McDonalds Dividend – MCD

With fiscal year 2009 gross profit of $10.0 billion against sales of $22.74 billion, McDonald’s Corporation (NYSE symbol: MCD) ranks as the largest fast-food restaurant chain in the world. It currently operates more than 32,000 restaurants in some 110 countries, and is constantly expanding its locations. Approximately 70 percent of the restaurants are franchised, and the remaining 30 percent are company-owned.

Primary Competitors
Although there are a number of quick-serve chains including Starbucks and Panera Bread, McDonald’s main competitors are fellow hamburger-serving conglomerates such as Triarc, owner of Wendy’s, and Burger King Holdings. Wendy’s posted 2009 profits of $868 million against revenues of $3.58 billion. Burger King’s revenues totaled $2.5 billion in its fiscal year ending June 30, 2009. Its gross profit was $992 million.

2009 Stock Performance Versus Competitors
Stock prices from McDonald’s from August 1, 2009 through July 2010 sank to a low of $53.88 per share on September 10, 2009. On May 3, 2010, the stock achieved its highest price of $71.84 per share. During the same time period, Burger King’s lowest stock price was $16.31 per share, recorded on July 7, 2010. The stock price hit a high price of $22.19 per share on April 26, 2010. Wendy’s stock prices fluctuated between a low of $3.83 per share December 11, 2009 and a high of $5.55 recorded April 20, 2010.

Dividend Information
McDonalds is yielding 3.1% as of 7/29/10 with a nice payout ratio of 53%. MCD has been adding to the dividend over the last 5 years and has a dividend growth rate of 38.81, one of the best I’ve seen lately. They have also been increasing the dividend every year for the last 33 years. Do you think this stock is over valued with a P/E or 18? Could be so.

Dividend History
2009: $2.05
2008: $1.62
2007: $1.5

Johnson & Johnson Dividend – JNJ

Since its founding in 1886, Johnson & Johnson (NYSE symbol: JNJ) has become one of the world’s largest and most diverse healthcare corporations. Its product range includes consumer products, pharmaceuticals, diagnostic devices and medical equipment. The New Brunswick, New Jersey-based firm recorded a 2009 gross profit of $46.2 billion against sales of $61.9 billion. It is currently the second-largest healthcare company in the world behind Pfizer. The company manufactures familiar brands such as Band-Aid, Tylenol, Motrin and Neutrogena.

Primary Competitors
Johnson & Johnson’s main competitors include Pfizer and Novartis. Pfizer’s 2009 gross profit of $43.0 billion was achieved against revenues of $50.0 billion. Novartis achieved a 2009 gross profit of $34.2 billion against revenues of $45.1 billion.

Stock Performance Versus Competitors
From July 20, 2009 to July 19, 2010, J&J’s stock price fluctuated between a low of $57.55 per share on June 8, 2010 to a high of $66.03 per share on April 19, 2010. During the same period, Merck stock prices ranged from $28.69 per share August 5, 2009 to $41.56 per share January 15, 2010. Novartis stock prices hit a low price of $43.39 per share on July 29, 2009 and rose to a high of $56.42 per share on December 4, 2009.

Dividend Information
JNJ is sitting on a yield of 3.5% this morning. That is higher than the 5 year average of just 2.7%. Their payout ratio makes me feel safe when thinking about this stock because it is a low 40%. The 5 year dividend growth rate is 11.18% and they have raised their dividend for 47 consecutive years. Now I feel even safer. What is not to like about this dividend stock? Well, you might find that chart unappealing, or you might see it as an opportunity.

Dividend History
2009: $1.93
2008: $1.79
2007: $1.62

Pfizer’s Got The Right Yield

Pfizer (PFE) is the largest pharmaceutical company in the world with over 100,000 employees and over $50 billion dollars in drug sales. Pfizer was a darling of the Dow for years until the late 90’s. Over the past 10 years Pfizer has been a Dog of the Dow. The stock has been dead money for over a decade. Pfizer currently trades at just $14 per share which is its lowest level since the March lows of 2009. Before the March lows, the stock hasn’t traded this cheaply since 1997.

