Considered passť during pre-2008 boom years (slow-poke pennies vs. sexy roadster growth stocks), and even laughable during the past two years of recession slash-and-burn, dividend stocks are finally creeping back onto the investment radar screens.
Last month, analyst Alan Brochstein noticed several clients cozying up to the dividend-friendly, utilities sector. Curious, he screened almost 100 utility companies and found† 10 intriguing possibilities to research further. †
Jim Cramer soon followed for stocks, favorably weighing in on nine dividend picks that included General Mills (GIS), Pfizer (PFE), and AT&T (T) as†his New Year’s welcoming gift. And this past week, even more pundits jumped on the dividend bandwagon, citing an improving economic climate as the reason to plunge.
This is good news for those looking to add beyond of covered calls but caution still calls for additional research before jumping in. One analyst recommends a very simple method:† “Ask if a company’s earnings are still growing because revenues are still growing or are earnings growing because they managed to reduce costs?”
Some recommendations for further research might include:
- $2.04/share dividend
- Future product line expansions
- 12% profit margin
- Almost 23% return on equity
- $1.96/share dividend
- A pharmaceutical heavyweight
- 18% profit margin
- 58% return on equity
Waste Management (WM)
- $1.16/share dividend
- Increasingly ‘green’ recycling focus
- 7.54% profit margin
- Almost 15% return on equity;
But keep in mind that the economy isn’t out of the woods just yet. As long as consumers continue a †bargain-savvy approach to shopping, WalMart (WMT) will remain a dividend stock possibility †- $1.09/share – despite a paltry 3.34% profit margin.
Want to know more? Check out this list of the 250 highest dividend yielding stocks around the world.