2 Blue Chip Dividend Stocks Going Ex-Dividend Soon, With High Options Yields

by Robert Hauver
Looking for a safe way to increase your yields?
Our DoubleDividendStocks.com investing service has been specializing in combining options-selling with high dividend stocks since 2009.

Our Covered Calls Table features over 25 covered calls trades, which we update throughout each reading day. Two trades that caught our attention this week are for blue chip dividend stocks Boeing, (BA), and Intel, (INTC).

Both BA and INTC go ex-dividend in early August:  BA goes ex-dividend ~8/9/18, and INTC goes ex-dividend ~8/6/18. They both have conservative payout ratios, but a relatively low dividend yield.

Although neither one is in the realm of high divided stocks, you can make up for that, via selling covered calls. The August quarterly dividends make for an attractive setup for these covered call plays.
For BA, we chose a $365.00 call strike which is ~3% above its current $354.44 price/share. This call strike pays $5.20, with a tight bid/ask of $5.20/$5.30.
The $5.20 call option payout is ~3X BA’s quarterly $1.71 dividend. It transforms it from a ~7% annualized yield to a ~21% annualized yield, since the trade has just 25 days until it expires.

Here’s a breakdown of the 3 profitable scenarios for the BA trade. Since the $365.00 call strike is $10.56 above BA’s price/share, there’s ample compensation for potentially missing out on the quarterly $1.71 dividend, if the shares rise to $365.00 and get called away prior to the August ex-dividend date. We listed the nominal yields for each scenario:

The INTC trade is right at the money, with a $52.50 call strike, vs. INTC’s $52.30 price/share. The call bid of $1.44 is well over 4X INTC’s $.30 quarterly dividend.

Since both BA and INTC have had very strong price gains in the past year, and are fairly close to their 52-week highs, here’s another strategy to consider.
We’ve added these August put-selling trades to our Cash Secured Puts Table, which has over 30 trades that are updated throughout each trading day.
The August $345.00 BA put strike pays $6.40, which is well over 3X BA’s quarterly dividend, and offers a breakeven of $338.60.
The INTC August $50.00 put pays $.81, which is over 2X INTC’s $.30 quarterly dividend, and has a breakeven of $49.19.
There are plenty of other Put option and Call option strike prices you can choose from. As you get further away, (higher) from the underlying stock’s price/share, the call option bid premiums are lower in value. Conversely, lower put strikes don’t pay as much as those which are closer to the underlying stock’s price/share. One other note – put sellers don’t receive dividends.

As we noted above, both BA and INTC have had quite a price run over the past year – BA is up 68.77% and INTC is up 49.38%.

Price Targets:
At their current prices, both BA and ~12% below analysts’ consensus target prices.

That bodacious ROE figure for BA isn’t a typo – BA’s management has opted to use more debt than equity in financing its growth over the years. So, its ROE is very high, but its Debt/Equity ratio is also quite high, vs. industry averages.
Like BA, INTC has stronger than average ROA, ROE, and ROI figures, and also has a much better Operating Margin. Its Debt/Equity ratio is higher than industry averages, but not nearly as much as BA’s is.

All tables furnished by DoubleDividendStocks.com, unless otherwise noted.

Disclaimer: This article was written for informational purposes only, and is not intended as personal investment advice. Please practice due diligence before investing in any investment vehicle mentioned in this article.

Author owns no shares of BA or INTC at present time.
Copyright 2018 RH Group Inc. All Rights Reserved.

2 Specialty Foods Stocks For Income Investors

by Robert Hauver
Have you noticed how radically the offerings at your local markets have changed? Consumers are demanding more variety, and more healthful choices. Specialty foods, previously seen as exotic, such as artisanal cheeses, meats, smoked seafood, formerly hard-to-find exotic cooking ingredients or sauces, an increasingly wider array of beverages, and organic foods of all types now fill the grocery aisles.

The growth of the organic food industry has been accelerating over the past decade, and now represents over 4% of $760 billion annual food sales in the U.S.  Many specialty and organic items come from small, privately held firms, but there are ways than investors can access the specialty foods industry.

