Ever since savings rates hit rock-bottom lows, dividend stocks have come into vogue with income investors. Zeroing in on dividend stocks isn't difficult or time-consuming, but it certainly pays to know what makes a safe, high-quality dividend stock one you can hold on to for many years.
I've uncovered three stocks that fit the bill, each harnessing an enticing yield, a sustainable dividend payout ratio, and reliable dividend growth.
1. Illinois Tool Works (NYSE: ITW ) This industrial goods manufacturer is a card-carrying member of the S&P 500 Dividend Aristocrats, an elite group of blue chip companies that have raised their dividends for at least 25 consecutive years. Amazingly, Illinois Tool Works has increased its dividend for 49 straight years.�
The stock currently boasts a 2.3% dividend yield and recently grew its dividend by 5%. Illinois Tool Works' payout ratio, a measure that indicates how much of its net income is returned to shareholders in the form of dividends, is a very healthy 26%. This indicates the company has plenty of room to increase its dividend in the future.
Top 10 Shipping Companies To Invest In 2015: Philip Morris International Inc(PM)
Philip Morris International Inc., through its subsidiaries, engages in the manufacture and sale of cigarettes and other tobacco products in markets outside of the United States. Its international product brand line comprises Marlboro, Merit, Parliament, Virginia Slims, L&M, Chesterfield, Bond Street, Lark, Muratti, Next, Philip Morris, and Red & White. The company also offers its products under the A Mild, Dji Sam Soe, and A Hijau in Indonesia; Diana in Italy; Optima and Apollo-Soyuz in the Russian Federation; Morven Gold in Pakistan; Boston in Colombia; Belmont, Canadian Classics, and Number 7 in Canada; Best and Classic in Serbia; f6 in Germany; Delicados in Mexico; Assos in Greece; and Petra in the Czech Republic and Slovakia. It operates primarily in the European Union, Eastern Europe, the Middle East, Africa, Asia, Canada, and Latin America. The company is based in New York, New York.
Advisors' Opinion:- [By Rich Duprey]
Global tobacco giant�Philip Morris International (NYSE: PM ) announced this morning its second-quarter dividend of $0.85 per share, the same rate it's paid for the past three quarters after raising the payout 10% from $0.77 per share.
Hot Blue Chip Companies To Own For 2014: Colgate-Palmolive Company(CL)
Colgate-Palmolive Company, together with its subsidiaries, manufactures and markets consumer products worldwide. It offers oral care products, including toothpaste, toothbrushes, and mouth rinses, as well as dental floss and pharmaceutical products for dentists and other oral health professionals; personal care products, such as liquid hand soap, shower gels, bar soaps, deodorants, antiperspirants, shampoos, and conditioners; and home care products comprising laundry and dishwashing detergents, fabric conditioners, household cleaners, bleaches, dishwashing liquids, and oil soaps. The company offers its oral, personal, and home care products under the Colgate Total, Colgate Max Fresh, Colgate 360 Advisors' Opinion:
- [By Douglas A. McIntyre]
Some traditional brand powerhouses have lost ground in the Top 100 since 2009. These include BMW, FedEx Corp. (NYSE: FDX) and Colgate-Palmolive Co. (NYSE: CL).
- [By James Well]
Analysts��Consensus Position on Pfizer
Thirteen analysts including those at TheStreet, Thomson Reuters/Verus, Goldman Sachs, J.P. Morgan, Barclays Capital, Morgan Stanley and Argus Research are optimistic about the performance of Pfizer going forward and, hence, reiterated a consensus buy recommendation at an average target price of $31.78 per share. Last Wednesday, analysts at Goldman Sachs removed Pfizer from Goldman�� conviction buy list (CL) where Pfizer has been since Aug. 9, 2011, and placed it on the buy list but raised its price target from $34 to $35 per share. Jami Rubin, an analyst with Goldman Sachs, claimed that Pfizer has gone up by 82.5% since being added to the CL as against 53.9% for the S&P 500 during the period and, therefore, there was the need to replace Pfizer with AbbVie at a price target of $60 because they claimed AbbVie has greater upside at this time. - [By Dan Caplinger]
Lately, Johnson & Johnson has presented two different faces to investors. On one hand, the company has faced the challenge of dealing with a weak consumer-products business, as multiple recalls and close regulatory oversight of its production facilities have exacerbated J&J's problems. With its more focused consumer-goods business, Colgate-Palmolive (NYSE: CL ) has worked harder at taking advantage of international growth opportunities than many of its rivals, and Colgate's strong overseas sales, in comparison to J&J's international weakness, show the effectiveness of that strategy. In particular, Asia has been a focus point for Colgate, with revenue from the region having risen 9% year over year compared with less than 3% growth overall. Moreover, Latin America represents Colgate's biggest region for sales, with more than half again the revenue its U.S. segment produces.
