These 2 High Dividend Stocks Go Ex-Dividend Next Week

Posted on April 25, 2013

by Robert Hauver

There are 2 dividend stocks from our High Dividend Stocks By Sector Tables, which go ex-dividend on 5/1/13: Calumet Specialty Products Partners, LP, (CLMT), and PAA Natural Gas Storage, (PAA).

CLMT is a refiner and processor of specialty hydrocarbon products, and operates six plants including operations in Northwest Louisiana, Pennsylvania, Texas and Illinois.

PAA’s business consists of the acquisition, development, operation and commercial management of natural gas storage facilities. Although PAA is listed as a Gas Utility stock on financial websites, it’s actually more of an Energy-related stock.

PAA owns and operates 3 natural gas storage facilities located in Louisiana, Mississippi and Michigan. PAA’s customers include electric utilities, local distribution companies, pipelines, natural gas producers, LNG importers, aggregators, marketers, and industrial and commercial end use customers.

Valuations: Both of these stocks are closer to the low end of their 5-year P/E range – (PNG went public in 2010, so there’s less history for it than for CLMT.)

Dividends: CLMT has a very impressive 51% dividend growth rate over the past 5 years, having raised its quarterly distributions from $.45 in 2008-2009, up to the current new $.68 payout. In fact, CLMT’s frequency of rate hikes has also increased – they raised their distributions 3 times in 2011, and 4 times in 2012, and just raised it again in the 1st quarter of 2013, to $.68 from $.65. After its 2010 IPO, PNG raised its distribution from $.21 to $.34, and then from $.35 to $.36 in 2011, where it remains currently:

Performance: Both stocks have had a strong run over the past year, especially CLMT.

Options: Although both stocks have options available, at present CLMT’s are much more compelling, particularly its cash secured puts. This strategy would make sense in light of the 93% price gains CLMT has had. This put trade offers you a 15%-plus annualized yield, and a breakeven that’s 11.55% below CLMT’s share price.

You can see more details on this and over 35 other high options yields trades in our free Cash Secured Puts Table.

If you’re also interested in selling Covered Calls, we maintain a free Covered Calls Table, which also has over 35 high yield trades.

Financials: Except for its heavier debt load, CLMT’s ratios look stronger vs. its industry than PNG’s do. CLMT has an Interest Coverage ratio of 1.64. PNG has a much higher Operating Margin than its peers, and most of its ratios are in line with its industry’s averages:

Disclaimer: This article was written for informational purposes only and is not intended as investment advice.
Disclosure: The author had no positions in CLMT or PNG at the time of this writing.

An Energy Dividend Stock WIth High Options Yields

Posted on February 4, 2013

by Robert Hauver

Energy Services stock Halliburton, (HAL), has risen over 18% in 2013, and is up nearly 35% since the November 15th lows. This is in spite of the fact that HAL recently posted 4th quarter 2012 earnings that were 32% lower than 2011 4th quarter earnings.

HAL’s 2012 full year earnings fell in its biggest region, North America, but rose in its other regions:

What are investors seeing? Analysts are predicting nearly flat 2013 sales, BUT, they’re forecasting 2014 sales to rise substantially, up 32%, which gives HAL a very low .42 2014 PEG ratio:

Dividends: HAL is certainly not a high dividend stock - it has kept its quarterly dividend at just $.09 since 2007, and yields under 1%:

High Options Yields: However, you can still earn good income from HAL, via selling options. We’ve listed below a short term trade for HAL, from our free Covered Calls Table. This April $41.00 call option pays over 18 times HAL’s quarterly dividend amount:

With HAL being so near its 52-week high, you may want to consider a more defensive way of trading it. Like selling covered call options, selling cash secured puts gives you immediate income, and a lower break-even cost, if you sell them below or close to the stock’s share price.

You can find more details on this and over 30 other put trades in our free Cash Secured Puts Table. The put income for this April trade is higher than the call income, and this put also pays much more than HAL’s quarterly dividend. (Note: Put sellers don’t receive dividends – we only list them on our tables for comparison.)

Financials: Although it has a lower Operating Margin, HAL’s Mgt. efficiency and Debt ratios are better than its industry’s averages.

Disclosure: The author held no Halliburton shares at the time of this writing.

Disclaimer: This article was written for informational purposes only and isn’t intended as investment advice.

