High yield dividend stocks are already in focus, and dividends will become even more important to many investors as the stock market enters the dark days of September.
If you put any stock in the seasonal trends of Wall Street, the volatility we've seen this summer will increase and hold back equities.That's where a healthy dividend yield can help you. After all, a stock that yields a quarterly dividend payout of 5 per cent or more can still give you something to show for your investment even if the market is choppy.
If you're looking for dividend stocks that have just increased their paydays as we enter September, here are seven high-yield investments worth a look. Each of these companies has just made an increase to its dividend recently.
Verizon declared a quarterly dividend of 48.75 cents per share, an increase of 1.25 cents per share or a bit less than 3 per cent. That sends the telecom stock's yield up slightly to 6.3 per cent. Unfortunately, the annual increase of 5 cents is the weakest bump in four years -- following a 6 cent increase last year and a 12 cent increase in 2008.The quarterly dividend is payable on Nov. 1 to Verizon stock shareowners of record at the close of business on Oct. 8. This is the fourth consecutive year that Verizon has approved a quarterly dividend increase in September. VZ stock has had a rough 2010, down about -10 per centyear-to-date.
Tobacco and foodstuffs stock Altria announced a hefty 8.6 per cent increase in its quarterly dividend to 38 cents a share from 35 cents previously. This was the second quarterly dividend increase this year and puts Altria's dividend yield at a very nice 6.6 per cent.This is the 43rd consecutive dividend increase for Altria Group, but those watching for Dividend Aristocrats may not know this. That's because its long-term dividend history is affected by the 2008 spin-off of Philip Morris International in 2008 and Kraft Foods in 2007.
Also on the tobacco front, Lorillard , approved a 12.5 per centincrease in its quarterly dividend this week, from $1.00 per share to $1.125 per share. This is the second consecutive dividend increase since the company joined the NYSE in 2008, pushing up LO stock's dividend yield to about 5.6 per cent. Though flat on the year, LO stock has performed very well in the dog days of summer with a +10 per cent gain in shares since June. The reliable revenue stream from a highly regulated and low-competition industry like cigarettes means that Lorillard's big dividend yield is here to stay, too.
4. Bob Evans
Bob Evans Farms is a bit of an oddity among small-cap, full-service restaurant companies with its decent dividend yield. And as of this week, that dividend just got bigger with an 11 per cent increase from 18 cents to 20 cents paid out each quarter. At current valuations, that's a yield of around 3 per cent. Not bad for a breakfast joint with a $830 million market cap.
Bob Evans Restaurants and Mimi's Cafes in the United States have consistently raised quarterly payouts since 2001. While the stock is down about -5 per cent so far in 2010, it is comfortably profitable and even the lowest price estimates according to Thomson/First Call anticipate upside for shares from current levels.
5. Alliance Financial
Small-cap stock Alliance Financial announced a quarterly dividend of 30 cents per share, an increase of about 7 per cent over its previous 28 cent payout. The dividend is payable on Oct. 1 to ALNC stock shareholders of record Sept. 17.The increase gives Alliance a current yield of about 4.1 per cent.
Alliance Financial Corporation provides financial services from 29 retail branches and customer service facilities in New York. While some regional banks have suffered lately, ALNC stock has tallied a +8 per cent return year-to-date and has been consistently profitable with considerable earnings surprises for each of the last four fiscal quarters.
6. Stage Stores
Stage Stores, a department store retailer that operates 750 stores in the U.S. under brands including Bealls, Goody's and Peebles, just made shareholders very happy with a whopping 50 per cent dividend increase last week from 3.25 cents quarterly to 7.5 cents. That gives the stock a yield of about 2.6 per cent at current valuations.This was the first dividend increase since 2006 for Stage. The company returned to profitability in the first quarter of this year and while it hasn't fought back from the May market mayhem, it has a fairly bright outlook according to Wall Street analysts. If the median target of $16 according to Thomson/First Call proves true, SSI stock is looking at about a +35 per cent upside.
7. MGE Energy
MGE Energy is one of those un-sexy but reliable utility stocks that "engages in generating, purchasing, transmitting, and distributing electricity." Yawn. However, the plump dividend and stable share price make this a good sleeper stock -- especially considering the company raised its quarterly dividend from $0.3684 to $0.3751 per share recently. Never mind the decimal places -- the bottom line is that this makes the 35th annual dividend increase, placing MGEE stock's dividend yield at more than 4 per cent now. Add into the mix an increase of about +5 per cent in shares year-to-date and you may find that MGE Energy makes a good low-risk investment for your portfolio.
As of this writing, Jeff Reeves did not own a position in any of the stocks named here.
Companies & investments Mentioned In This Article (7)
VZ-N 51.89 0.42
0.816% 10.342M Altria Group Inc.
MO-N 36.86 -0.04
-0.108% 8.458M Lorillard
LO-N 43.57 -0.03
-0.069% 7.856M Bob Evans Farms
BOBE-Q 46.07 0.29
0.633% 92,888 Stage Stores
SSI-N 23.36 0.13
0.56% 921,051 MGE Energy
MGEE-Q 55.54 -0.14