Category Archives: chl

Top Ranked High Yield & High Dividend Growth Stocks

On Tuesday I summarized a study showing the performance of high yield, high dividend growth stocks.  The study showed that stocks with relatively high yields and relatively high 3 year dividend growth rates have historically outperformed stocks with lower yields and lower dividend growth rates.

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I used data provided by DRIP Investing to filter for stocks with high yields and high dividend growth rates.  The data is as of the beginning of December and includes all Dividend Champions, Contenders, and Challengers.  Dividend Champions are stocks that have increased dividends for at least 25 years, Contenders have raised dividends for 10-24 years, and Challengers have raised dividends for 5-9 years.  In other words, I started with a list of stocks that have raised dividends for at least 5 years straight.  The rational is to start with a list of stocks that have a relatively long history of raising dividends and a consistent dividend policy.

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Using this list of 449 stocks, I then sorted the stocks into quintiles based on dividend yield and 3 year dividend growth.  Stocks which were in the top quintile in both yield and 3 year dividend growth are listed below.  The list contains only 15 stocks out of a possible 449 and should serve as starting point for further investigation.

Company Ticker Yield 3 Year Dividend Growth %
Altria Group Inc. MO 5.72 18.33
UniSource Energy Corp. UNS 4.56 20.12
Alliance Holdings GP LP AHGP 4.81 22.64
Empresa Nacional de Electricidad SA EOC 4.58 26.27
Genesis Energy LP GEL 6.55 17.01
Lockheed Martin LMT 5.12 21.55
National CineMedia Inc. NCMI 6.75 33.89
National Presto Industries NPK 8.73 28.96
PennantPark Investment Corp. PNNT 10.57 41.96
Spectra Energy Partners LP SEP 6.21 78.28
Targa Resources Partners LP NGLS 6.21 35.51
Teekay Offshore Partners LP TOO 7.17 18.21
Telefonica S.A. TEF 11.42 24.16
Textainer Group Holdings Ltd. TGH 5.17 70.43
Triangle Capital Corp. TCAP 10.38 18.97

It should be noted that the study referenced also showed that those stocks in the 2nd highest yield quintile and highest dividend growth quintile actually performed better than those in the highest yield/highest dividend growth quintiles.  My hypothesis is that the highest yielding stocks have yields reflecting expectations of an uncertain earnings future or unsustainable dividend. Therefore, those stocks with marginally lower yields may have more certain futures while still having the added value of a relatively high yield compared to the entire universe of stocks.

The stocks in the second highest yield quintile and the highest 3 year dividend growth rate quintile are listed below:

Company Ticker Yield 3 Year Dividend Growth %
Nucor Corp. NUE 3.68 31.73
Novartis AG NVS 4.35 22.50
Southside Bancshares SBSI 3.32 18.71
Westwood Holdings Group Inc. WHG 3.89 18.17
Avista Corp. AVA 4.40 18.89
China Mobile Limited CHL 4.10 18.10
CMS Energy Corp. CMS 4.02 48.88
Darden Restaurants DRI 3.61 24.55
Digital Realty Trust DLR 4.28 19.22
Greif Inc. A GEF 3.60 20.26
Hanover Insurance Group (The) THG 3.33 35.72
Healthcare Services Group Inc. HCSG 3.52 28.73
NV Energy Inc. NVE 3.39 41.16
Rogers Communications Inc. RCI 3.83 58.13
Strayer Education Inc. STRA 4.11 35.29
Tower Group Inc. TWGP 3.57 46.12

Disclaimer: No current positions in stocks mentioned. Please note that Scott’s Investments and its author is not a financial adviser. Please consult your own investment adviser and do your own due diligence before making any investment decisions. Please read the full disclaimer at the bottom of Scott’s Investments.

15 High Yield, Dividend Growth Stocks

I have published a new article on Seeking Alpha, 15 High Yield Dividend Growth Stocks.  In the article I feature RBCAA (Republic Bancorp) and DRI (Darden Restaurants)

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12 High Yield, Rising Dividend, Low Payout Stocks

Below is a list of 12 stocks yielding more then 3% with a dividend payout ratio less than 70% as of the close on February 24th.  In addition, I required the stocks have a recent history of rising dividends. I looked for Dividend Percent Change, Year Over Year (%) > 10, Dividend Growth Rate, 3 Years (%) > 15, Dividend, 5 Year Growth Rate (%) > 20.  The screen was done using stockscreen123.   The list includes some familiar names such as Lockheed Martin, China Mobile, and McDonalds.  

