Top 100 Dividend Stocks – February 2012

avatar By: IS
Date posted: 02.01.2012 (5:00 am) | Write a Comment  (2 Comments)

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I’ve written a few times about how looking at dividend yield could be misleading. One part of the reason is that some companies end up paying more than they can afford to. FTR is one obvious example and I will discuss it a bit later but there are many more.

Can you believe that none of the top 20 companies in this chart have a payout ratio under 50%!! To me that is shocking.  Dividend investing is about much more than finding a big yield, it is about finding longer term stocks that will be able to increase their dividend yields over time.

I wrote about why dividend investing is not just a trend and I think that finding the right stocks to include is a critical part.

Today, we are back with our list of the top 100 dividend stocks from the S&P500 and there is no surprise in who is on top. I would caution greatly against investing based only off of a dividend yield though.

Frontier Communications Corp (FTR)

No big surprise again this month as Frontier Communications Corp (FTR) remains at the very top of our top dividend stocks in the S&P500 with a dividend yield over 17%.  Why is that yield increasing every month? 2 reasons:

-The stock’s price keeps diminishing
-No one expects the company’s dividend to actually remain so high

The dark side of course remains that the company is paying out much more than it is actually able to make, making that dividend everything but sustainable. Every month, I do more in-depth research to find dividend names and FTR has never come out on top of that research..!!

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FTR’s Dividend Payout History

FTR’s days at the top of this chart are nearing its end in my opinion. Not only is FTR going to likely announce a dividend cut later this month but if things keep up, it will not be able to remain in the S&P500… should be interesting! Next week, we will do further research on the 100 stocks listed here to determine which ones are more likely to do well in the long term both based on sustainability and the 20 things that we look for in dividend stocks.

In the meantime, here is the list!

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2 Comments

  1. Comment by JERRY ZIMMERMAN — February 4, 2012 @ 9:18 am
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    Thank you for this site. I use your info along with MSN Money to help make my decisions. Do you give any indication of Fair Value Price when you give info on stocks? I have not seen this. During this current run up in prices, I have missed out, always thinking things will soon fall apart “again”. I want to invest in good dividend paying stocks in the 20 to 40 dollar range. I am over 70 yrs young and want the dividends to live on and then to pass on to family. Thanks, jz

  2. Comment by IS — February 4, 2012 @ 9:44 pm
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    @Jerry- Thanks for the good words. What exactly do you mean by Fair Value Price?

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