A Defensive Dividend Stock That’s Beating The Market This Fall

Posted on November 7, 2012

by Robert Hauver

Wondering where to hide out for the rest of the year? What with Mario Draghi reminding the world of Europe’s problems, (as if we’d forgotten), and post-election profit-taking sending the S&P down 2.37% in one day, defensive dividend stocks are looking more and more attractive. Here’s an old familiar name that’s been bucking the fall pullback, and only fell .41% during Wednesday’s big sell-off.

Dr. Pepper Snapple Group, (DPS), has beaten the market since the September 14 highs, and also has done well during the summer rally. and during the spring pullback. Year to date, it has kept pace with the S&P, with a whole lot less drama:

Dividends: Since its spinoff in 2008 from Cadbury Schweppes, DPS has more than doubled its annualized dividend payouts, starting with its first quarterly $.15 dividend in December 2009, to its present $.34 level:

Earnings Valuation: DPS isn’t an undervalued high growth story. Indeed, its 2013 PEG and 5-year PEG are high, and its P/E sits above the median level of its 5-year P/E range:

You also can’t make the case for it being undervalued on a Price/Book or Price/Sales basis, vs. its peers:

Financials: However, it does have better Management Efficiency ratios, and a much higher Operating Margin than industry averages. Its debt load is higher, but it also has a higher Interest Coverage figure:

With its low beta, DPS doesn’t currently have enough volatility to offer high options yields, like some of the other dividend stocks we’ve covered in recent articles, but it looks like it can offer you some stability in these uncertain times.

Profile: Dr Pepper Snapple Group Inc. is an integrated refreshment beverage business, marketing more than 50 beverage brands throughout North America. In addition to its flagship Dr Pepper and Snapple brands, the company’s portfolio includes 7UP, Mott’s, A&W, Sunkist Soda, Hawaiian Punch, Canada Dry, Schweppes, Squirt, RC Cola, Diet Rite, Peñafiel, Rose’s, Yoo-hoo, Clamato, Mr & Mrs T and other well-known consumer favorites. Based in Plano, Texas, DPSG employs approximately 20,000 people and operates 24 bottling and manufacturing facilities and more than distribution centers across the United States, Canada, Mexico and the Caribbean.

Disclosure: Author held no DPS shares at the time of this writing.

Disclaimer: This article is written for informational purposes only and isn’t intended as investment advice.

Two Industrial Dividend Stocks With 30% Covered Call Yields

Posted on August 10, 2012

Standard Motor Products, (SMP), and Worthington Industries, (WOR), are both on a roll this summer, having rallied significantly since the June 4th lows:

Dividends: SMP goes ex-dividend next week, and WOR goes ex- in early September:

Covered Calls: As you may have noticed on the 2 charts above, both SMP and WOR are currently showing as being overbought on their respective stochastic charts. This overbought condition often offers the best covered call option yields, and also helps to lock in some of your profits. Both of these dividend stocks currently have very high options yields for their covered calls.

Here are are 2 trades from our Covered Calls Table:

Even though SMP and WOR aren’t high dividend stocks, their options pay out over 6 times their dividend amounts in these 2 trades. The WOR covered call is in the money, with a strike price that’s slightly lower than SMP’s $22.53 price per share. The SMP price is above SMP’s price per share, and thus offers an potential assigned yield of 7.64%, ($.34/share difference between the $17.50 strike price, and SMP’s $17.16 share price.) The SMP is a longer term trade, expiring on November, hence its lower annualized yield:

Disclosure: Author had no positions in any of the stocks mentioned in this article at the time of this writing.

Disclaimer: This article is written for informational purposes only and isn’t intended as investment advice.

Cummins Is Bouncing Back But Is Still Undervalued

Posted on August 3, 2012

by Robert Hauver

If you’re looking for dividend stocks that bounce back and forth in a trading range, Cummins may be one of the best stocks to buy or trade for this attribute.

Cummins, (CMI), had a rough time after lowering its 2012 revenue forecast on July 10th, down to flat, from a previous 10% estimate. CMI shares reached as low as $82.20, but since then, have rallied nearly 18%:

Click here to read more…

Disclosure: Author was short CMI put options at the time of this writing.

Disclaimer: This article is written for informational purposes only and isn’t intended as investment advice.

Worthington Industries Is On A Roll

Posted on July 13, 2012

by Robert Hauver

Looking for dividend stocks with market support?

Steel and Metal processor Worthington Industries, (WOR), has been on a roll since the June 4th lows, rising over 42%, vs. the S&P, which has gained approx. 6%. This dividend stock has done better than the Steel & Iron industry, which is up approx. 4% since June 4th, but is still down 9% for the year, vs. WOR’s big 36.72% gain:

Earnings Growth: A big part of the attraction for WOR stems from its EPS growth figures, which show it to still be undervalued on a PEG basis for next year’s earnings: Click here to read more…

Disclosure: Author had no positions in WOR at the time of this writing.