Hot Blue Chip Companies To Own For 2014: Chevron Corporation(CVX)
Chevron Corporation, through its subsidiaries, engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. It operates in two segments, Upstream and Downstream. The Upstream segment involves in the exploration, development, and production of crude oil and natural gas; processing, liquefaction, transportation, and regasification associated with liquefied natural gas; transportation of crude oil through pipelines; and transportation, storage, and marketing of natural gas, as well as holds interest in a gas-to-liquids project. The Downstream segment engages in the refining of crude oil into petroleum products; marketing of crude oil and refined products primarily under the Chevron, Texaco, and Caltex brand names; transportation of crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car; and manufacture and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives. It a lso produces and markets coal and molybdenum; and holds interests in 13 power assets with a total operating capacity of approximately 3,100 megawatts, as well as involves in cash management and debt financing activities, insurance operations, real estate activities, energy services, and alternative fuels and technology business. Chevron Corporation has a joint venture agreement with China National Petroleum Corporation. The company was formerly known as ChevronTexaco Corp. and changed its name to Chevron Corporation in May 2005. Chevron Corporation was founded in 1879 and is based in San Ramon, California.
Advisors' Opinion:- [By Claudia Assis]
Big Oil shares were higher as well, with Exxon Mobil Corp. (XOM) �shares up 0.3%. Chevron Corp. (CVX) �shares rose 0.5%, while shares of ConocoPhillips (COP) �advanced 0.9%.
- [By Doug Ehrman]
In the following video, Fool.com contributor Doug Ehrman discusses how a change in U.S. policy on the export of crude could benefit certain oil stocks such as Exxon Mobil (NYSE: XOM ) and Chevron (NYSE: CVX ) .
- [By Tyler Crowe]
Even though the country has so much oil, it has struggled to keep up production growth and has asked for outside help. This week, Venezuela has signed financing deals with Chevron (NYSE: CVX ) , Schlumberger (NYSE: SLB ) , and Russia's Rosneft that will total $5.6 to expand production. The country hopes to increase production from 3 to 5 million barrels per day by 2015.
- [By Dan Caplinger]
Tomorrow, Chevron (NYSE: CVX ) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed kneejerk reaction to news that turns out to be exactly the wrong move.
Hot Blue Chip Companies To Own For 2014: Visa Inc.(V)
Visa Inc., a payments technology company, engages in the operation of retail electronic payments network worldwide. It facilitates commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses, and government entities. The company owns and operates VisaNet, a global processing platform that provides transaction processing services. It also offers a range of payments platforms, which enable credit, charge, deferred debit, debit, and prepaid payments, as well as cash access for consumers, businesses, and government entities. The company provides its payment platforms under the Visa, Visa Electron, PLUS, and Interlink brand names. In addition, it offers value-added services, including risk management, issuer processing, loyalty, dispute management, value-added information, and CyberSource-branded services. The company is headquartered in San Francisco, California.
Advisors' Opinion:- [By Chris Hill]
Shares of Visa (NYSE: V ) rose to an all-time high on Thursday after the company reported stronger-than-expected second-quarter earnings. Should investors buy Visa, or is MasterCard (NYSE: MA ) the better bet? In this installment of MarketFoolery, our analysts discuss Visa, MasterCard, PayPal, and the future of the payments industry.
