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Ideas for Income Investors. High Dividend Stocks, Mutual Funds etc.
High Yielders For Dividend Investors
Posted by: Dr. Paul Price (IP Logged)
Date: September 19, 2012 07:55AM
Investors that are in search of a good dividend in the current marketplace can still find good yields from companies generating high dividend yields. There are a number of companies paying out solid yields in all sorts of industries. The companies vary from small players to Fortune 500 companies. Here are a few good dividend plays.
If you are looking for a good dividend yield, the telecommunications market is a good place to go. Vodafone (VOD) is one of the best yielding stocks on the market. Investors can currently get a $1.98 dividend payout from this telecommunications company. Vodafone is currently yielding 7%, which is an incredible payout for such a large company. Vodafone has a nearly 50% interest in Verizon wireless and serves more than 20 different countries. This multinational firm trades at 13 times earnings, 1.1 times book value, and under two times sales. Thirty two percent EPS growth and 15% operating margins make this company a decent value play as well.
It’s not surprising when a defense company makes a good dividend play and Lockheed Martin (LMT) is one of those companies. Lockheed Martin has a giant $4.00 dividend payout and a 4.3% yield which beats anything you will get on a savings bond. This is a pure income play since the company generates $3 billion a year in free cash flow but has a flat EPS growth rate. The P/E ratio is a little undervalued for the industry but not severely. At $91 a share, the stock trades at 14 times book value. The company does however have a solid history of repurchasing company stock which helps to create value for shareholders.
Not all of the banks have low dividend payouts. New York Community Bancorp (NYB) has a hefty 7.2% dividend yield which is great for a midcap bank. The company has managed to maintain its $1 dividend payout for the past seven years and has paid out a dividend for twenty straight years. This dividend is not likely to increase over the near term but investors can look forward to stead payouts as long as the loan portfolio stays stable and the bank’s growth plans go according to plan.
When in doubt, look to the energy sector for dividends. The energy sector is known for low growth rates, stable revenues, and consistent cash flows. Entergy (ETR) is an undervalued dividend dynamo. Entergy is currently yielding 4.9% and pays out $3.32 per share. The energy company trades at 12 times earnings, 1.3 times book value, 1 times sales, and 3.6 times free cash flow. The company has recently raised its dividend and been buying back company stock.
Stocks Discussed: VOD, LMT, NYB, ETR,