Pfizer has been beaten down since 2000 due to patent expirations and lower growth forecast. In recent years Pfizers has had several blockbuster drugs come off patent such as hypertension drug Norvasc, allergy medication Zyrtec and cholesterol drug Lipitor. Pfizer has struggled to replace the lost revenue of these drugs. Pfizer has recently begun acquiring other companies to spur revenue growth. Pfizer has acquired Warner Lambert and Pharmacia over the past few years.

Pfizer’s most recent purchase is its $68 billion dollar acquisition of Wyeth which is expected to increase the drug maker’s profitability. Pfizer may have overpaid for Wyeth but the drug maker is acquiring a great product line. Wyeth owns such popular products as Advil, Centrum ChapStick, Dimetapp, Dristan, Preparation H, and Robitussin. These products will provide a consistent stable income stream for Pfizer.

Pfizer is developing a nice pipeline of new drugs with 26 drugs currently in Phase 3 clinical trials. Pfizer has promising new drugs Apixaban and Crizotinib in clinical testing phases. Apixaban alone could generate over $4 billion in revenue a year for Pfizer. Pfizer’s new drug pipeline is expected to net the company $20 billion dollars in revenue annually over the next few years.

Pfizer has a great balance sheet with over $17.2 billion dollars in cash. Pfizer has a cash flow yield of 6% and generates $7 billion in free cash flow annually. The Wyeth acquisition will only increase the operating cash flow for Pfizer. At just $14 a share, Pfizer has a generous dividend yield of 4.95%. Pfizer pays out just 32% of earnings in the form of dividends meaning that the company has the ability to grow the dividend in the future. This is very attractive for a company with the single digit growth potential of Pfizer.

All of the negative news appears to be already priced into the stock. The stock trades at just 6 times forward earnings and 1.3 times book value. Pfizer has a solid profit margin of 14% and a high operating margin of 32%. Revenue growth increased 54% over the past quarter. The stock is priced as if there are no growth catalysts for Pfizer in the future. The downside risk is limited and the stock has solid upside potential. Pfizer is not a quick turnaround play but a stock for long term investors.

Real Estate Investment Trusts

If you are looking for extra income from your investments, take a look at real estate investment trusts. Real estate investment trusts (REIT’s) are known for offering some of the biggest dividends around. REIT’s invest directly in residential or commercial real estate and receive special tax considerations from the government. In exchange for lower taxes, REIT’s are required by law to pay out 90% of their earnings in the form of a dividend to investors.

Let’s take a look at a relatively new REIT by the name of Chimera Investment Corp (CIM). Chimera is a spinoff of Annaly Capital Management. The company became its own entity in 2007. Chimera is a REIT that invests heavily in mortgage backed securities. Mortgage backed securities are claims on the future cash flows of mortgage loans.

If you have watched television over the last few years, you know the difficulties that the housing market is having. Mortgage backed securities are at the center of this mess.
Individuals are struggling to make their mortgage payments and homes are being foreclosed on nationwide. As a result of this home prices are dropping and loans are being defaulted on.

Despite the troubles in the housing market, Chimera has weathered the storm admirably. After two years of negative earnings, Chimera returned to profitability in 2009. The company has managed to grow earnings nearly 300% over the past 5 years. Revenue jumped over 500% last quarter. Earnings are expected to grow 8% over the next 5 years. These are excellent numbers for a company that operates in the real estate market which has been in the doldrums since 2006.

The good news is that things appear to be returning to normal in the securitization market. The Federal Reserve had been purchasing mortgage backed securities to help lower mortgage rates and prop up the housing market. The Fed has stopped purchasing these securities and now the market appears to be getting healthier on its own.

The future looks bright for the mortgage lending business. Although loan volume may be down in the future, loan quality will be much higher due to increased governmental regulations. Liar loans and no doc loans will soon be a thing of the past. This should help reduce the default rate on loan securities. MBS ratings should actually mean something in the future.

At just $3.71, Chimera trades at 1.07 times book value. Chimera is currently yielding an incredible 18.5%. The dividend payout appears sustainable. Chimera is expected to earn 75 cents for the full year and will pay out 68 cents in distributions. This is a 91% dividend payout rate to shareholders. At juts 5 times earnings, Chimera is a nice bargain for value investors.

