Best Dividend Stocks for 2013

What are the best dividend stocks in the US in 2013?

As an income investor, you look for dividend paying stocks with nice yield, but you also worry about whether the yield can be sustained. You look for stocks that can not only pay consistent dividends, but also have a history of dividend growth as well. Despite the potential for tax increases coming up, dividends still form an integral part of investing, specifically if you manage a 401K or an IRA.

We originally ran this screen at the beginning of 2012 and we came up with 32 dividend stocks. For the 2013 edition, we present to you 62 of the well chosen stocks that can form the core of your income portfolio in the new year. There are many stocks from the 2012 list that no longer make the cut, and of course since the list is expanded, there are many new stocks as well.

Our definition of the best dividend stocks is a little different. We do not blindly hunt for yield and we try to keep the selection well diversified across multiple sectors and industries. The way we do this is to pick out the top dividend paying stocks in their respective industries as defined by valuation, yield, dividend growth and dividend coverage (ability to pay the dividend without dipping into vital working capital).

So for example, you will find Ford Motor Company in this list. But the stock has not had any dividend growth in the last 5 years. Despite this fact, if you want an exposure to the Automobile Manufacturing sector, Ford is the best dividend paying stock in that industry. There is something to be said about picking the best dividend stocks without any regard to the industry or sector. There is however, much more that can be said about diversifying your portfolio.

You could build a well diversified income portfolio from the selection below (be sure to download the excel spreadsheet from the bottom of the article that has way more data to help you with your asset allocation decisions).

Stock Company Dividend Yield Dividend Growth (5 yr)
STX SEAGATE TECHNOLOGY 4.68% 26.19%
WU WESTERN UNION CO 3.92% 65.72%
NICK NICHOLAS FINANCIAL 3.83% 51.27%
RES RPC INC. 2.87% 29.20%
SWY SAFEWAY INC 4.27% 20.46%
RBCAA REPUBLIC BANCORP INC 3.17% 8.45%
CALM CAL MAINE FOODS INC 3.06% 93.00%
HRS HARRIS CORP 3.18% 19.79%
GES GUESS ? INC. 3.26% 20.11%
ESV ENSCO PLC 2.61% 71.88%
KLAC KLA-TENCOR CORP 3.55% 21.67%
THG HANOVER INSURANCE GROUP INC (THE) 3.36% 24.57%
CMI CUMMINS INC. 2.01% 31.95%
SBSI SOUTHSIDE BANCSHARES INC 3.78% 16.29%
CPA COPA HOLDINGS SA 2.24% 46.61%
RTN RAYTHEON CO. 3.56% 14.42%
CSX CSX CORP 2.80% 22.87%
HLF HERBALIFE LTD 2.52% 43.10%
PRE PARTNERRE LTD. 3.05% 7.59%
STJ ST. JUDE MEDICAL INC. 2.89% 83.31%
LLL L-3 COMMUNICATIONS HOLDINGS INC 2.61% 14.87%
SHS SAUER-DANFOSS INC 3.52% 14.22%
ALTE ALTERRA CAPITAL HOLDINGS LTD 2.82% 14.87%
NSC NORFOLK SOUTHERN CORP 3.43% 13.97%
STE STERIS CORP 2.26% 25.93%
DGX QUEST DIAGNOSTICS INC 2.10% 24.57%
ABC AMERISOURCEBERGEN CORP 2.03% 41.14%
CAH CARDINAL HEALTH INC 2.77% 18.04%
CNAF COMMERCIAL NATIONAL FINANCIAL CORP 4.38% 5.39%
MGA MAGNA INTERNATIONAL INC. 2.42% 8.85%
MW MEN’S WEARHOUSE INC. (THE) 2.15% 24.57%
TGT TARGET CORP 2.29% 20.79%
IPHS INNOPHOS HOLDINGS INC 2.95% 15.54%
UNP UNION PACIFIC CORP 2.27% 25.69%
DE DEERE & CO 2.18% 12.97%
PH PARKER-HANNIFIN CORP 2.01% 14.32%
CASC CASCADE CORP (Toyota is buying Cascade Corp) 2.16% 14.22%
MDT MEDTRONIC INC 2.43% 15.77%
ETN EATON CORP 2.97% 12.06%
BDX BECTON, DICKINSON AND CO 2.55% 15.10%
NUS NU SKIN ENTERPRISES INC. 1.81% 13.75%
DOV DOVER CORP 2.20% 11.84%
LARK LANDMARK BANCORP INC 3.56% 5.00%
JWN NORDSTROM INC. 1.99% 14.87%
CNI CANADIAN NATIONAL RAILWAY CO 1.72% 12.30%
TIF TIFFANY & CO. 2.02% 16.36%
PFBI PREMIER FINANCIAL BANCORP INC 4.50% 1.92%
ALV AUTOLIV INC 3.38% 5.09%
KNX KNIGHT TRANSPORTATION INC 1.57% 14.87%
TDW TIDEWATER INC. 2.26% 10.76%
ROK ROCKWELL AUTOMATION INC. 2.39% 10.14%
BHB BAR HARBOR BANKSHARES 3.49% 4.13%
SRCE 1ST SOURCE CORP 3.22% 3.96%
WSM WILLIAMS-SONOMA INC. 1.97% 13.85%
SUP SUPERIOR INDUSTRIES INTERNATIONAL INC. 3.48% 0.00%
LOW LOWE’S COS INC. 1.81% 14.87%
MFI MICROFINANCIAL INC 3.32% 3.71%
FLXS FLEXSTEEL INDUSTRIES INC 3.05% 2.90%
VFC V.F. CORP 2.21% 9.61%
F FORD MOTOR CO 1.80% 0.00%
THFF FIRST FINANCIAL CORP/IN 3.25% 1.79%
CSS CSS INDUSTRIES INC. 2.93% 1.39%

 

How do you work with this list?

You obviously do not need to buy all 62 stocks in this list. Depending on your investment profile, and your existing holdings, you will pick and choose stocks to buy from this list. There are many ways you can do this.

  1. Choose a portfolio that covers stocks across multiple sectors,
  2. Choose a good mix of small, medium and large capitalization stocks, and,
  3. If you have monthly income needs, you can choose your portfolio such that there are a few stocks that pay out dividends every month of the year

We have made this easy for you. The spreadsheet attached to this article below includes data for Market Capitalization, Dividend Payment Schedule, Sector and Asset Class. You could sort and filter for this information if you wish, but to make it even more useful, we have already done the sorting and filtering and put the data on separate tabs for you to quickly jump to it.

So go ahead, download the file and start your due diligence and build your dividend stock portfolio for the new year.

download Download your file

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PS. This is the first in the series of screens I am going to post, almost one every day, for the rest of 2012 to help you find the best stocks you should be looking at for 2013. Want to get all the screens sent to your email soon after they are posted? Sign up for the free newsletter

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