Now let's apply those lessons to 2017, and highlight five that should do even better (17%+ returns) this year (and likely beyond).
Remember, projecting our returns from any given stock is simple. We simply add together the three ways it can pay us:
Its current dividend.
A future dividend hike.
Share repurchases.
It also helps if the stock is inexpensive, as buybacks deliver more bang for management's buck. So let's stick with stocks that are dirt-cheap, trading for 10-times free cash flow (FCF) or less for this exercise.
Here's an example of a stock ready to return 17% or more over the next year.
Dividend Income orientated Blog. Ideas and Thoughts about Stocks, Dividends and Growth Opportunities.
6 Attractive Dividend Stocks
In order to get a nice return on your investment, you need to buy stocks at a cheap or reasonable price related to the expected growth. Today I like to share a screen with you that includes some in my view attractive dividend stocks.
I started with a custom made list of the dividend champions. Being a dividend champion fulfills the quality criterion.
I then sorted the list by P/E ratio, and picked the companies with a P/E below 20. I have a maximum P/E requirement in order to avoid overpaying for companies. Even the best company in the world is not worth overpaying for.
The next step in the process included evaluating trends in earnings per share and dividends per share. As I mentioned above, I want companies that can grow earnings per share over time. Earnings per share growth should be over5 percenjt for the next half decade.
This will drive future increases in dividends, and protect the purchasing power of my income in retirement.
I do not want companies that increase dividends merely by increasing their payout ratios, or who have slowed down on dividend increases because their earnings are stagnant.
Six stocks remain at the end of my screening process.
These are the results...
I started with a custom made list of the dividend champions. Being a dividend champion fulfills the quality criterion.
I then sorted the list by P/E ratio, and picked the companies with a P/E below 20. I have a maximum P/E requirement in order to avoid overpaying for companies. Even the best company in the world is not worth overpaying for.
The next step in the process included evaluating trends in earnings per share and dividends per share. As I mentioned above, I want companies that can grow earnings per share over time. Earnings per share growth should be over5 percenjt for the next half decade.
This will drive future increases in dividends, and protect the purchasing power of my income in retirement.
I do not want companies that increase dividends merely by increasing their payout ratios, or who have slowed down on dividend increases because their earnings are stagnant.
Six stocks remain at the end of my screening process.
These are the results...
19 Cheap High-Yield Opportunities From The Financial Sector
Financial stocks can offer great opportunities for dividend investors. Financials will benefit from rising interest rate expectations and a steeper yield curve.
The sector offers the least expensive valuation of any sector in the S&P 500, trading at a mere 13.5 price/earnings multiple. Financials also benefit from positive loan growth, which should occur this year.
In addition, it is the sector that has the most sensitivity to higher interest rates. While multiples have increased for most of these stocks since the election, many are trading at a substantial discount to the market. Deregulation could create potential earnings per share upside for the entire sector.
Here are my results...
The sector offers the least expensive valuation of any sector in the S&P 500, trading at a mere 13.5 price/earnings multiple. Financials also benefit from positive loan growth, which should occur this year.
In addition, it is the sector that has the most sensitivity to higher interest rates. While multiples have increased for most of these stocks since the election, many are trading at a substantial discount to the market. Deregulation could create potential earnings per share upside for the entire sector.
Here are my results...
The Highest Yielding S&P 500 And The Dogs of the S&P 500
While you wait—and wait—for the Federal Reserve to raise interest rates, you can collect generous checks by investing in dividend stocks. And you don’t have to wander far to find attractive payers. Just look at Standard & Poor’s 500-stock index.
Of its 500 member companies, 84% pay dividends, up from 75% a decade ago. On top of that, many of the index’s constituents are rewarding shareholders by boosting their payouts; so far this year, 169 S&P companies have done so.
There are stocks on the S&P 500 that pay nearly 10%, but that doesn't make them great investments.
The average stock on the S&P 500 index pays a dividend yield of 2.41%, but some are paying much more. Here's a chart of the 10 highest-paying dividend stocks on the S&P 500, and which ones might be the best choices to buy and hold for the long term.
Here are the highest yielding S&P 500 and the Dogs of the S&P 500...
Of its 500 member companies, 84% pay dividends, up from 75% a decade ago. On top of that, many of the index’s constituents are rewarding shareholders by boosting their payouts; so far this year, 169 S&P companies have done so.
There are stocks on the S&P 500 that pay nearly 10%, but that doesn't make them great investments.
The average stock on the S&P 500 index pays a dividend yield of 2.41%, but some are paying much more. Here's a chart of the 10 highest-paying dividend stocks on the S&P 500, and which ones might be the best choices to buy and hold for the long term.
Here are the highest yielding S&P 500 and the Dogs of the S&P 500...
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