Verizon Is Now Yielding 7 Percent

It’s not often that investors are able to find a blue chip stock with an impressive dividend yield. Today however the market is offering up such an opportunity. Investors searching for a growth stock with a great dividend should take a look at shares of Verizon. Verizon Communications is one of the largest telecommunications companies in the United States. The company offers wireline and wireless services to individuals and businesses around the world.

Verizon has done an excellent job of finding new ways to increase its revenue. The company generated $107 billion dollars in revenue last year. Verizon has switched its focus from wireline services to its broadband services and wireless technologies through its Verizon Wireless and Fios fiber optic service. Verizon is already the largest U.S. mobile phone carrier with over 93 million subscribers. Verizon is still expanding its reach in the wireless industry, adding 1.6 million new subscribers last quarter. Verizon has a 55% stake in Verizon Wireless and Vodafone Group owns 45%.

Verizon’s stock closed at just $26.49 yesterday. The stock has been in a major downtrend recently and is barely trading above the company’s 52 week low. Earnings per share are expected to come in at $2.30 which means that the stock trades at 11 times forward earnings. This is slightly lower than the industry average of 12.5. Earnings are expected to grow at a 7.33% clip. This is excellent growth for a sector in which most telecommunication companies grow at a 4% annual rate. Verizon’s valuation seems pretty reasonable until investors take the dividend and potential growth catalysts into account.

Verizon is about to unveil its 4G network which would be a big boost to the company’s telephone, internet, and cable offerings. Despite the fact that Verizon is the largest U.S. cell phone carrier, less than 20% of Verizon customers currently have smartphones. There is tremendous growth potential for Verizon in the smartphone market. Verizon currently carries Motorola and Research In Motion smartphones.

There have been numerous reports that Verizon will begin selling the iPhone on its network as early as next January. Analysts estimate that Verizon could easily sell 12 million iPhones in the first year alone. This doesn’t even account for a portion of the 50 million disgruntled AT&T customers that will likely leave the troubled carrier as soon as their contracts expire. AT&T is expected to lose over 1 million subscribers to Verizon in 2011. This number will only increase in 2012 and onward.

Verizon is worth buying for the dividend yield by itself. Shares of Verizon are currently yielding a ridiculous 7.1%. Although the dividend payout is high at 83%, the dividend is sustainable since the company generates large amounts of free cash flow. Verizon offers investors a nice combination of modest growth and stable income.

Dividend Aristocrats – Income Investing

Standard and Poor’s (S&P) analyzes their top-performing blue-chip stocks each year to provide a list of S&P 500 Dividend Aristocrat stocks. To qualify for this list (See safe dividend list), the company must be part of the S&P 500 and have dividends that have consistently increased for at least the last twenty-five years. As of June 30, 2010, the S&P 500’s Dividend Aristocrat Index has a one year return of 23.02%.

Building Passive Income

If you’re building a stock portfolio that will provide you with passive income, you can generally depend on these high-performing dividend stocks to continue paying monthly or quarterly payments. Not only can you depend on the checks to keep coming, you can also expect them to increase each year. This feature makes the Dividend Aristocrat stocks a good way to protect your investment from inflation. In addition to the dividend payments, the price of these stocks remains stable compared to other options. Over time, the dividends will pay for your initial investment, and you will still have the original stock available for sale if the need arises.

Build Your Portfolio by Reinvesting the Dividends

If the stock you are adding to your investment portfolio offers a reinvestment plan, and you don’t need the passive income for living expenses, it would be a smart idea to take advantage of the offer. As your dividend payments are reinvested in the original stock, your number of shares will increase each quarter. Because this doesn’t require an out-of-pocket investment, it’s a painless way to build your asset base. If you decide that your dividends have grown to the point that they could pay for your living expenses, and you would like to stop working, you can opt out of the plan and live the good life courtesy of your high-paying Dividend Aristocrats.

