High Yield Dividend Stocks Setting New Yearly Highs
After all, high taxes or low taxes, as investors we still want to make money. Historically, dividend-paying stocks have performed well. There are some recent notable exceptions to the rule though. Hewlett-Packard (HPQ) comes to mind rather quickly.
HP isn't a rising stock paying a large dividend though, and that's what separates the zeroes from the heroes in my opinion.
When I examine stocks that pay large dividends, I want to avoid the "yield-traps" and stick with companies that are solid fundamentally.
Take a look at these winners in both share price and dividend yield.
Conagra Fooods (CAG)
Background: ConAgra Foods has transformed itself into an industry-leading, branded and value-added food company.
52-Week Range: $23.64 to $28.80*
Book Value: $11.22
Price To Book: 2.5
Earnings Payout Percentage: 63%
ConAgra currently has an annualized dividend of $1 with a yield of about 3.5%.
After announcing a large special dividend and buyout, shares jumped higher. ConAgra is a great stock, but don't chase this one higher. Wait for profit-taking and a lower price (less than $29) before entering.
Eight of 15 analysts now rate the company a hold while seven recommend buying and no analysts recommend selling. For a company analysts are mostly rating a hold, the stock really appreciated, gaining more than 20% in the last year, and consensus analyst target price is $30.17.
Watch for rising price targets if shares maintain the $30 price range after the ex-dividend date.
The last reported short interest is paltry and only 1.6% of the average trading float. The relative payout percentage of earnings towards dividends is small enough to consider the dividend safe.
Procter & Gamble (PG)
Background: Procter & Gamble manufactures and markets a broad range of consumer products world wide.
52-Week Range: $59.07 to $70.83
Book Value: $23.09
Price To Book: 3
Earnings Payout Percentage: 58%
P&G currently has an annualized dividend of $2.25, yielding 3.2%. I have recommended P&G before, and can you blame me? The price-to-earnings multiple is under 20 for both the trailing 12 months and the forward estimates. P&G closed at $66.68 and paid out 56.2 cents in dividends since the closing price of the last article. I don't think this company is finished rewarding investors yet.
The shares are modestly higher from a month ago, but are only about a dollar from the 52 week high. The stock appreciated 14% in the last year, and the average analyst target price is $74.85.