We examined the specialty food industry, with an eye to solid, publicly traded companies that income investors could benefit from, and we came up with these 2 dividend stocks:
Click here to read more…

How To Earn Dividends from Amazon

by Robert Hauver
We’ve all seen the headlines often- “Brick and Mortar Chain Store To Close More Stores”, over the past few years. as online retailers, notably Amazon, AMZN, keep gobbling up a bigger slice of the retail pie.
Unfortunately for income investors, AMZN isn’t in the realm of high dividend stocks – in fact, it’s not even in the universe of dividend paying stocks yet, as its management keeps reinvesting in the business. Given the stock’s trajectory, and the company’s revenue growth, the market has no problem with this at all.
So, what’s an income investor to do about this situation? How can we get an income-producing piece of this retail juggernaut?
We offer you 3 vehicles to do just that in this article: Click here to read more…

2017 Healthcare Update: 2 Healthcare Dividend Stocks With Low Debt

by Robert Hauver
Looking at Sector performance for 2017, it appears that Healthcare has regained some of its luster – it’s the 2nd leading sector, behind Tech, and is up nearly 8% in 2017:

Even though there’s a lot of uncertainty in the US revolving around the future of the Affordable Care Act, the bottom line is that America, like most industrialized nations, is aging rapidly. You’ve probably heard that attention-grabbing statistic – “10,000 Americans are turning 65 every day”. That certainly means that we’ll be needing more, not less, healthcare in coming years, regardless of what happens in DC.
With this in mind, we searched for some healthcare dividend stocks with steady payouts, good dividend coverage, an attractive dividend yield, and, to keep the rate hike fears at bay, low debt.
We came up with 2 companies, both of which are micro cap stocks, in the $50M – $300M range, in the Medical Equipment sub-industry: Click here to read more…

Defensive Utility Dividend Stocks Beating The Market In 2017

by Robert Hauver
Is the post-election rally over? Maybe it’s just slowing down, with some investors taking profits, and others adopting a “wait and see” posture, as we head toward next week’s Fed meeting, where it seems more than likely that they’ll raise rates again. There’s also the uncertainty of future policy execution in DC, coupled with the upcoming French and Dutch elections. Suddenly, there’s more for investors to worry about…
In light of this altered landscape, we examined the defensive Utility sector, also well known as having many dividend stocks. It’s represented here by the popular ETF, XLU, which serves as a proxy for the sector on many financial websites.
Even though the S&P has had an impressive gain of 5.69% over the past 3 months, the Utilities ETF has outperformed, rising 8.28%:

Here are XLU’s top 10 holdings – Florida-based Next Era Energy, NEE, is the fund’s largest holding, at 9.45%:

(Source: YahooFinance)
Valuations: This table ranks them by lowest P/E ratio, where electric utility PPL Corp., PPL, leads the pack by a wide margin. It’s interesting to note that PPL is also among the leaders for dividend yield – (see the Dividends table further on in this article for more info).

Performance: The first 4 stocks in this table have outperformed the group average and the S&P 500’s performance year to date in 2017, and also over the past trading month.

As the market has gotten a bit choppier, some Utilities have had more appeal, in spite of the impending advent of rising rates. Edison International, EIX, NEE, and Sempra Energy, SRE, are the 3 top performers in this group so far in 2017, and over the past month.

Dividends: However, those 3 leaders are among the lowest, when ranking by dividend yield. Of course, their yields declined, as their price/share advanced strongly over the past year, from 15% to over 20%.
Note: PPL’s next ex-dividend date is tomorrow, 3/8/17, so we should see it adjust downward for the $.395 quarterly dividend. PPL, NEE, SRE, and EIX have the lowest dividend payout ratios in this group, which speaks to the strength of their earnings, and their conservative cash allocation.

You can track the current prices and dividend yields for several of these stocks in the Utilities section of our High Dividend Stocks By Sectors Tables.

Options: We’ve listed this June call trade for NEE in our free Covered Call Table, which has more details about this and over 25 other call-selling trades. NEE has one $.983 quarterly dividend due during the term of this trade. The June $135.00 call strike has a bid of $2.00, about 2x the amount of the next dividend.

You can also track a June NEE put option trade, in our Cash Secured Puts Table, where we track over 25 other income-producing, put-selling trades.

Price Targets: As income and value investors, we’re always faced with the same conundrum – which do you favor more – dividend stocks with an attractive dividend yield, vs. finding undervalued stocks.
As this table illustrates, these stocks are all either close to or above their consensus price targets right now – analysts upward price revisions haven’t kept up with the price advances of this group. This makes sense, given that higher rates will create higher operating expenses for these capital equipment-heavy companies.

Financials: The relative debt loads for these companies shows that the 4 performance leaders, EIX, NEE, SRE, and PCG, all have Debt/Equity loads which are lower than the average for this group. Even if rates aren’t going to rise to much higher levels, the market is rewarding lower debt loads in this sector.

