Top 100 Dividend Stocks – May 2012

By: ispeculatornew
Date posted: 05.01.2012 (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 added more numbers to back that claim up:)

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)

FTR’s dividend yield is down under 10%. It has declines because the dividend was cut in more than half in recent months but the dividend yield remains high because the stock is also in free fall. Winning proposition right? I added an interesting chart below that will give you a good idea.

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FTR’s Dividend History

You could probably say that looking at the stock price should not be the main priority… fair enough right? Let’s take a look at FTR’s dividend history..it’s not convincing at all, the dividend has been reduced twice in the recent past already!!:

FTR’s Dividend Payout History

Ok but are more dividend declines to come? Let’s take a look at how much profits FTR is able to make per share and compare it to what it is paying out in terms of dividends. As you can see

 

FTR’s days at the top of this chart are nearing its end in my opinion (of course, it’s not the first time I’ve said this). Not only is FTR going to likely continue to reduce its dividend but its stock is also likely to keep sinking.. not a winning proposition right?! 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 Hans — May 1, 2012 @ 5:32 am

    IS, the gap for CenterPoint Energy has broaden recently.

    About, two years ago, it was paying nearly 80% of earnings to shareholders for a dividend.

    Now that number is about 25%, as earnings for the trailing 12 months is $3.17. What accounts for this massive increase in earnings, I do not know.

    If this is because of normal business operations, this stock is a buy at $20.oo and a yield of 4%.

  2. Comment by Hans — May 1, 2012 @ 5:42 am

    Another one for your consideration, IS, is Seadrill (SDRL) with a yield of 8.18%. Earnings of $2.86 and a dividend of $3.20, trading at $39 and change.

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