Feel Secure with Stocks that are Household Names

You may have never heard the term Dividend Aristocrats, but you will certainly have heard of the companies that make up this S&P index. In 2010, almost fifty well-known companies are included in the S&P 500 Dividend Aristocrat Index.

We created the safe dividend list for our top dividend members. In that list we show all of the dividend aristocrats and we include our top dividend data and ratings.

Sunoco Dividend Stock

Sunoco, Inc. is an oil refiner and marketer and chemical manufacturer, as well as involved in coal mining for coke making. The company conducts all lines of its businesses through subsidiaries under a holding company structure. The petroleum refining and marketing division owns three refineries and has thousands of affiliated retail gasoline outlets. A joint partnership called Sunoco Logistic Partners L.P. manages the company’s oil pipelines and terminals. The company is the largest producer of racing gasoline for motor sports in the world. Its race fuel is the official fuel of the NASCAR. Sunoco Chemicals, the chemical division, manufactures, distributes, and markets its petrochemical products. The company’s SunCoke Energy subsidiary produces high-quality coke used in blast furnace steel making.

Sunoco, Inc. ranks 6th within the oil refining industry on the 2010 Fortune 500 List. As a leading independent oil refiner, the company is only behind Valero Energy. Higher on the list are four major integrated oil companies led by Exxon Mobil. Although revenue during 2009 topped $30 billion, the company lost more than $3 million largely resulted from asset impairment. At the end of 2009, the company had total assets of nearly $12 billion and stockholders’ equity of more than $2.5 billion.

Stock of the company is listed on the New York Stock Exchange under the ticker symbol SUN. The stock experienced both a major upward run and a downward move during the first part of last year. It regained strength after February this year and has performed extremely well since June.

Sunoco’s stock has performed relatively well over the last year comparing to the performances from its competitors, particularly those ranked ahead of the company. Stocks of the other 5 companies of higher ranking have trended down or at the best gone sideways during the past year, except that of ConocoPhillips, which only lately became under pressure to maintain its momentum.

Dividend Stock Info
Sunoco has a dividend yield of 2.8% as of July 5th, 2010. They have a history of a very low payout ratio. The 5 year average on the payout ratio is only 11%. Sunoco cut their dividend for 2010, which usually sends dividend investors running for the hills. We want to see that dividend going up each year and when a company starts to cut the dividend its a sign of trouble. Before 2010 SUN had increased their dividend for the last 7 years. In 2009 SUN was paying $.30 per quarter in dividends. In 2010 they reduced it to $.15.

Dividend History

2009: $1.20
2008: $1.17
2007: $1.07

Kraft Foods Dividend – KFT

Kraft Foods Inc., headquartered in Northfield, IL, is a consumer product company in the food processing business. The company makes and sells a variety of grocery food packages such as snacks, beverages, cheeses, dressings, and ready-to-eat meals under a portfolio of nine household brands. The Company conducts its business within three divisions: Kraft Foods North America, Kraft Foods Europe, and Kraft Foods Developing Markets. Earlier this year, Kraft Foods acquired Cadbury Plc of UK for $19 billion.

Kraft Foods Inc. is the number 1 food company in the U.S. and ranks second worldwide behind Nestlé of Switzerland. Other competitors include Sara Lee, H.J. Heinz, Kellogg, and Campbell Soup. Kraft had revenues of more than $40 billion for 2009 and net income in excess of $3 billion. Total assets as of the end of 2009 were over $66 billion while total equity stood at close to $26 billion.

Kraft’s stock is traded on the New York Stock Exchange under the ticker symbol of KFT. During the past year, the stock has been trading on an up trend. It started from the lowest point of the period in June last year at below $26 and reached to above $30 in mid April this year. It then trended down a bit dropping below $28 but has since bounced back. The stock is currently trading at a P/E ratio of 16.9, closing at $29.33 on 6/25/2010. Stocks of Kraft Foods’ competitors in the food processing category have generally performed in the same pattern over the last year with their P/E ratios ranging from 15 to 20.

Dividend Info

KFT has a nice yield currently sitting at 4.2%. That yield is just a little higher than it’s five year dividend yield average of 3.6%. The 5 year dividend growth rate is pretty good at 7.26%. Kraft just recently had an ex-dividend date on June 28th so look for the next ex-dividend date around the end of September.

