November 12, 2016

Top Dividend Stocks: 3 Technology Names For 2017

Technology companies are usually not the ones which make it onto the list of top dividend stocks. In fact, investors who have more of an appetite for risk pick technology companies to capture the upside potential they offer as they develop the latest gadgets and technologies for the Internet economy.

Another reason why technology companies aren’t famous for paying top dividends is that they operate in a highly competitive industry where they have to deploy a lot of cash to invest in innovations to stay in the game.

But if you’re an income investor and looking for sustained growth in your income portfolio, you need to diversify your holdings in a way that it captures all segments of the economy. Today’s startups will reach their mature business cycle in the next few years, and that may be the time when those companies start returning cash to their shareholders in the form of dividends.

I’ve shortlisted the following technology companies with a solid track record of growing dividends each quarter and rewarding their investors who believed in their business models and their ability to ward off the competitive pressures.

Source:  IncomeInvestors

November 6, 2016

Is AbbVie's Dividend Worth the Risk?

An attractively high dividend rate may have AbbVie on income investors' radar, but there are a few things investors should know about this company before they dive in and buy the stock for its dividend payout.

AbbVie Inc. (NYSE:ABBV) investors are being rewarded with an industry-leading dividend yield of 4.5%. However, patent threats to its best-selling medicine, Humira, make investing in this dividend-paying healthcare giant a bit of a gamble. Can AbbVie thwart its patent risk, or will the company take a big hit?

What's at stake

AbbVie's Humira is the world's best-selling medicine. It's an autoimmune disease drug that costs tens of thousands of dollars per year and that's used to treat patients with a range of diseases, including the blockbuster rheumatoid arthritis and psoriasis indications.

In 2015, widespread global use resulted in Humira sales in excess of $14 billion, and in Q3, Humira's sales were running at an annualized $16 billion pace. Overall, Humira is solely responsible for 63% of AbbVie's total revenue, and that's potentially bad news, given that a key Humira patent expires in December.

5 High-Yield Dividend Stocks With Worrisome Payout Ratios

Dividends are an investor’s best friend. Not only do the payouts provide many investors with some much-needed income, but they also keep the management teams of companies focused on efficiency and profitability. Although some dividends have a lot of upside potential, not all dividends are so blessed or even guaranteed to last at all, and one of the first signs of potential trouble is a worrisome payout ratio.

In this article, we’ll examine five companies with somewhat high payout ratios that investors should look at with caution in terms of their sustainability. Those companies are Mattel, Inc. (NASDAQ:MAT), Telefonica S.A. (ADR) (NYSE:TEF), Royal Dutch Shell plc (ADR)(NYSE:RDS.A), Staples, Inc. (NASDAQ:SPLS), and Seagate Technology PLC (NASDAQ:STX).

General Electric: Be Careful What You Wish For

  • General Electric’s Oil and Gas division and Baker Hughes recently announced plans to join forces.

  • Some have suggested that this is a slam dunk win-win for all parties. I am not so sure.

  • General Electric may have bitten off more than the company can chew. This may cause margins to take a hit. The prospects for a dividend increase near term have diminished.

  • Nevertheless, there may be a silver lining for prospective and current shareholders. In the following article I provide my two cents for dividend growth investors to take or leave.

Source: SA

Why Starbucks Is Set To Become One Of The Very Best Income Stocks

Starbucks (NASDAQ: SBUX) may not appear to be of interest to income investors at first glance. That's partly because it currently yields only 1.6% and also because it is often viewed as a consumer discretionary stock. With fears surrounding a potential restaurant recession building in recent months, many investors may therefore believe that Starbucks' sales, profitability and dividend payments could suffer.

However, in my view Starbucks is a consumer staple rather than a consumer discretionary stock. This means that its earnings and dividends may not be negatively affected by a slowdown in consumer spending. Further, Starbucks has the potential to grow its profitability abroad in markets such as China over the medium term. Alongside the introduction of new products and a high dividend coverage ratio, I believe this means that Starbucks will become one of the very best income stocks around over the medium term.

Source: SA

Nike Inc (NKE): A Quality Dividend Growth Stock

Should NKE be in your long-term dividend plans?

Since its founding in sleepy Beaverton, Oregon, in 1964, Nike Inc (NKE) has grown into the world’s most dominant sports apparel supplier, and 18th most valuable brand in the world. Along the way they have made countless long-term dividend investors very rich.

In fact, from 2006 through 2015, Nike has returned 20.9% per year (including dividends) compared to the S&P 500’s 7.4% annual return.

However, over the past year, concerns over slowing sales, increasing competition from the likes of adidas AG (ADR) (ADDYY) and Under Armour Inc (UA), and falling margins have sent shares nose diving over 20%.

Learn if the king of sports apparel could be unseated from its throne and if this recent sell off makes now a reasonable time to buy what could prove to be one of the best blue chip dividend growth stocks of the next decade.

Source: InvestorPlace