For the beginning of the year, I did some research on a lot of stocks and wrote the Best Dividend Stocks for 2012 eBook (you can download it for free here). This eBook includes 29 stocks (20 US and 9 Canadian) that have been showing very solid dividend metrics.
When I did my research, I was using the following filters:
Dividend Yield over 3% (because low dividend yield stocks are not of interest in the current market)
Dividend Payout Ratio under 75% (because we want sustainable dividend payouts!)
5 Years Dividend Growth positive (because we want companies that raise their dividend even considering 2008)
I used 2 filters: one on the US stock market and another one on the Canadian stock market. Today, I’m presenting the Best US dividend stocks and I’ll do the same thing with the Canadian market on Wednesday.
I was surprised to see that 182 stocks fit in my search criteria! And if I become pickier and drop the dividend payout ratio under 60% while increasing the 5 years dividend growth to 5%, I still get 91 stocks!
So if you are not convinced that there are opportunities in this market for 2012 with this data, I don’t know what you need to become a believer ;-). In order to be complete, my filters should have included other metrics such as P/E ratio, sales & earning growth over 5 years, etc. However, my goal was to filter through the market and find the strongest dividend stocks according to their dividend metrics. Obviously, more research on any of these companies is required before claiming it is the stock pick of the year. However, if you are looking for somewhere to start your stock hunting for 2012, I think this list is definitely a must.
Here are the Best US Dividend Stocks according to the criteria:
Among this list, I’m covering the following stocks in my eBook:
Avon Products Inc – AVP
AT&T – T
Black Rock Inc – BLK
Chevron Corp – CVX
Conoco Phillips – COP
Flowers Food Inc – FLO
Garmin Ltd – GRMN
General Mills Inc – GIS
Hasbro Inc – HAS
Harris Corp – HRS
Intel Corp – INTC
Johnson & Johnson – JNJ
Lockheed Martin Corp – LMT
Microsoft Corp – MSFT
PepsiCo Inc – PEP
Procter & Gamble – PG
RadioShack Corp – RSH
Seagate Technology PLC – STX
Sunoco Logistics Partners LP – SXL
Wisconsin Energy Corp – WEC
Waste Management Inc – WM
To be honest, I was the first one surprised to see RadioShack on the list! And this is why I’ve decided to look at it a little bit deeper ;-). To be honest, I didn’t review all the stocks I wanted in this eBook and this is why I wanted to share this list with you. I’m curious to see which of these companies you would like me to analyze in the upcoming months.
Let me know what you think!
Good to see INTC and STX on that list since I own them both in my retirement accounts. I may have to consider others on this list as well.
I like the list except for RadioShack! There is nothing that differentiates them from other stores. It will probably go the way of Sharper Image.
@Moneycone,
I was surprised too to see RadioShack! lol! the main differentiation is the fact that they have tons of stores in the US and therefore, they are more accessible than other stores for quick purchases (such as cellphones, headphones, wires, batteries, etc.)
Why I do like US stocks!
Much more diversified in the market with worldwide sales.
Why I don’t like US stocks!
1) Subject to double high/low scenarios. With currency fluctuations to also keep in mind, one must consider not only stock valuation but exchange rate. You can buy a stock on the low side but high Can$ valuation and still end up neutral if the stock improves and the currency slumps.
2) If not held within an RRSP it is subject to tax withholdings on dividends. So your 4% dividend can easily shrink to 3%. Couple that to currency fluctuations and you could be wondering how much you are getting for a dividend. Naturally if you bought at a high Can $ valuation and it has deteriorated then you are a winner.
I have been following your blog since last week. Thank you for the great list. I will use screeners and may be pick couple of stocks from this list for my portfolio. This is very helpful.
Great job Mike! I like to add a little technical analysis to your picks as well. Thanks
Thanks for the list Mike! Which site do you use for filtering?
Thanks,
Dan
Great job as alsways Mike. Although I prefer mainstream good dividend stocks for the long term, I like to add a “grower” once in a while.