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Highest Dividend Yield Stocks For Cheapskates


Are you a cheapskate? Want to find the highest dividend yield stocks now on sale? Here’s what to do. – PowerPoint PPT presentation

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Title: Highest Dividend Yield Stocks For Cheapskates

(No Transcript)
Welcome to Dividend Stocks Research Your premier
site for Rankings and Reviews of the best
dividends stocks around. For more info on
dividend stocks please visit our website
  • Hi, My name is Aaron and Im with Dividend Stocks
    Research, today were reviewing our recently
    published article

Highest Dividend Yield Stocks For Cheapskates
I sunk some quality time into the U.S. Open this
weekend, and if youre a golf fan, I hope you did
too.How about Jordan Spieth, only the sixth
player in history to capture the Masters and the
U. S. Open in the same year?
Do you play golf? The U.S. Open brings a
dividend stock to mind... Callaway Golf ELF.
Stick to the clubs and stay away from the stock.
Invest in Callaway and youll wind up in the
rough. Or youll be doomed to putt on those
greens at Chambers Bay that looked worse than the
Enron Balance sheet.
No, Callaway is not one of the highest yield
dividend stocks. Far from it. The yield is down
below half a percent, and the dividend payout
ratio is redlining at 100.
Callaway is a flat out risky play, going for the
green instead of laying up, risky like those high
yields that lure us into doing something we know
we shouldnt do.
We see a yield thats up over 6 or 7 and we
think, I could buy a few shares of that and give
my overall returns a nice little boost. Id like
to pump up my income a bit, and this looks like a
great way to do it.
Not a bad idea. Not unless you start to play
with fire and buy stocks because they deliver
seductive dividend yields up over 10.
But lets say youre happy with a more modest
income edge. Youre comfortable with a yield
thats less than 10. And lets say youre a
cheapskate. Youll walk away if you dont find a
good deal.
You know what? Theres a whole world of high
yield stocks waiting for you.
Deals On The Highest Dividend Yield Stocks
The first place to look is in energy stocks.
Falling crude oil prices have been hammering
stocks that have anything to do with oil.
Even natural gas pipeline companies are taking a
hit. Spectra Energy Corp. SE is in the business
of natural gas transmission and storage,
distribution, and gathering and processing.
Theres more oil in your backyard than there is
in Spectras 37 billion in assets. And the stock
is down more than 20 over the past year. Call
it irrational, call it unfair, call it whatever
you want, but investors have soured on energy
If youre a cheapskate, looking for a deal, you
couldnt find a better place to look. A close
second is the food business. Its been a rough
ride lately for the packaged food and beverage
Kellogg K, General Mills GIS, Coca-Cola
Enterprises CCE, Pepsico PEP, J. M. Smucker
SJM... theyre all struggling.
Why? Shifting consumer tastes. A growing number
of people would rather pick up a jar of homemade
jam at the local farmers market thangrab a jar of
Smuckers at Kroger KR.
Theres a shift toward artisanal products, local
brands, and healthier foods. Its the craft beer
phenomenon creeping into other consumer
products. Speaking of beer...
I love the Molson Coors ticker... TAP. But what
an overpriced stock. The P/E ratio is 32.
Thats almost twice the P/E for the overall
market. Thats like paying two bucks for a
bottle of Coors Light when you can buy a bottle
for less than a dollar at Wal-Mart WMT.
A cheapskate wouldnt touch this stock. But
wander up and down the aisles of food product
stocks and youll turn up a good deal. And heres
another sector where youll find a good deal on
dividend yield.
Utilities. In the first quarter of 2015, utility
stocks paid an average dividend yield of 3.6,
but the sectors performance was 5.2 below the
overall market.
The Highest Dividend Yield Utility Stocks
Let me show you the 3 highest dividend yield
utility stocks.
Transalta Corp.TAC, pays an 8.97
dividend. Southern Company SO pays a 5.08
dividend. TECO Energy, Inc. TE 5.02 dividend.
But hold on. Dont rush in. Weve written about
Transalta Corp. before and we warned dividend
investors to stay away.
On May 4, my colleague, Michael Jennings, asked
you to steer clear of Transalta. That day, the
stock was trading at 9.88. Now, its at 8.03.
The email we sent to our subscribers had the
subject line, The High Yield Utility Stock You
Must Avoid. The Transalta warning was in a
piece about the highest yield stocks.
Look... youve got to be careful. Just because
youre a cheapskate doesnt mean youre safe. And
as far as making a good deal on one of the
highest dividend yield utility stocks right
TECO probably doesnt make much sense. The
Tampa-based utility has a high dividend payout
ratio and a high P/E ratio, a bad combination for
Southern Company? A nice 5 yield, 17 years of
dividend growth, and a P/E ratio of 18, not bad
at all. Not exactly a clearance rack sale, but
very reasonable.
And Southern Company, with power customers in
Alabama, Georgia, Florida, and Mississippi, is
down off its recent highs...

The Right Price To Pay For Dividend Yield
Dont be too much of a cheapskate. When you see
a stock like Southern Company, where the P/E
ratio is in line with the overall market, dont
rush off before you take a good look.
Keep in mind that youre buying income... Youre
buying income for today and tomorrow.
In the case of Southern Company, youve got a
nice 5 yield right now because the stock is off
its highs. If the dividend payout stays the
same, and the stock price makes up some of the
15 its lost this year, yield goes down.
Not bad thing, if the dividend keeps growing.
Remember, theres nothing terribly wrong with a
low dividend yield if it keeps on growing. When
you reinvest your dividends, the yield will
continue to grow.
Its just like hitting singles, and advancing the
base runner. Before long, if youre consistent,
you score some runs. When the people at Ned Davis
Research looked into the long-term impact of
reinvesting dividend, heres what they found.
If you invested 100 in the SP 500 at the end of
1929, and waited until 2010 to sell your stock,
you had 4,989. But if you reinvested all the
dividends paid along the way Your 100 turned
into 117,774.
Whats your investment horizon? Probably not the
81 years in this example. But the strategy is
just as solid if youre looking down the road 10
or 20 years. You do a lot better when you
reinvest dividends. Theyre the dependable spark
that lights up the income fire.
Looking for the highest dividend yield stocks is
fine. Just make sure youre not lured into the
dangerous alleyways of outfits like Trans Alta.
Whats better is finding one of the highest
dividend yield stocks that has solid growth
prospects, where revenues can build, expenses can
be managed, and the dividend grow year after
year, decade after decade.
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