There are also some small cap names which may fly under the radar such as Life Partners (LPHI), with a market cap of around $300 million.  Taking a closer look at LPHI on Finviz, it has 0 long term debt and a PEG of .80 with a history of high returns on equity and investment.  It is engaged in the secondary market of ‘life settlements’ which involves purchasing life insurance policies at a discount to their face value for investment purposes.  LPHI receives a fee for facilitating these transactions.  A copy of this size could carry additional risks, so I always try to have a stop loss or trading strategy in place prior to purchasing any security.

No disclosures

Ticker Name Last Trend Yield Div5Y Cgr% Pay Ratio
CHL China Mobile Ltd. (ADR) 49.45 Here 3.57 44.75 42.88
CTL CenturyTel, Inc. 35.28 Here 7.98 58.02 60.2
GEF Greif, Inc. 49.45 Here 3.08 38.34 66.42
HCBK Hudson City Bancorp, Inc. 13.31 Here 4.53 22.03 58.92
LLTC Linear Technology Corporation 27.61 Here 3.4 25.16 62.1
LMT Lockheed Martin Corporation 77.56 Here 3.28 20.79 30.03
LPHI Life Partners Holdings, Inc. 20.15 Here 4.99 26.48 13.54
MCD McDonald’s Corporation 65.26 Here 3.39 30.1 49.12
MSA Mine Safety Appliances 24.74 Here 3.9 29.31 47.76
SAFT Safety Insurance Group, Inc. 37.1 Here 4.35 36.31 37.03
TEF Telefonica S.A. (ADR) 69.21 Here 6.48 31.95 61.22
TNP Tsakos Energy Navigation Ltd. 14.83 Here 4.05 38.75 33.13
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Hump Day Investment Articles: Gold, China, Deflation, Taxes and More

I’d like to get away from posting links to so many articles, but I’ve been scouring the web and my inbox of late and found some recent articles of note and worthy of passing on:

Deep reading from Eclectica’s November Fund Commentary, an excerpt:

family:Verdana;">Japan has championed both Friedman and Keynes. They have built bridges to nowhere and dropped Yen notes from helicopters for twenty years and still they have nothing to show for it. Clearly the additional return from Yen debt in Japan is close to zero and it exposes the nightmare of interventionists everywhere: it may just be that there are no policy remedies for a debt deflation. So to elaborate further, our chances of financial success are greatest under conditions where investors believe government spending will succeed but in reality it fails.

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Via The Big Picture, family:Georgia, 'Times New Roman', Times, serif;" >David Rosenberg asks the question: Is Gold a bubble? The historical gold/spx ratiochart puts it in perspective:
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Here are five ways that you could make the current dollar-renminbi peg your friend and put the future appreciation of the Chinese currency to work for you:

  • You could buy an actively managed mutual fund. I personally own shares in Matthews China (MCHFX). Matthews funds have a long history of kicking the tires in Asia, and there’s good value to an investor in paying the 1.23% expense ratio to get that expertise. Here’s the company’s this)" href="http://www.matthewsfunds.com/" style="text-decoration: none; background-color: transparent; color: rgb(7, 81, 154);">Web site.
  • You could buy an ETF. I’d suggest the iShares FTSE/Xinhua China 25. With one buy, you get exposure to the big boys of China’s economy, including China Mobile (CHL, news, msgs), China Life (LFC, news,msgs) and PetroChina (PTR, news, msgs).
  • You could buy a big hunk of the growing market for consumer financial products by buying shares of China Life. The company has about 50% of the still-very-young insurance market in China. But as China gets wealthier and older — by 2050, a higher percentage of China’s population will be 60 or older than the United States’ — more people will look to consumer financial products such as life insurance to provide for old age and to provide security to the next generation.
  • You could buy into the continued emergence of a consumer economy in China by buying shares of Ctrip.com (CTRP, news, msgs), the largest online travel company in China. On Nov. 11, the company reported an 80% increase in third-quarter profits on a 41% jump in hotel reservations and a 45% gain in flight bookings.
  • And you could buy into China’s huge need for water and water infrastructure by buying shares of Duoyuan Global Water (DGW,news, msgs), a supplier of water treatment equipment. On Nov. 9, the company reported that third-quarter revenue had climbed 31% from the third quarter of 2008, gross margins had climbed to 49.5% from 46.8% and operating income was up 31.1%. The company divides its business into three product lines: wastewater treatment equipment, circulating water treatment and water purification equipment.

You probably have other China stocks that you like. Just remember that to get the biggest bang out of the eventual end of the dollar-renminbi peg, you should look for Chinese companies that do the bulk of their business inside China in renminbi.

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Want to know who pays income taxes in the US? Good chart from mint.com, courtesy of The Big Picture again.

