, there generally are two types of dividend stocks. There are large blue chips, which have a reliable but modest payout. And then there are the obscure companies, which have a higher yield but less safety.

In the first set you'll find companies like

to continue reading, please click here...