Top 100 Dividend Stocks – November 2011

By: ispeculatornew
Date posted: 11.01.2011 (3:46 am) | Write a Comment  (7 Comments)

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After 5 very difficult months, October turned out to be a record month in many different ways but as I write this, it looks like November is set to start off on a very bad note with markets down 2-3%..! Ah well, one good way to diminish portfolio volatility is to use dividend investing so today we are back with our monthly ranking of the top 100 dividend stocks in the S&P500.

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 of nearly 12%. 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. In fact, FTR is scheduled to announce its earnings on Thursday and Wall Street analysts expect the company to suffer a slight decline in earnings from $0.07 per share to $0.06… both numbers are much lower than its current $0.1875 dividend per share.

How Long Can FTR Keep This Going?

The most common answer I get is something along the lines of:

“How can I go wrong when the investment will be half paid within 5 years through the dividend?”

I understand what you mean but the company will not be able to keep this up for that long.  FTR has a 131% debt to market cap ratio and while revenues did jump after recent M&A activity, profits did not. I do expect the dividend to take another hit in the near future.

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FTR’s Dividend Payout History

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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  1. Comment by George — November 1, 2011 @ 7:34 am

    I greatly appreciate the information provided in this blog. May I suggest that in your list you alos put in two more columns with the 1 and 5 yrs divident growth rate. This will significantly enhance the information and help everyone make better choices in selecting if the want to go for the high yield now or select a company that continuously increases their divident rate.

  2. Comment by IS — November 1, 2011 @ 6:31 pm

    @George – Thanks for the idea & comment. I will take a look but would suggest signing up for our newsletter. It’s difficult to check growth rates for so many stocks so I prefer to do further analysis on a few of them. Will look into it though. Thanks for the comment.

  3. Comment by awake — November 3, 2011 @ 4:04 pm

    Isn’t HCN’s payout ratio too high @ 554.64?

    Your book mentions it should not be more than 75%. Does this mean that HCN price is not sustainable at what it currently is?

  4. Comment by awake — November 3, 2011 @ 4:21 pm

    also how do you calculate your dividend yield and payout ratio (you can use FTR as an example)

  5. Comment by IntelligentSpeculator — November 4, 2011 @ 3:27 pm

    @awake – Well payout ratio is basically dividend/earnings per shares (EPS) and FTR has paid $0.75 of dividends in the past year but made only $0.21 or so…

    And yes, HCN would be unsustainable at the moment:)

  6. Comment by awake — November 8, 2011 @ 2:26 pm

    HCN issued out about 1.5 mil shares out last week and their payout ratio is now 94%. Did the issuing out of shares cause this?

  7. Comment by Intelligent Speculator — November 8, 2011 @ 7:08 pm

    @awake – Not sure, I will have to look into it, it could have a small impact but nothing significant.

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