Posts Tagged ‘ex-dividend date’

Cato Corp., (CATO), An Apparel Dividend Stock With Fashionable Option Yields

Friday, July 9th, 2010

Cato Corp., is a fashion specialty retailer which is listed in the Consumer Discretionary section of our High Dividend Stocks by Sector tables. They target value and fashion-oriented females, and operate over 1200 women’s fashion stores, primarily in the southeastern U.S. They just reported that same-store sales are up 5% year-to-date, and that June sales increased 1%.  In their last fiscal quarter, ending 5/01/10, their revenue rose 8.9%, and their net income jumped 44%.

This is a conservatively managed firm, with zero debt, and it fares well in our Industry Comparison Table:

CATO Apparel Industry
P/E 11.81 16.24
Price/Free Cash Flow 11.27 19.98
Price/Book 2.11 2.88
Debt/Equity NO DEBT 28.47%
ROE (TTM) 18.09% 3.66%
ROI (TTM) 17.14% 2.26%
Dividend Yield 3.33% 1.81%

There are attractive covered calls and cash secured put options trades available for CATO.

These two covered call trades yield from 14.7% up to a potential 34.9% annualized:

(July 8. 22, 2010 closing price) Dividends Pre-expiration Expi-ration month/Call Strike Price Call Bid Premium Total Static Yield (Annualized) Potential Assigned Yield (Ann’d) Total Potential Yield (Ann’d)
$22.56 $.37 Jan.2011/$22.50 $2.25 21.7% -.06% 21.01%
$.37 Jan.2011/$25.00 $1.40 14.84% 20.2% 35.19%

For more conservative investors, there’s also an attractive put option trade, with a 22%-plus yield and a lower break-even price, listed in our Put Selling Table.

CATO pays an $.185/share quarterly dividend, with their next ex-dividend date coming approximately Sept. 10th.  They have a 35% dividend payout ratio.

Disclosure: No shares held at this time

Disclaimer: This article is written for informational purposes only.

© 2010 DeMar Marketing. All rights reserved.

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The Top 5 U.S. Dividend Paying Stocks for 2010

Friday, June 11th, 2010

Have you ever wondered which dividend paying stocks actually pay out the most money in cash dividends to their shareholders?  We posed this same question in 2009, in our article,           “The Top 5 Dividend Stocks for 2009”, a 3-part series, which identified the 5 firms who paid out the most cash to shareholders, and we explored various ways of investing in and profiting from these dividend stocks.

Four US firms made the top 5 list in 2009: AT&T, GE, Exxon, and Chevron.

In 2009, dividends were eliminated, or slashed by many venerable firms, due to the recession, particularly in the Financial  sector, which formerly accounted for over 20% of 2008 dividends paid out in the S&P, but shrank to paying out less than 10% of the total in 2009.

According to Standard & Poor’s, the average dividend yield in the Telecom Sector has taken the biggest jump so far in 2010, rising from 5.53% in 2009 to 6.29% this year, while the Financial sector has continued its yield decline, from a 2008 average yield of 4.44%, down to 1.22% in 2009, and down again to 1.14% in 2010.

The Telecom sector has many firms listed in our High Dividend Stocks by Sector tables.

Here’s how the Sectors average dividend yields and overall contributions to the overall S&P 500 ranked as of 5/26/10:

INDUSTRY SECTOR

SECTOR DIVIDEND CONTRIBUTION

SECTOR DIVIDEND YIELD

SECTOR DIVIDEND YIELD

5/26/2010

(As of 5/26/2010)

2009

Telecom Services

8.58%

6.29%

5.53%

Utilities

8.04%

4.75%

4.26%

Consumer Staples

17.57%

3.25%

2.96%

Health Care

13.29%

2.37%

2.03%

Energy

12.00%

2.35%

2.05%

Industrials

11.47%

2.28%

2.26%

Materials

3.42%

2.10%

1.76%

Consumer Discretionary

7.74%

1.53%

1.44%

Financials

8.82%

1.14%

1.22%

Information Technology

9.08%

1.02%

0.89%

S&P 500

100.00%

2.10%

1.95%

(SOURCE: Standard & Poor’s)

So, did any of the same top 2009 dividend paying stocks make it to the top 5 for 2010?

As it turns out, 3 out of 4 of these firms are poised to pay out even larger amounts of cash dividends in 2010.  As expected, GE, which cut its dividend in 2009 to $.10/quarter, from $.31/quarter, didn’t make the top 5 this year.

Here’s our list of the projected Top 5 U.S. Dividend Paying Stocks for 2010:

2010 Projected Payouts (in Billions$) Total Projected Annual Dividend/Share
AT &T  (T)

$9.92

$1.68
Exxon  (XOM)

$8.27

$1.76
Johnson & Johnson (JNJ)

$7.93

$2.11
Pfizer (PFE)

$5.81

$0.72
Chevron (CVX)

$5.79

$2.88

We’ve also compiled a list of projected upcoming ex-dividend dates and quarterly payouts/share for these Top 5 dividend stocks.

Projected Upcoming Dividend Dates Projected Quarterly Dividend/Share
AT &T  (T)

7/2/2010

$.42
Exxon  (XOM)

8/11/2010

$.44
Johnson & Johnson (JNJ)

8/27/2010

$.54
Pfizer (PFE)

8/5/2010

$0.18
Chevron (CVX)

8/17/2010

$.72

A looming issue for dividend investors is the status of the qualified dividends tax rate, which is currently at 15% until the end of 2010.  If Congress lets this tax rate simply expire, dividends could be taxed at the old 39.6% rate, which may very well inspire some dividend paying stocks to increase their payments in the fourth quarter, in order to still achieve the lower tax rate.

Disclosure: Author currently holds shares of XOM, T, and CVX.

Disclaimer: This article is written for informational purposes only.

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Ares Capital- (ARCC):A BDC with High Dividend & Put Options Yields

Friday, April 9th, 2010

Ares Capital is a Business Development Corp., (BDC), that was recently added to the Financial section of our High Dividend Stocks by Sector tables.   ARCC is a closed-end mgt. investment company which invests in US mid-market firms, via mezzanine debt, first and second lien senior loans, and warrants.  Ares just completed its purchase of ailing competitor Allied Corp., (ALD), in a drawn-out $905 million deal that began last October.

Ares looks good in our Industry Comparison table:

Ares Capital (ARCC) Misc. Financial Services Industry
Dividend Yield 9.27% ($1.40/yr) 2.82%
ROE 17.23% -4.33
ROI 75.61% -3.89
Profit Margin 83%
P/E 7.47 9.36
PEG .39 .30
Long Term EPS Growth 19% 8%
Long Term Revenue Growth 69% 0%
Price/Cash Flow/Share 9.75 12.38

ARCC’s 4th quarter 2009 earnings, (excluding one-time merger costs), beat estimates:

EPS of $.35 vs. $.33 in 2008 Q4.

ARCC’s next quarterly ex-dividend date should be approx. June 11th.

Ares closed at $15.10 this week, which puts it less than 2% below the high end of its 52-week range, ($4.12 – $15.28).  For income investors looking for a lower entry point, selling put options also offers a high yield on this dividend paying stock:

Click here to continue reading…

Disclosure: Author short puts of ARCC.

Disclaimer: This article is written for informational purposes only.

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Posted in Dividend Stocks, Option Trading | 3 Comments »