The Best Dividend Stocks for 2015

Which are the best dividend stock values that will potentially return superlative income and capital gains performance in 2015? The time to look for these ideas is now. The recent market declines have created some extraordinary values in the dividend paying stocks. We are also in the time of the year when many investors are looking at their tax plans and considering repositioning their portfolios for the year 2015. The following companies across a wide range of industry spectrum have been selected for their excellent dividend yield, history of above average dividend growth rates which are likely to continue based on their dividend coverage, and of course, valuations.

You will find that most of the stocks in this list are currently trading at very close to their 52 week lows. This is not a surprise as the broader market indices have not done much this year except to provide palpitations to anxious investors. As the readers of Value Stock Guide, you understand the value of patience. Coupled with good upfront research, and careful selection to maintain a diversified portfolio, these stocks should form a solid basis for a dividend portfolio. I run these screens to find ideas to recommend as part of the VSG portfolio to my members. A number of my members also maintain a dividend portfolio as part of their investment plan, and this screen in particular also helps them structure their dividend portfolio.

One way to create a diversified portfolio is to get exposure to a variety of industries and sectors. To help with this, let’s list these stocks by sectors

1. Basic Materials

Company Name Symbol Market Capitalization Dividend Yield (Annualized) Dividend Growth Rate (5 year avg) Dividend Coverage (EPS TTM/IAD) P/E (Price/TTM Earnings) Industry
AGRIUM INC. AGU $12.0B 3.59% 93.71% 1.9 14.5 Agricultural Chemicals
TRANSOCEAN LTD RIG $10.9B 9.95% 102% 1.9 5.7 Oil & Gas Drilling and Exploration

SDRL is no longer recommended as it has suspended its dividend and has been removed from this table

 

We all have seen the oil prices declining. There are indications that the supply is starting to exceed the demand while at the same time, OPEC is leaning towards keeping the production up to keep/gain market share. If the oil prices continue to soften, higher cost production will start to shut down. There may also be slowdowns in drilling and exploration activity. This explains the low multiples and high dividend yields being sported by the O/G drillers. Seadrill also has a few management challenges it is coping with.


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2. Consumer Goods

Company Name Symbol Market Capitalization Dividend Yield (Annualized) Dividend Growth Rate (5 year avg) Dividend Coverage (EPS TTM/IAD) P/E (Price/TTM Earnings) Industry
FORD MOTOR CO F $54.2B 3.58% 20.11% 3.2 8.7 Auto Manufacturers
TUPPERWARE BRANDS CORP TUP $3.4B 3.98% 25.32% 1.7 14.8 Packaging and Containers
NU SKIN ENTERPRISES INC. NUS $2.6B 3.17% 24.57% 3.8 8.7 Personal Products
COACH INC COH $9.7B 3.84% 35.10% 2.1 12.4 Textile, Apparel, Footwear and Accessories

 

3. Financials

Company Name Symbol Market Capitalization Dividend Yield (Annualized) Dividend Growth Rate (5 year avg) Dividend Coverage (EPS TTM/IAD) P/E (Price/TTM Earnings) Industry
WESTERN UNION CO WU $8.4B 3.16% 65.72% 2.9 11.1 Credit Services
BANCO LATINOAMERICANO DE COMERCIO EXTERIOR SA BLX $1.2B 4.60% 13.60% 1.8 12.4 Money Center Banks
BANK OF NOVA SCOTIA (THE) BNS $71.3B 4.01% 6.14% 2.3 10.2 Money Center Banks
TORONTO-DOMINION BANK (THE) TD $85.3B 3.64% 9.03% 1.8 11.7 Money Center Banks
ROYAL BANK OF CANADA RY $99.1B 3.67% 7.26% 2.1 12 Money Center Banks
MAIDEN HOLDINGS LTD MHLD $831.5M 3.86% 12.89% 2 13.3 Property and Casualty Insurance
SAFETY INSURANCE GROUP INC SAFT $891.1M 4.72% 11.84% 1.6 14.5 Property and Casualty Insurance
SUSQUEHANNA BANCSHARES INC SUSQ $1.9B 3.60% 12.47% 2.6 11.2 Regional Banks
RIVER VALLEY BANCORP. RIVR $52.7M 4.35% 1.84% 3 7.9 Regional Banks
NATIONAL PENN BANCSHARES INC NPBC $1.3B 4.18% 14.87% 1.7 14.1 Regional Banks
NATIONAL BANKSHARES INC NKSH $207.4M 3.69% 6.05% 2.2 11.5 Regional Banks
FIRST CAPITAL INC FCAP $63.1M 3.65% 3.13% 2.4 11.9 Regional Banks
PROVIDENT FINANCIAL SERVICES INC. PFS $1.1B 3.54% 6.40% 1.9 14.5 Regional Banks

 

Some of the banks in this list are very small so you need to consider the liquidity in the shares and also the fact that these banks tend to be heavily concentrated in a single geographical area and are therefore have risks aligned with the economic risks of the local area. Canadian banks appear to offer sound value and great income stream and should be actively considered.

4. Industrial Goods

Company Name Symbol Market Capitalization Dividend Yield (Annualized) Dividend Growth Rate (5 year avg) Dividend Coverage (EPS TTM/IAD) P/E (Price/TTM Earnings) Industry
STURM RUGER & CO INC. RGR $961.5M 4.16% 33.16% 2.5 9.5 Aerospace/Defense Products and Services
CHINA YUCHAI INTERNATIONAL LTD CYD $689.8M 6.64% 64.38% 2.6 5.9 Diversified Machinery
DEERE & CO DE $30.2B 2.85% 16.47% 4 9.4 Farm and Construction Machinery

 

Although China Yuchai is based in Singapore, its business is heavily dependent on China. Consider country risk if you would like to look into this stock deeper.

5. Services

Company Name Symbol Market Capitalization Dividend Yield (Annualized) Dividend Growth Rate (5 year avg) Dividend Coverage (EPS TTM/IAD) P/E (Price/TTM Earnings) Industry
COPA HOLDINGS SA CPA $4.4B 3.84% 59.67% 3.2 8.5 Regional Airlines
TEXTAINER GROUP HOLDINGS LTD TGH $1.8B 5.84% 15.36% 1.7 10.4 Rental and Leasing Services

 

This list of 25 of the best dividend stocks for 2015 includes many foreign names. If the USD were to weaken in the future, these stocks may benefit (for the US based investors). I have no opinion on the currency market but in any case low valuations afford a great deal of protection against capital loss should the global economy continue to be volatile. As usual, do your own due diligence before you invest any money in these stocks.

Comments

  1. says

    Yes, I have thought of the USD as weak for a long time (that is – something I don’t trust will hold its value). But then I look at the alternatives and they have big problems too. I wrote about it a few years ago (I decided even though the USD was bad, the other options did not look better):

    http://investing.curiouscatblog.net/2012/02/27/what-currency-is-the-least-bad/

    That is basically my same belief today, though China’s Yuan has become worse in my opinion (due to huge increase in debt). Economically I still think the Yuan probably looks best, but the political risks are very large. Economics if fun; many challenging questions to consider.

  2. says

    Very nice list, thanks. What do you think of Pfizer (PFE)?

    This statement seems outdated – “If the USD were to weaken further” – the USD hasn’t been this high in 3 or 4 years.

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