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Donald Coxes gives portfolio/investment insights for November (courtesy of Investment Postcards):

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The November edition of Donald Coxe’s Basic Points research report (subtitled “The Power of Zero”) has just been published. His investment recommendations, as summarized in this document, are listed in the paragraphs below, but I do recommend you also read the full report at the bottom of the post. (Also note that Donald’s weekly webcasts can be accessed from the sidebar of the Investment Postcards site.)

1. Remain underweighted in US equities-as a percentage of total equities within global portfolios, and as a percentage of assets in US balanced portfolios. Underweight US bonds in global portfolios.

The Obama long-term financial projections for the US are high risk and unsustainable. Forthcoming elections-or a currency crisis-could induce some discipline, but within the OECD, the US should probably no longer be accorded top ranking for bonds and stocks.

2. Within the US market, underweight US economy-related stocks and overweight stocks tied to global economic activity.

Watch the performance of the KRE compared to both the BKX and S&P. As long as the KRE underperforms both of these indices, US-economy-related stocks remain suspect.

3. Overweight Emerged Markets (such as China, Brazil, India, and Korea) within global and international equity portfolios.

These markets should no longer be routinely discounted heavily for political risk or accounting practices relative to the US. The credibility gap has narrowed in the past year.

China continues to report robust economic activity and skeptics continue to proclaim-as they have for years-that it’s unsustainable. The time to sell China, and, for that matter, base metal and energy stocks, is when the last remaining Sino-skeptic has become unemployed.

4. Overweight the precious metal miners relative to bullion or the ETFs.

The time to overweight the ETF is when precious metal prices have entered corrections.

The XAU and other gold stock indices have underperformed bullion for the past two months because of a succession of bad news announcements for such heavyweights as Barrick, Kinross and Agnico-Eagle. True, we can’t be sure there won’t be more reports of disappointing execution among the miners, but they have the reserves in the ground, and the best of them have “unhedged reserves in politically-secure areas of the world”. Investors who believe current prices could hold should do NAV calculations on the miners based on current gold and silver prices, and they will see excellent opportunities in the stocks.

5. Overweight the leading agricultural stocks. The farm equipment, seed and fertilizer stocks are core investments for the next cycle.

With one of the coldest and wettest Octobers on record, Midwest farmers’ crops at October-end were overdrenched, overdue and overrun with blights and moulds. Recent warmer and dryer weather has improved yields, and the heaters are working overtime to dry out what has been harvested-and corn and soybean prices have pulled back slightly from their recent highs.

Global carryovers will not increase this year, which means world food “surpluses” remain precarious-as evidenced by the sharp run-up in rice.

6. The base metals stocks have been the global commodity stars. The best stock market values now could be in the small-caps that are long on ore and short-or nil-in earnings.

In retrospect, we should have recommended overweighting in this sector, but we were spooked by the collapse of the Baltic Dry Index and its subsequent failure to rally-and the relatively high levels of inventory on the LME. It appears that China has used some of its surplus dollars to get China overstocked on metals.

7. Overweight Canadian oil sands stocks within equity portfolios.

The Canadian oil sands stocks continue to suffer bad press among the defenders of the planet about alleged environmental misdeeds and risks. Each dead duck listed in shocked reports sent across the world has been worth millions in reduced market cap for the companies. (The actual total number killed in this supposed replay of the Exxon Valdes is what a few hunting parties would collectively bag on a good weekend.) A major Canadian institution recently joined this parade of the super-chic by publishing a supposedly unbiased study on oilsands emissions that was prepared by two of that nation’s pre-eminent greenhouse gasbags. The institution could have achieved the same results by retaining Gore-but Gore costs more. Treat those fashionable emissions with caution-and treat your portfolio to oil sands stocks.

8. Overweight Canada in both equity and fi xed income portfolios, and remain long the loon against the greenback.

In recent global rankings, Canada ranked #1 in the G-7 for its central bank, its private banks, and its Minister of Finance (who is the longest-serving in the G-7-a remarkable feat for a minister in a minority government). The principal knock on Canada is that it is dull. Dull has become the new shiny.

9. In balanced portfolios with an equity bias, do not hold high Cash exposures. Hold long-duration, high-quality bonds.

If this rebound becomes a sustained boom, you will lose-rather modestly-on this exposure, but your equity holdings will appreciate substantially, and you will be a net winner. If it becomes a bust, you will win on the bonds, thereby reducing your overall portfolio loss. Long bonds nowreduce short-term cyclical risk. As of October, speculators were hugely short 30-year and 10-year Treasurys and hugely long 2-year Notes-consistent with a bullish call on stocks and the economy. If that call swings to bearish, there will be a rush to the long end.