Disclosure: Author held no shares of any of the stocks mentioned in this article at the time of publishing.
Disclaimer: This article is written for informational purposes only, and isn’t intended as personal investment advice.
Copyright 2017 RH Group Inc. All Rights Reserved

3 Monthly High Dividend Stocks Yielding Over 8%

by Robert Hauver
Are you trying to smooth out monthly dividend income? While many high dividend stocks pay in certain quarterly cycles, (most notably – February, May, August, and November), unfortunately, those monthly bills keep coming don’t they? It would certainly help to have dependable high yield dividends hitting your account every month.

We’ve added quite a few monthly high dividend stocks to various sections of our High Dividend Stocks By Sector Tables over the past few months. Interestingly, a lot of these stocks are based in Canada, where they were founded as royalty trusts a few years ago.
Click here to read more…

5 High Dividend Shipping Stocks Going Ex-Dividend Soon

by Robert Hauver
Looking for more income from your portfolio? Income investors have been hopping aboard shipping dividend stocks in 2016, enticed by their high dividend yields.
This sub-industry has certain companies which are becoming more well-known for their stable business models, which are based upon long term contracts, with solid counter parties. After all, who doesn’t want to have a glimpse into the future? These stocks will typically have around a 5-year or longer remaining length of time on their contracts, not including options to extend.

They’ve all IPO’d within the past approx. 5 years, and their cash flow and earnings growth is based upon a “dropdown” model, in which their parent companies, usually known as sponsors and/or general partners will sell them assets, which already have signed contracts on them.

2 of these stocks…
Click here to read more…

5 Utility Dividend Stocks With Upside Potential

by Robert Hauver

With the S&P 500 finally in positive territory year-to-date, we took a look at what’s been working in 2016. Topping the list is the Utility sector, which has been the go-to sector for income investors, and even non-income investors in this volatile market.

Healthcare, formerly the leading sector for quite a while, has fallen out of favor, thanks to political headline risk due to prescription overpricing by some firms. meanwhile, the Utility sector is up over 12% in 2016, leading all others by a wide margin. Even the resurgent Energy sector, which is up 12% over the past month, trails Utilities by a wide margin:
With all of the strong price performance in the Utility sector, we wondered if there were any dividend stocks left that weren’t already above their consensus analyst price targets. We came up with these 5 stocks…
Click here to read more…

A Safe Haven: Community Bank Dividend Stocks

by Robert Hauver
Looking for a place to hide from the recent market turmoil? With the market’s 800+ point swings over the past week, you’re surely not alone in looking for more stability. Interestingly, it has been hiding in plain sight for much of the past year, in the Community Bank industry.
These are micro cap stocks, usually with market caps below $300M, and with a small amount of branches, often fewer than 5-10. We’ve held various community bank dividend stocks over the years, and, over the past 52 weeks, one bank in particular has been a safe haven holding for us: Access National Corporation, (ANCX), a 5-branch bank in the DC area.
Profile: Access National Corporation is the parent of Access National Bank, a commercial bank serving middle market businesses and associated professionals throughout the Washington D.C. region. The Banks core services include commercial credit, deposit, investment, cash management, private banking and real estate finance. The Bank also has subsidiaries that provide wealth management, retirement planning, securities brokerage and equipment leasing.
Dividends: Click here to read more…

The 7 Best Dividend Stocks In 2015

by Robert Hauver
Are you wondering which dividend stocks outperformed in the first quarter of 2015? The past 6 months have been a roller coaster for many dividend stocks – thanks to the Crude Oil Crash, quite a few Energy-related stocks either trimmed or eliminated their dividends altogether.

The 7 top performers for Q1 2015 are a diverse group, ranging from publishing to business services, to apparel, to home furnishings, to Refining and Energy Services.
Interestingly, 2 of the top 3 performers in this group have a modest dividend yield of less than 2%, and a total of 4 out of 7 have low dividends:

PERFORMANCE: Other than Courier Corp., which is being bought out, the main catalyst for the outperformance of these stocks has been good earnings. (More about ALDW’s possible buyout below).

Dividends: We’ve been tracking the 2 highest yielding stocks within this group in the Energy section of our High Dividend Stocks By Sectors Tables– CSI Compressco, (CCLP), and Alon Partners LP, (ALDW).
Click here to read more…

Copyright 2015 DeMar Marketing. All Rights Reserved