5 Dividend Stocks Too Good To Be True?

By: ispeculatornew
Date posted: 10.13.2011 (5:00 am) | Write a Comment  (3 Comments)

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When you hear something that seems incredible and you think that you’ve found a great deal, it’s usually not. That is very much the case for investing in general and dividend stocks to be more specific:) Just think about Yellow Pages (YLO) and how it ended up crumbling or how FTR continues to be at the top of our dividend rankings but looks a lot less attractive under the surface.

Today, we took a deeper look to find some lesser known stocks that could be solid dividend plays. As is always the case, we encourage you to do further research on these names and will also likely be discussing some of these in our free newsletter, that you can sign up for here:



Back to our names! We started by using most of the 20 things that we look at when judging dividend stocks and dwindled down from thousands of names to 5! They probably have some flaws that we will find but for now, they look like great dividend plays. Here are some details of these 5 stocks:

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Let’s take a look at the patterns of these companies in recent years:

Terra Nitrogen Co LP (TNH)

Southern Copper Corp (SCCO)

TAL International Group Inc (TAL)

Navios Maritime Holdings Inc (NM)

Wayside Technology Group Inc (WSTG)

There Is No Free Lunch

As you can see, these companies have not been the most consistent dividend payers. That is a good part of the reason why you can get such high yields for companies that do appear to be healthy. I’m a big believer in finding stocks that can pay steady, sustainable dividends and increase those over time. These companies do seem to have the potential to achieve such records but they don’t have the history to back it up.

They Do Look Promising Though

All 5 of these stocks are paying a dividend that they can afford (reasonable payout ratio), have increased their total payout, sales and earninggs in the past 5 years and have a solid balance sheet (debt compared to assets). Doesn’t that cover most of what we would hope for? Isn’t it possible that the market just has not caught up with these hidden treasures? It certainly is! I would be very cautious and will certainly be spending more time on these names but I would love to hear more thoughts or opinions on adding these names that all have a dividend yield of 6% or more!

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3 Comments

  1. Comment by Andrew — October 13, 2011 @ 8:28 pm

    I looked at Terra Nitrogen but really its just a proxy on the commodity corn. If corn goes up it goes up, if corn goes down it goes down much like its part owner CF Industries.

    Personally I cannot forecast the direction of corn prices so I will stay away even with the massive dividend yield…

  2. Comment by IntelligentSpeculator — October 14, 2011 @ 5:12 am

    @Andrew – Very interesting, thanks for doing the research, have you looked at the others? Indeed, I would probably not want to have high correlation to the price of corn either!

  3. Pingback by Dividend Posts That You Missed — October 14, 2011 @ 6:01 am

    […] 1. 5 Dividend Stocks Too Good To Be True? @ IS. […]

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