Good dividend stocks are theoretically simple to shortlist. Dividend investors look out for companies who are able to sustain in the long run, hoping to own their shares and able to depend on their generous payouts in future and not dump them months later because the company slashed their payouts because they foresee big problems in their underlying business.
In this article, I will be looking at some of the dividend paying stocks and shortlist three of them and share with you today.
Techie Business: Cisco Systems, Inc. (CSCO)
YTD Performance: +4.94%
Market Cap: $150 billion
Dividend Yield: 2.8%
People would usually not associate stocks of technical companies with dividend paying companies. This is due to their nature of business. Technical companies will usually require funds for their research and development department so that they can bring new and better products to the consumers. As such, rather than paying out their profits to shareholders as dividends, they will keep most of their profits as research and development funds for their next fiscal year.
Cisco Systems, Inc. (NASDAQ: CSCO) has been able to maintain and increase its dividend payout year-on-year even when there was a drop in earnings per share for the fiscal year 2014. Even with a reduction in their revenue, Cisco did not cut back on their research and development spending. This was needed to ensure that their dominance in the fast growing network industries.
REITs: United Dominion Realty Trust, Inc. (UDR)
YTD Performance: +5.00%
Market Cap: $8.64 billion
Dividend Yield: 3.4%
The topic of rising interest rates by the Fed have been much talked about and the news has hit especially hard on the real estate investment trusts (REITs). As prices of REIT stocks tumbled, it provides investors with a well-timed opportunity to enter the market, to catch a cheaper source of income.
United Dominion Reality Trust, Inc. (NYSE: UDR) is the REIT manager for various quality multi-family apartment communities across the United States. Bulk of UDR’s portfolio is located in high-income, high-demand metro areas. As such, UDR is able to deliver decent dividend growth.
Cheap Stocks: Star Gas Partners, L.P. (SGU)
YTD Performance: +38.67%
Market Cap: $452 million
Dividend Yield: 4.6%
Although dividend investors should know that they should not be chasing after stocks with high dividend yield and sometimes the high dividend yield may just be because of the cheap price of the stock (since yield = dividends paid per share / price per share). However, this stock, being a master limited partnership, has the ability to pay high yields.
Being one of the largest retail distributors of natural gas in United States, Star Gas Partners, L.P. (NYSE: SGU) has a steady revenue stream that allows SGU to pay 9.5 cents quarterly to shareholders. The high dividend amount gives investors a very good stream of income now and in the future.