Best US Dividend stocks for 2010

By: ispeculatornew
Date posted: 01.05.2010 (5:00 am) | Write a Comment  (3 Comments)

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It’s always interesting when I start looking for good stocks that will generate income through a regular dividend. I did the exercise today when looking for some good dividend stocks in the S&P500 index. There are many ways to do this but in my opinion, what you are looking for is:

#1-Stock that pays a high dividend yield (obviously)
#2-Stock that is growing its dividend or at least keeping it stable
#3-Stock that has decent earnings and should be able to keep up its dividend payments

There are of course many other factors that could be used but in my opinion, those are the most important ones.
To start off, here are the top 40 stocks in terms of dividend yield in the S&P 500:

TickerNamePriceDividend YieldPayout RatioEx-Dvd Date
WINWindstream Holdings Inc7.9812.55356.153/27/2014
FTRFrontier Communications Corp4.658.6298.643/5/2014
CTLCenturyLink Inc31.856.78231.483/6/2014
FEFirstEnergy Corp32.986.67119.432/5/2014
DODiamond Offshore Drilling Inc56.926.1567.542/13/2014
HCPHCP Inc36.325.78110.322/6/2014
HCNHealth Care REIT Inc53.575.71607.362/6/2014
POMPepco Holdings Inc19.135.6587.023/7/2014
ETREntergy Corp63.275.2569.572/7/2014
ESVEnsco PLC57.185.2528.613/13/2014
TAT&T Inc35.165.23141.351/8/2014
TETECO Energy Inc17.245.177.42/14/2014
VTRVentas Inc57.285.06238.423/7/2014
RAIReynolds American Inc49.995.04103.63/7/2014
EQREquity Residential51.875.01210.013/20/2014
TEGIntegrys Energy Group Inc54.41572.792/26/2014
MOAltria Group Inc38.39582.723/14/2014
SOSouthern Co/The41.114.94722/6/2014
PPLPPL Corp30.094.8954.543/7/2014
KMIKinder Morgan Inc/DE364.56116.281/29/2014
KIMKimco Realty Corp19.754.56356.183/31/2014
EXCExelon Corp27.394.53147.722/12/2014
RIGTransocean Ltd49.424.5334.812/19/2014
DUKDuke Energy Corp69.014.52100.422/19/2014
PCGPG&E Corp40.284.5295.713/28/2014
PEGPublic Service Enterprise Group Inc32.044.4956.313/7/2014
EDConsolidated Edison Inc55.284.4562.32/10/2014
AEEAmeren Corp36.164.42#VALUE!3/10/2014
LOLorillard Inc50.684.3473.632/26/2014
SCGSCANA Corp46.934.3361.83/11/2014
PMPhilip Morris International Inc87.134.3262.643/25/2014
VZVerizon Communications Inc49.144.32657.011/8/2014
PBCTPeople's United Financial Inc15.124.388.831/30/2014
PNWPinnacle West Capital Corp52.924.2975.481/30/2014
AEPAmerican Electric Power Co Inc46.744.2872.762/10/2014
MACMacerich Co/The58.894.21111.532/18/2014
DRIDarden Restaurants Inc54.374.0564.091/8/2014
XELXcel Energy Inc27.944.0157.673/18/2014
GASAGL Resources Inc47.233.9874.912/19/2014
DTEDTE Energy Co66.393.9562.013/20/2014
WMBWilliams Cos Inc/The38.573.94102.533/5/2014
KRFTKraft Foods Group Inc53.923.8918.053/27/2014
GRMNGarmin Ltd46.223.8964.783/13/2014
LEGLeggett & Platt Inc30.943.8865.33/12/2014
LLYEli Lilly & Co513.8453.482/12/2014
CMSCMS Energy Corp26.773.8166.742/12/2014
PCLPlum Creek Timber Co Inc46.513.78133.992/19/2014
PSAPublic Storage150.523.72114.783/10/2014
AIVApartment Investment & Management Co25.913.71#VALUE!2/19/2014
WECWisconsin Energy Corp41.343.750.582/12/2014
AVBAvalonBay Communities Inc118.233.62147.853/28/2014
CNPCenterPoint Energy Inc23.183.5882.972/14/2014
LMTLockheed Martin Corp148.663.5849.652/27/2014
IRMIron Mountain Inc30.353.56196.453/19/2014
MRKMerck & Co Inc50.053.5283.873/13/2014
DDominion Resources Inc/VA64.693.48373.092/26/2014
INTCIntel Corp25.963.4739.532/5/2014
NEMNewmont Mining Corp23.033.4736.873/14/2014
NUNortheast Utilities42.393.4771.42/28/2014
SESpectra Energy Corp35.623.4380.172/5/2014
PFEPfizer Inc30.633.468.92/5/2014
CVCCablevision Systems Corp17.933.35483.893/12/2014
MCDMcDonald's Corp97.033.3453.072/26/2014
FCXFreeport-McMoRan Copper & Gold Inc37.743.3139.011/13/2014
VNOVornado Realty Trust88.793.29265.312/5/2014
WMWaste Management Inc44.873.2580.583/4/2014
PBIPitney Bowes Inc23.33.2268.952/12/2014
CINFCincinnati Financial Corp52.373.2162.473/17/2014
SYYSysco Corp36.13.2165.994/2/2014
CVXChevron Corp124.913.226.142/19/2014
MCHPMicrochip Technology Inc44.753.17214.952/18/2014
SPGSimon Property Group Inc152.163.1586.842/10/2014
GEGeneral Electric Co28.033.1450.222/20/2014
RSGRepublic Services Inc33.23.1358.393/28/2014
DPSDr Pepper Snapple Group Inc48.723.1245.543/13/2014
KMBKimberly-Clark Corp104.463.166.463/5/2014
NEENextEra Energy Inc85.623.0852.332/26/2014
PAYXPaychex Inc45.533.0783.781/31/2014
EIXEdison International46.33.0728.483/28/2014
STXSeagate Technology PLC56.163.0628.182/10/2014
CLXClorox Co/The92.763.0660.061/27/2014
GISGeneral Mills Inc49.913.0546.791/8/2014
NINiSource Inc32.883.0466.612/5/2014
MATMattel Inc47.583.0355.082/18/2014
PLDPrologis Inc36.953.03#VALUE!3/13/2014
CSCOCisco Systems Inc22.453.0333.161/2/2014
ABBVAbbVie Inc52.813.0301/13/2014
SPLSStaples Inc15.893.02#VALUE!3/26/2014
KKellogg Co61.073.0164.722/27/2014
LYBLyondellBasell Industries NV80.282.9984.093/6/2014
MSFTMicrosoft Corp37.432.9935.192/18/2014
CACA Inc33.652.9748.483/3/2014
CAGConAgra Foods Inc33.72.9752.551/29/2014
HPHelmerich & Payne Inc84.082.9712.972/12/2014
PGProcter & Gamble Co/The81.412.9656.751/22/2014
HASHasbro Inc55.012.9155.621/31/2014
WUWestern Union Co/The17.252.924.543/13/2014
JNJJohnson & Johnson91.592.8860.892/21/2014
DOWDow Chemical Co/The44.42.88170.733/27/2014