The dividend history for KFT is solid, paying dividends since 2001 and raising dividends each year for the last few years.

Dividend History

2009: $1.16
2008: $1.10
2007: $1.02

A Great Dividend Yielding Limited Partnership

The best two places to look for great dividend yields are in REIT’s and limited partnerships. REIT’s are real estate investment trusts that are required by law to pay out 90% of earnings to all shareholders. Limited partnerships are business organizations that have general and limited partners who are entitled to a share of the partnership’s cash flow. As a limited partner, you are entitled to a portion of the firm’s cash but are not responsible for its liabilities.

Let’s take a look at one such limited partnership that is currently paying a great dividend.

The current stock market decline has created an incredibly high yielding stock in the infrastructure industry. Brookfield Infrastructure Partners (BIP) is a limited partnership that owns infrastructure assets in the energy, timberlands, and transportation sectors. The company has operations in North America, China, Europe, South America, and Australasia. Brookfield Infrastructure was spun off from Brookfield Asset Management in 2008.

Brookfield manages a portfolio of very attractive infrastructure assets. Brookfield started out with a major the majority of its portfolio in timber. The company now owns large positions in the railroad industry, coal mining, and natural gas. The company even has stakes in parking lots and transmission lines. These are very defensive sectors that tend to hold up well during market swoons.

Brookfield Infrastructure is a small cap stock with a market cap of just $1 billion dollars. In a market with volatile price swings day in and day out, Brookfield is a solid stable growth play. Growth is expected at 6% for the next 5 years. The most attractive part about Brookfield is the generous dividend yield. At just $16 a share, the stock is currently yielding a ridiculous 6.8%.

The 6.8% yield is higher than anything that you will find in the bond market. Ten year treasuries are currently yielding under 3% and AAA corporate bonds are paying less than Brookfield’s yield. Brookfield is an attractive investment because the partnership distributes 60 to 70% of funds back to investors. The company’s goal is to increase their dividend payout 3 to 7% per year.

energy Brookfield is only covered by one Wall Street analyst. Small cap stocks with little analyst attention have the potential to outperform the market as a whole. When a stock is only covered by a few analysts, it has a greater potential to outperform analyst expectations.

Not only are you getting an incredible yield, but you are also getting the potential for capital appreciation with Brookfield’s infrastructure portfolio. Infrastructure assets tend to perform very well during times of economic growth and inflation. Brookfield is in a prime position to benefit from any global economic recovery. The company estimates that overall spending in the infrastructure industry will be at least $370 billion a year through 2010.With the huge amount of fiscal stimulus by nations worldwide, it’s only a matter of time before inflation returns to the market place.

While the market has been subject to wild price swings over the next few months, you can park your money in Brookfield Infrastructure L.P. reap a high dividend and rest safely at night.

Stock Market And Dividend Report – June 2010

Disappointing Stock Market Results for June

The stock market finished the end of June at the lowest point seen in the previous nine months. The downward trend is attributed to investors becoming more nervous about the state of the global economy and the failure of the job market to show any lasting improvement.

Job Losses

The job report is expected to show a drop of about 125,000 jobs in the non-farming sectors, while jobless claims have climbed to a high of 4.62 million. While some of the drop is due to the release of the temporary census workers that were hired in the past months, it can also be blamed on the failure of the private sector to aggressively hire. The only good to come from this report is expected to be that job losses are continuing to slow even if new jobs are not being created. Many companies are afraid of what some of the new government regulations may bring in 2011 and are reluctant to increase their payrolls. They are anticipating potential higher costs of health care and additional taxes.

Consumer Confidence

The Consumer Confidence Index may not be near the historic 26.9 low shown in March, 2009, but the drop from 62.7 in May to 52.9 in June shows that the slow economic growth is troubling to most Americans. The forecasted economic growth rate has been downgraded several times and currently rests at 2.7%. While this number is low, any positive percentage reported shows that some improvement in the economy is expected. It does appear that businesses are slightly more confident in the future. Durable goods orders placed by manufacturers have been up for five months in a row when compared to the same month in the prior year. While the Gulf oil disaster has been financially devastating for the Gulf region and will definitely have some impact on the economy, the experts are saying that it is not enough to trigger another recession.

