Today
I've created a small list of stocks with high dividend yields (over five
percent) that are close to become a Dividend Champion in the upcoming years.
Those stocks have raised dividends over more than 25 years in a row.
Dividend Growth is King
When you read my blog for a longer time, you should
know that dividend growth is the key of a successful dividend investing.
In
a non-performing market, dividends contribute 100 percent to the total
performance or they can reduce their losses.
In
my view, dividends are good enough to generate a solid cash income when the
market suffers.
Over the past five years, this strategy failed because
of the high intention of the Federal Reserve to reduce the unemployment via
money printing. As a result, stock markets more than doubled in the most countries
of the world and equities got very expensive.
Dividend yields of the best dividend paying stocks
declined also by a few percentage points and investors often don't get a compensation
for inflation now.
What
we need are higher yielding stocks, but those are also more risky and sometimes
overloaded with debt.
I've attached a list of the highest yielding potential
dividend Champions. Only 13 companies with a consecutive dividend growth
history of 10 to 25 years have a current dividend yield above the 5 percent
ratio.
Kinder Morgan Energy Partners (NYSE:KMP) has a market capitalization of $35.58 billion. The company employs 10,685 people, generates revenue of $8.642 billion and has a net income of $2.025 billion. Kinder Morgan Energy Partners’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $3.533 billion. The EBITDA margin is 40.88 percent (the operating margin is 27.08 percent and the net profit margin 23.43 percent).
Financial Analysis: The total debt represents 53.64 percent of Kinder Morgan Energy Partners’s assets and the total debt in relation to the equity amounts to 150.14 percent. Due to the financial situation, a return on equity of 7.34 percent was realized by Kinder Morgan Energy Partners. Twelve trailing months earnings per share reached a value of $3.58. Last fiscal year, Kinder Morgan Energy Partners paid $4.98 in the form of dividends to shareholders. The company raised their dividends over 17 consecutive years.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 22.72, the P/S ratio is 4.12 and the P/B ratio is finally 3.50. The dividend yield amounts to 6.64 percent and the beta ratio has a value of 0.39.
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| Long-Term Stock Price Chart Of Kinder Morgan Energy Partners (KMP) |
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| Long-Term Dividend Payment History of Kinder Morgan Energy Partners (KMP) |
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| Long-Term Dividend Yield History of Kinder Morgan Energy Partners (KMP) |
Realty Income (NYSE:O) has a market capitalization of $7.76 billion. The company employs 104 people, generates revenue of $475.51 million and has a net income of $145.97 million. Realty Income’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $430.44 million. The EBITDA margin is 90.52 percent (the operating margin is 31.00 percent and the net profit margin 30.70 percent).
Financial Analysis: The total debt represents 52.98 percent of Realty Income’s assets and the total debt in relation to the equity amounts to 119.52 percent. Due to the financial situation, a return on equity of 5.45 percent was realized by Realty Income. Twelve trailing months earnings per share reached a value of $0.69. Last fiscal year, Realty Income paid $1.78 in the form of dividends to shareholders. The company raised their dividends over 19 consecutive years.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 54.53, the P/S ratio is 15.63 and the P/B ratio is finally 2.80. The dividend yield amounts to 5.76 percent and the beta ratio has a value of 0.81.
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| Long-Term Stock Price Chart Of Realty Income (O) |
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| Long-Term Dividend Payment History of Realty Income (O) |
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| Long-Term Dividend Yield History of Realty Income (O) |
Buckeye Partners (NYSE:BPL) has a market capitalization of $8.39 billion. The company employs 1,020 people, generates revenue of $4.357 billion and has a net income of $230.55 million. Buckeye Partners’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $557.33 million. The EBITDA margin is 12.79 percent (the operating margin is 7.78 percent and the net profit margin 5.29 percent).
Financial Analysis: The total debt represents 49.18 percent of Buckeye Partners’s assets and the total debt in relation to the equity amounts to 123.99 percent. Due to the financial situation, a return on equity of 9.69 percent was realized by Buckeye Partners. Twelve trailing months earnings per share reached a value of $2.66. Last fiscal year, Buckeye Partners paid $4.15 in the form of dividends to shareholders. The company raised their dividends over 18 consecutive years.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 25.59, the P/S ratio is 1.80 and the P/B ratio is finally 2.82. The dividend yield amounts to 6.32 percent and the beta ratio has a value of 0.27.
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| Long-Term Stock Price Chart Of Buckeye Partners (BPL) |
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| Long-Term Dividend Payment History of Buckeye Partners (BPL) |
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| Long-Term Dividend Yield History of Buckeye Partners (BPL) |
Here is the full table with
some fundamentals (TTM):
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| Potential Dividend Champions With High Yields (Click to enlarge) |
*I have
no positions in any stocks mentioned, and no plans to initiate any positions
within the next 72 hours. I receive no compensation to write about any specific
stock, sector or theme.