- [By Ben Levisohn]
Stocks bucked their recent Monday weakness today as Visa (V), International Business Machines (IBM), United Technologies (UTX), Micron Technology (MU) and Vertex Pharmaceuticals (VRTX) gained. But your view of today likely depended on the index you were watching.
Agence France-Presse/Getty ImagesThe S&P 500 gained 0.5% to 1,872.34, while the Dow Jones Industrial Average rose 0.8% to 16.457.66. Those benchmarks were trumped by the Nasdaq Composite, which advanced 1% to 4,198.99, and the small-cap Russell 2000, which finished up 1.8% at 1,173.04.
The price-weighted Dow was given a boost by its big weightings in Visa, which rose 1.8% to $215.86, International Business Machines, which advanced 1.1% to $192.49 after Morgan Stanley named it a top alpha generator among mega-cap stocks, and United Technologies, which gained 1.8% to $116.83. United Technologies’ Sikorsky division agreed to pay $3.5 million to settle claims that it charged too much for spare parts. Micron Technology gained 8% to $23.66 after a positive report at RBC Capital Markets and Drexel, and Vertex Pharmaceuticals (VRTX) rose 4.3% to $70.72.
Deutsche Bank’s David Bianco notes that small-caps and non-mega caps need interest rates to stay low…
On 2014E EPS, Russell 2000 (R2000) PE is 23.6 and S&P 500 PE is 15.6. The relative forward PE of the R2000 vs. the S&P at 1.5x is amongst the highest since 1995. Within the S&P, the PE at non-mega caps is also demanding vs. history. The median trailing PE of S&P 500 stocks at 18.5x is 2 points higher than its average since 1983 and is well into the late 1990s range. EPS growth, while expected to accelerate, is unlikely to reach the mid to low teens pace of the last two cycles. Hence, we think small and non mega-cap stocks are more dependent on interest rates staying below historical norms to justify current valuations and are more susceptible to moderation in growth expectations.
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- [By Dan Caplinger]
Getty Images Holiday shopping season is in full swing, and smartphones, tablets, and other electronic devices once again top many shoppers' gift lists. Given how expensive many popular gadgets have become, one big question many shoppers are facing is whether or not to tack on an extended warranty to protect themselves should their electronic devices come to harm. They're Lining Up to Sell You Protection Retailers know that the best time to get you to pay to protect expensive items is while you are making a big-ticket purchase. For years, Best Buy (BBY), Sears (SHLD), Walmart (WMT), and other major retailers have sold extended warranty protection on high-priced electronics like computers and TVs. That coverage can be pricey, with Walmart having recently charged $65 for a two-year TV service plan and Best Buy offering two-year coverage on an $800 TV for $99.99 and five-year coverage for $179.99 . Appliance warranties can also be expensive, with Sears recently charging $280 for a three-year protection plan on a $950 refrigerator. Protection plans for smartphones and tablets are also popular. Apple (AAPL) offers its AppleCare for its devices. Coverage to extend an iPhone's warranty and other protections for two years will run you $99. Other companies have sought to offer more comprehensive coverage for electronic devices, with Protect Your Bubble offering phone and tablet insurance for $7.99 to $9.99 a month that covers not only mechanical problems but also common mishaps like damage from drops and liquid spills, as well as theft or loss. Many Items Have Built-In Protection What many consumers don't realize is how much protection against common problems they already have, even without buying extra. Nearly every purchase comes with at least limited warranty protection for mechanical defects. According to Consumer Reports, most issues that would qualify for coverage under extended warranties tend to happen during the initial warranty period, making the extended co
- [By Matt Thalman]
Before we get to the Dow's biggest losers of the week, let's review its top performer. Visa (NYSE: V ) gained 4.99% this past week, following a big gain on Friday after American Express reported better-than-expected results for the fourth quarter and a massive increase in customer spending. If the same spending trend holds true for Visa, it should see a huge boost in revenue and, more importantly, profits when it reports earnings on Jan. 30. �
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