Global Economy

While the recent troubles in the European and Asian markets have been affecting the stocks traded on the New York Stock Exchange in recent months, the rebound in the Euro did not seem to have too much affect in June. The Euro gained 2.3% against the dollar which helped bring it back above its 50-day moving average; the Euro has not appeared this strong since last April. The remainder of the European market continued to perform poorly with markets in France, Germany, and Britain closing at losses between 1.8% and 3.0%. The Asian markets showed similar results. The Shanghai Composite reported a new 52-week low with a 1% loss, while Japan’s Nikkei showed a 9-month low with a 2% drop.

All Three Popular Averages Are Showing Downward Trends

The Dow Jones Industrial Average began the month at 9,931.97 and edged up well over 10,000 before finishing at 9,732.43 for a slight gain. At the close of June, the S&P was reported at 1027.37 points. The S&P has shown a steadily declining 50-day moving average that threatens to bring it below its 200-day moving average. It’s not encouraging to investors that the experts call this phenomenon a Death Cross. The NASDAQ finished at 2101.36, down 7.88 points from the previous day.

Market Sectors

Improving market sectors include Consumer Discretionary, Telecom, and Consumer Staples, while Financials, Health Care, Materials, Industrials, Energy, Tech, and Utilities are showing a declining trend. Health Care stocks were particularly low due to the SEC investigations of two major players, Almost Family (AFAM) and Amedisys (AMED), in this category.

Dividend Yields Continue With Business As Usual

While stock prices may be falling, most companies continue to make their normal dividend payments. As many businesses are anxious to make sure that their stock prices do not fall below a comfortable point, they will do everything possible to retain their dividend schedule and maintain the confidence of their investors. Dividend yields remain high, but some analysts are becoming concerned that the payout amounts will not be maintainable.

No Dividends for BP Shareholders

The BP Gulf oil spill is one area that has definitely affected dividend investors who depended on this traditionally high-yield dividend stock to diversify their portfolio. While BP was able to pay their usual $10 billion in dividend payments for the first quarter, they have suspended future payments due to public pressure to divert those funds to clean-up efforts and restitution.

Dividend Yields by Sector

While some US firms canceled dividend payments in 2009 due to the recession, you can still find dividend paying stocks in all major industrial sectors. Pay particular attention if you’re interested in adding financial stocks to your portfolio. The Financial sector has historically paid out as much as 20% of the total dividend payments reported in the S&P, but that number has shrunk to less than 10%. The trend in the yield further illustrates the lower payments as it has dropped from an average of 4.44% in 2008 to 1.22% in 2009. The Financial sector’s yield stands at 1.14% so far in 2010.

The following list shows a few of the recent yields by industry, as well as the stock that is considered to be the safest investment option by many experts:

• The Consumer Staples sector makes up 17.57% of the S&P 500 dividend total with a 3.25% average yield. Proctor and Gamble is considered a safe stock with a yield of 3.2%
• The Consumer Discretionary sector contributes 7.74% to the total with a 1.53% average yield. Wal-Mart continues to be a safe bet with a 2.5% yield.
• The Information Technology sector can claim 9.08% of the total payout with a 1.02% average yield. It’s no surprise that Microsoft is considered the safest option with a 2.1% yield.
• The Health Care sector adds 13.29% to the total with a 2.37% yield. While Pfizer’s dividends are fluctuating, it is still considered the safest choice in this troubled industry.
• The Financial sector contributes 8.82% to the S&P’s dividends with a low 1.14% average yield. Visa is considered a safe stock with a .50 payout that is expected to climb.
• The Telecom sector makes up 8.58% of the total with a 6.29% average yield. Verizon and AT&T have been close competitors in the safest stock race with a 6.7% and 6.8% yield respectively.
• The Utility sector adds 8.04% to the dividend total with an average yield of 4.75%. The American Electric Power Company is considered a safe choice with a 5.1% yield.