The next step required looking at growth in dividends. A company that has diminished its dividend payment in recent times is generally more inclined to do so again. So I was looking to take out companies that recently declined their dividends. That took out 7-8 names.

This brings us to the final step, determining if the company is liketlyy to be able to pay this dividend in the medium term. The way I do this is to compare the earnings of the company to the dividend yield. For example, if a company pays out a 5% dividend yield but only makes 2.5% (of its price) in earnings, then that is not sustainable.

But if a company  makes 2$ per share of earnings and pays out half of that amount in dividends, it is more logical to expect the dividend to remain intact. Doing that exercise, here are the 8 names that came out on top:

TickerNamePriceEPSPE RatioPE Next YearSales GrowthAnalyst ratingBook ValueBetaRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg Growth  
AAPLApple Inc543.9340.0313.6511.249.24.33137.40.95184.728.629.52
RAXRackspace Hosting Inc36.730.7856.0451.4427.723.

As you can see, all of these names have a dividend yield over 5%, all but one have seen dividend increases in recent months and all are making more money thaan they are paying off. From there, it becomes more subjective and I might want to stay away from some names. For example, some might not like investing in AT&T because of its many problems and high level of competition. Other might want to avoid pharmaceuticals (Eli Lilly & Co)… But in my opinion, all of these are top 2010 dividend stock picks. Any thoughts?

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  3. Comment by Norma Friedemann — February 28, 2010 @ 10:28 pm

    Good stocks with good dividends

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