Articles About Dividend Investing

Sell These 3 Soft Drink Sellers?


Overvalued describes a security with a market price that is considered too high based on the company’s fundamentals. For instance, a stock may be overvalued because investors have confidence in the company. A rise in investor confidence will surge the demand for the security, thereby increasing the market price. However, if the company’s balance sheet is not strong enough to support the market price, the stock will most likely decline in due term. Also, if the security is fairly valued and its price is not declining when the company’s fundamentals deteriorate, the security is most likely overvalued. Beyond a company’s fundamentals, analysts use the Dividend Discount Model (DDM) to assess the present value of a security based on its projected... more


Stock symbol(s): DPS,KO,PEP

3 Undervalued Stocks Based on Dividend Discount Model

The Dividend Discount Model (DDM) seeks to estimate the present value of a given stock based on the spread between the estimated dividend growth and a dividend discount rate. The projected dividend growth is estimated by taking into consideration the stock's dividend history. If a stock delivers an annualized dividend of $1.80 per share and has an actual dividend growth of 120% over the last 15 years, you can calculate the average growth at 8% per year. For the dividend discount rate, which is actually the return you expect on your money, you can calculate a proxy rate based on the dividend’s growth. For instance, when the $1.80 dividend per share (DPS) goes up to $1.94, which is an 8% growth, the $1.94 is actually worth $1.75 to you today, because if you had $1.75 today,... more


Stock symbol(s): BEN,CVX,T

Mid-Cap US Banks With Strong Dividends

Investors often seek for dividend growth in mid-cap stocks because they offer a better growth expectation than the large caps. Although large-cap stocks come to mind when considering solid business models, low earnings volatility, and sustainable dividends, there are mid-caps that can do equally well. I have never been exclusively focused on this area. The recent speculation regarding the proper timing for a QE (quantitative easing) from the U.S. central bank and the increased strain for the declining Chinese financial system, have both led to an increased level of market volatility. This article discusses three mid-cap, growth-oriented U.S. banks with a proven ability for revenue growth and free cash flows. Coupled with strong management that delivers long-term dividend growth,... more


Stock symbol(s): CFG,FITB,KEY

Australian Banks ADRs

Investors often narrow their investment decisions in the domestic stock markets, thereby missing some remarkable opportunities in the foreign markets. Although for novice investors it may seem like a daunting task to put money into an unknown area, savvy investors know that the foreign markets have hidden gems that can be discovered through ADRs. The American Depositary Receipts allow you to access foreign companies that trade on the NASDAQ or the NYSE and purchase their shares in U.S. currency. ADRs trade in the OTC markets like regular stocks and pay dividends. This article discusses two of the largest Australian Banks that trade in the OTC market. Their average payout ratio is 80% at an average yield of 7.0%. Although the ADRs have underperformed the market, both banks have... more


Stock symbol(s): ANZBY,ANZ.AX,CBA.AX,CMWAY

Sustained Dividend Payments With These Broadcasting Companies

Over the last decade, the broadcasting industry has seen a range of technological advancements in its television, radio, and digital services. Consolidation of individual broadcast stations into large networks as a result of loose ownership regulations has increased the industry competitiveness. The trend is expected to continue as there are low barriers to entry, thereby consolidating the industry. Major companies own and operate multiple stations nationwide by implementing cost cutting strategies through economies of scale and consolidation that limits employment growth. This article discusses three media companies operating in the Broadcasting industry. All three companies trade significantly above their 52 week-low, suggesting an upward performance trend. Entravision, the... more


Stock symbol(s): EVC,NXST,SBGI

2 British ADRs With Strong Dividends

For U.S. investors seeking to invest in non-U.S.-based companies, ADRs are the best solution. ADR stands for American Depositary Receipt and it represents 100% ownership to the foreign company. ADRs trade in over-the-counter (OTC) markets, are issued by U.S. depositary banks and are typically equity rather than debt or money market assets. ADRs can offer high dividends like common U.S shares and their prices mirror the price changes in the foreign market. This article discusses Aviva and Smith & Nephew, two British ADRs that trade in different industries. Both companies deliver strong results and are leaders in their sectors. Furthermore, they both demonstrate momentum and are great dividend income picks both for the short- and the long-term. ... more


Stock symbol(s): AIVAF,AV.L,SN.L,SNNUF

Booming Dividends In The Crude Oil Tanker Business

Crude oil tanker stocks can be a great way to boost the yield of an investment portfolio. Especially, for investors who like diversification, these investments are ideal to offer an additional income and trade off the losses incurred by other stocks. However, before selecting crude oil tanker stocks, investors need to be aware of how the oil tanker industry operates as well as the pros and cons of each company since the tanker business can be highly risky. This article discusses three small caps that operate in the Crude Oil Tanker Industry. All three companies have an average dividend yield of 11.2%, which is above the industry average of 7.52%, and an average payout ratio of 144%, slightly lower than the industry average of 187%. Even more impressively, their average beta is 0.96... more


Stock symbol(s): NAT,SFL,SSW

Is There Any Energy Left In These Canadian Dividend Stocks?

The recent oil price collapse has had a great impact on the Canadian economy, even beyond the energy sector. Insurance companies and telecom firms confirm that the major concern of the energy sector is spreading. There are cases of companies that have achieved record profits in the previous years, yet now they experience a decline in their earnings, which inevitably leads to downsizing and the sharp cut of exploration investments. Undoubtedly, companies that directly supply the oil, gas and mining industries have experienced the hardest hit. However, there are companies like the ones discussed in today’s article that have delivered strong results in the third quarter of 2015 and are expected to continue to deliver strong cash flows and shareholder value in the coming... more


Stock symbol(s): ALA.TO,ATGFF,FTS.TO,IPL.TO,IPPLF

3 Small Caps That Are Big Players in The Dividend Field

Investors select small-cap stocks because of their growth potential. A small company with the ability to grow into a massive corporation is more likely to offer early investors tremendous returns than an already established company that potentially faces debt or corporate restructuring issues. The stock market offers a wide array of small caps that are big players, often mispriced, but definitely a solid bet for dividend investors. This article discusses three small caps that trade in different industries. Although all three companies strongly underperformed Nasdaq and NYSE on YoY basis, they consistently deliver strong results. These companies deliver high-yielding income payouts, well above their industry averages, suggesting solid dividend payments. If fact, such investments can... more


Stock symbol(s): APLP,BRC,CPTA

Running Up Dividends In Sporting Goods Retailers

Consumer purchases of sporting goods in the U.S. have increased 28.7% in the period 2005 – 2015 ($50.35 billion to $64.8 billion) and 21% in the period 2010 – 2015 ($53.56 billion to $64.8 billion). Furthermore, in spite of the shorter holiday shopping season and the unusually warm weather, the sporting goods industry remained strong and healthy. Through promotions, discounts and differentiated products, the sporting goods retailers have delivered strong Q3 2015 results and remain a good pick for dividend investors. This article discusses three sporting goods retailers with different market caps and differentiated products. Their average dividend yield is 2.4% (average yield of consumer goods 2.22%) and their average payout ratio is 36.2% (retail apparel industry 23.74%).... more


Stock symbol(s): BGFV,DKS,FL