6 Climbing High-Yield Dividend-Paying Stocks
Granted there are a select few that come along every now and then that can be considered for shorter-term capital appreciation, but otherwise sticking with dividend payers is more likely in the long run to increase your portfolio.
Dividend-paying company executives understand they must stay aggressive each quarter or risk being forced to cut the dividend (and upset investors). I believe it's the "in your face" number hanging out there that keeps the team relatively more focused than a company that doesn't pay a dividend. A team focus on bolstering earnings is synonymous with rising share price.
Many investors make the mistake of believing we continue to live in the world of old-school investing. In days gone by, if you wanted a stable high-yield dividend, you bought utilities as a retirement income vehicle.
Today with computers and online access, large and small investors can find dividend-paying companies increasing in price. Having your cake and eating it too is more possible than ever.
Obviously not every dividend-paying stock rising in price is a buy; consequently I search for those that offer a favorable risk-to-reward. Take a look and see if you agree.
Conagra Foods (CAG)
Background: ConAgra Foods has transformed itself into an industry-leading, branded and value-added food company.
52-Week Range : $23.64 to $30.55
Price to Book : 2.7
Earnings Payout Percentage : 63%
Conagra Foods pays $1 annually in dividend payments. The yield based on a recent price is about 3.3%.
Not surprisingly, the last reported short interest is only 1.6% of the average trading float. Short sellers are the smart money, and with shares now trading near $30, most of the short sellers are under water.
In the last 52 weeks, the shares are about even with a small gain of 1.2%. Conagra Foods has an average analyst target price of $33.60. I believe a price target of $36 in the next 12 months is reasonable. After adjusting for dividend payments, if my price target is met, ConAgra will return a gain of over 20%. Not a bad first-year start with most any investment.
Background: PepsiCo engages in the manufacture and sale of snacks, carbonated and non-carbonated beverages, dairy products and other foods worldwide. The company was founded in 1898 and is headquartered in Purchase, N.Y.
52-Week Range : $62.15 to $73.66