Disclaimer: This article is written for informational purposes only and isn’t intended as investment advice.

Halliburton – An Undervalued Blue Chip Dividend Stock

Posted on July 6, 2012

By Robert Hauver

Looking for undervalued dividend stocks? Energy stocks have emerged as the Rodney Dangerfields of the market in 2012, being the only sector that’s still down, (-2.92%), after this new summer rally. However, the sector has pulled an impressive reversal, gaining over 8% since the June 4th lows. Halliburton, however, hasn’t joined in the fun yet, losing -1.52% since June 4th, and is now down almost 14% year-to-date, as of 7/6/12:

HAL-PERF

In addition to being in an out of favor sector, Halliburton’s 2012 earnings are flat, but, if you look to 2013, the picture gets brighter – HAL’s EPS is estimated to grow at over 10%. Couple this with its historically low range P/E of 8.72, and you have undervalued growth. We also ran a discounted model for future Earnings growth, with a risk-free rate of 13%, and came up with an intrinsic value of $61.00 for Halliburton.

HAL-PEG

Option trading strategies vs. dividends: Although HAL isn’t listed in our High Dividend Stocks By Sector Tables, it does have some high options yields.

The covered call trade listed below expires in October, and offers a call option premium of $1.68, over 18 times the dividend amount. Since the $30.00 strike is $.93 over HAL’s current strike price, there’s an additional potential assigned yield of over 11% annualized.

Click here to read more…

Disclaimer: This article is written for informational purposes only and isn’t intended as investment advice.

VF Corp, A Dividend Stock WIth A 20% Option Yield

Posted on June 22, 2012

By Robert Hauver

VF Corp., (VFC), has been one of the best stocks to buy this year for price gains, having outperformed the market thus far in 2012, and is only 9.06% off of its 52-week highs.VFC is among the top 20 Consumer Goods dividend stocks for 2012 performance.

VFC is a $9 billion apparel and footwear powerhouse, with a very diverse, international portfolio of brands and products, including such well known brands as Lee, Nautica, Wrangler, North Face, and Timberland.

VFC-BETA

With its 2.06% dividend yield, VFC isn’t really part of the high dividend stocks universe, but you can vastly improve upon its dividends by selling covered calls or cash secured puts.

Here’s a covered call trade for VFC, that’s listed in our Covered Call Table, along with over 30 other trades with high options yields. Click here to read more…

Disclaimer: This article is written for informational purposes only and isn’t intended as investment advice.

2 Dividend Stocks With 25% Covered Call Yields

Posted on June 15, 2012

By Robert Hauver

Looking for dividend stocks with high options yields? With the market moving more towards the upside, call option prices have started to rise accordingly. Here are 2 of the over 30 dividend paying stocks listed in our Covered Calls Table, which each have a combined option and dividend yield of 25% or more:

MGA-TGH-CALLS

Dividends: TGH, which is listed in the Industrials section of High Dividend Stocks By Sector Tables, increased its quarterly dividends to $.40, from $.37 in 2012. This was the 9th consecutive dividend increase for TGH. MGA increased its quarterly dividends to $.28, from $.25, in the first quarter of 2012.

Click here to read more…

Disclaimer: This article is written for informational purposes only and isn’t intended as investment advice.

Cummins – An Oversold And Undervalued Dividend Stock

Posted on June 1, 2012

By Robert Hauver

The market has fallen out of love with stalwart Industrial dividend stock Cummins, (CMI), sending its shares down over 16% in May. Lowered guidance from fellow equipment maker Joy Global, (JOY), has also helped to depress CMI’s shares this week. JOY cut its guidance approx. 3.4 to 4.5%, down to a $7.15 to $7.45 range, and trimmed its revenue guidance by approx. 1.8%, based on weaker mining equipment demand from US coal miners.

Here’s the anomaly and the opportunity: JOY’s coal mining equipment business is slowing in the US because of the ongoing natural gas boom, which is causing utility and other power users to switch from more expensive, dirtier coal, to cheaper, cleaner natural gas. BUT, as the biggest natural gas and hybrid bus engine manufacturer in the US market, Cummins will gain from this shift from coal to natural gas, as more fleet owners switch to these natural gas and hybrid engines.

How to play it: Click here to read more…

Disclaimer: This article is written for informational purposes only and isn’t intended as investment advice.