Update: Best Dividend Stocks for 2013 is posted
More in Best Stocks for 2013
2011 was an year of high volatility and nervous investors. Personally I believe that 2012 will be a great year for stocks, but still, nothing brings as much comfort as cold hard cash. The companies that regularly pay cash dividends are typically strong companies. Of these, best dividend stocks have a history of consistently increasing dividends, strong fiscal discipline and shareholder orientation. These characteristics go a long way towards reducing the risk perception for an investor.
If you add in reasonable valuations (or even undervaluation) to the mix, then we are now talking excellent dividends and potential capital gains to boot. The following table lists the best dividend stocks for 2012 based on dividend yields, dividend growth rate and dividend sustainability based on the payout ratio. All the stocks in this list have a P/E ratio of 15 or below. I have restricted the list to stocks with market capitalization of at least $30 million (no upper limit). Care has been taken to represent many different industries to allow an investor to create a diversified portfolio from this list if so desired. This list does not include MLPs, REITs and other trusts to avoid the qualified dividends vs non qualified dividends tax issue.
An Excel spreadsheet of this table with additional data is also available for free download at the end of this article or in the box above.
|
Symbol |
Company Name |
Market Cap |
Dividend Yield |
Dividend Growth Rate |
|---|---|---|---|---|
| ISH | INTERNATIONAL SHIPHOLDING CORP | $139.1M | 7.79% | 43.10% |
| AM | AMERICAN GREETINGS CORP. | $481.8M | 4.62% | 13.40% |
| HRS | HARRIS CORP | $4.3B | 3.04% | 20.55% |
| LLL | L-3 COMMUNICATIONS HOLDINGS INC | $6.7B | 2.67% | 19.14% |
| STJ | ST. JUDE MEDICAL INC. | $11.1B | 2.41% | 80.01% |
| MSFT | MICROSOFT CORP | $219.0B | 3.07% | 14.87% |
| SBSI | SOUTHSIDE BANCSHARES INC | $361.9M | 3.28% | 15.87% |
| GD | GENERAL DYNAMICS CORP | $23.6B | 2.83% | 15.36% |
| INTC | INTEL CORP | $124.2B | 3.44% | 16.00% |
| WAG | WALGREEN CO | $31.0B | 2.55% | 23.76% |
| FCX | FREEPORT-MCMORAN COPPER & GOLD INC. | $36.3B | 2.61% | 9.86% |
| RTN | RAYTHEON CO. | $16.7B | 3.56% | 12.37% |
| AFL | AFLAC INC | $20.1B | 3.06% | 15.58% |
| NOC | NORTHROP GRUMMAN CORP | $15.3B | 3.42% | 10.76% |
| TGT | TARGET CORP | $34.7B | 2.32% | 20.11% |
| MDT | MEDTRONIC INC. | $39.9B | 2.56% | 17.13% |
| SPAN | SPAN-AMERICA MEDICAL SYSTEMS INC | $40.4M | 3.03% | 12.89% |
| STLD | STEEL DYNAMICS INC | $2.9B | 3.00% | 14.87% |
| PRU | PRUDENTIAL FINANCIAL INC | $24.0B | 2.85% | 8.83% |
| SPLS | STAPLES INC. | $9.9B | 2.82% | 12.70% |
| STE | STERIS CORP | $1.7B | 2.28% | 27.73% |
| MTSC | MTS SYSTEMS CORP | $634.9M | 2.47% | 17.84% |
| BAX | BAXTER INTERNATIONAL INC | $28.2B | 2.68% | 18.15% |
| CCF | CHASE CORP | $128.0M | 2.45% | 11.84% |
| ITW | ILLINOIS TOOL WORKS INC. | $23.1B | 3.02% | 11.38% |
| CAH | CARDINAL HEALTH INC | $14.2B | 2.10% | 19.03% |
| BDX | BECTON, DICKINSON AND CO | $15.9B | 2.42% | 12.93% |
| ALV | AUTOLIV INC | $4.7B | 3.39% | 3.99% |
| UTX | UNITED TECHNOLOGIES CORP | $67.2B | 2.59% | 12.62% |
| MGA | MAGNA INTERNATIONAL INC. | $7.9B | 2.98% | 5.64% |
| EEI | ECOLOGY AND ENVIRONMENT INC. | $67.9M | 3.00% | 6.96% |
| CR | CRANE CO. | $2.7B | 2.25% | 11.63% |
If you wish you can supplement this best dividend stocks screen with the earlier dividend stocks screen I ran for dividend stocks based on valuation. In that screen, valuation was the key criteria, with dividend income being a good compensation for waiting for the undervaluation to resolve. In this screen, dividend income is the primary requirement, with valuation being an additional filter to ensure that we are not overpaying for the stock. You may want to review this list to find some good stocks to buy for dividend income as well as capital gains, keeping in mind to choose from a variety of industries to get an appropriate level of diversification.
Get more information on this list of best dividend stocks
Be sure to download the attached Excel spreadsheet with additional data on these dividend stocks . It will also allow you to sort and filter for yield, industry, ratios and other metrics that you may want to do to narrow down your dividend stocks further. Or print it out and review it when you are offline. If you are constructing a predictable dividend income stream, the data will help you find dividend stocks with a variety of payout schedule. For further diversification, consider adding other high yield non dividend income stocks such as REITs or MLPs.
This article is included in the Curious Cat Investing, Economics and Personal Finance Carnival and Carnival of Wealth
