Dividends

Dividend ETFs: No Need to Pay up For Yield

ETF Professor — Tue, 18 Jun 2013 18:48:19 +0000

Although concerns about rising interest rates have spiked in recent weeks, investors still want yield. Now, it is a matter of what asset classes they turn to in an effort to generate income.

Yields on 10-year Treasurys were 2.19 percent as of Monday, up from 2.13 percent on June 3, according to Treasury Department data, but the reality is even at 2.2 percent, the yield on Treasurys is nothing to write home about.

Given the still anemic yields on assets that are perceived to be risk-free, it is not surprising that investors have been paying up for higher yields elsewhere. The ongoing hunt for yield has predictably prompted talk of a dividend bubble, particularly as valuations on some favorite dividend sectors have become stretched.

"A number of analysts believe dividend-paying stocks with the highest dividend yields are expensive compared to other parts of the equity market. A rise in the long-term interest rates in the U.S. put some pressure on the performance of stocks with the highest dividend yields in May," said WisdomTree Research Director Jeremy Schwartz in a research note.

Said another way, investors may want to consider different spins on dividend ETFs rather than paying up for yield with traditional sector and dividend funds. For example, the Utilities Select Sector SPDR (NYSE:

Top 4 NASDAQ Stocks In The Trucking Industry With The Highest Dividend Yield

Monica Gerson — Tue, 18 Jun 2013 08:12:31 +0000

Below are the top trucking stocks on the NASDAQ in terms of dividend yield.

JB Hunt Transport Services (NASDAQ: JBHT) has a dividend yield of 0.80%. JB Hunt's ...

Top 4 NASDAQ Stocks In The Air Delivery & Freight Services Industry With The Highest Dividend Yield

Monica Gerson — Mon, 17 Jun 2013 08:11:44 +0000

Below are the top air delivery & freight services stocks on the NASDAQ in terms of dividend yield.

CH Robinson Worldwide (NASDAQ: CHRW) has a dividend yield of 2.50%. CH Robinson's shares ...

How to Play Middle East's New EM Status With ETFs

ETF Professor — Fri, 14 Jun 2013 20:51:03 +0000

Earlier this week, index provider MSCI (NYSE: MSCI) announced its annual market reclassification and the news can be broken down three ways. There was some surprise, though arguably not much, and subsequent fallout for the relevant ETFs after Greece was demoted to emerging markets status and it was revealed that Egypt could be bumped down to frontier status in the future.

Then there was the not surprising/bland news that MSCI will keep South Korea and Taiwan as emerging markets. At least until next year's market reclassification.

The good news is that Qatar and the United Arab Emirates, as some suspected would happen, were elevated to emerging markets from frontier status. That means when MSCI conducts its semi-annual index review in May 2014, the countries will be included in the widely followed MSCI Emerging Markets Index Fund.

What is important is that ETFs that track that index will not suddenly become Qatar/UAE-heavy. In fact, MSCI told Reuters on Wednesday that Qatar will get a weight of 0.45 percent in the MSCI Emerging Markets Index while UAE will receive an allocation of 0.4 percent. A reasonable theory is that there will be ...

Top 4 Stocks In The Resorts & Casinos Industry With The Highest Dividend Yield

Monica Gerson — Fri, 14 Jun 2013 08:11:13 +0000

Below are the top resorts & casinos stocks on the NYSE and the NASDAQ in terms of dividend yield.

Carnival Corporation (NYSE: CCL) has a dividend yield of 3.10%. ...

Stocks Going Ex Dividend the Third Week of June

Fred Fuld — Thu, 13 Jun 2013 13:55:05 +0000

Here is our latest update on the stock trading technique called 'Buying Dividends'. This is the process of buying stocks before the ex dividend date and selling the stock shortly after the ex date at about the same price, yet still being entitled to the dividend. This technique generally works only in bull markets, and can work in flat or choppy markets, but you need to avoid the technique during bear markets.

In order to be entitled to the dividend, you have to buy the stock before the ex-dividend date, and you can't sell the stock until after the ex date. The actual dividend may not be paid for another few weeks. WallStreetNewsNetwork.com has compiled a downloadable and ...

Top 4 Stocks In The Publishing-Books Industry With The Highest Dividend Yield

Monica Gerson — Thu, 13 Jun 2013 09:26:34 +0000

Below are the top publishing-books stocks on the NYSE and the NASDAQ in terms of dividend yield.

Courier (NASDAQ: CRRC) has a dividend yield of 6.30%. Courier's shares closed at ...

Beware These Accidental High-Yielding ETFs

ETF Professor — Wed, 12 Jun 2013 20:15:25 +0000

Maybe he coined the phrase, maybe he did not. But Jim Cramer does deserve credit for, at the very least, popularizing the term "accidental high-yielder." We do not want to put words in Cramer's mouth, but an educated guess is that when he says "accidental high-yielder," it is in reference to a good company that has seen its shares beaten up to the point that the dividend yield is, well, accidentally high.

When it comes to ETFs, finding fair to decent yields is not difficult. Actually, the universe of dividend ETFs is rapidly expanding.

The trick is not being seduced by, in some cases, outrageously high yields on some ETFs. These yields are high for a reason(s), most of which are rarely positive. Consider the following trio.

Guggenheim Solar ETF (NYSE: TAN)
The Guggenheim Solar ETF is the most interesting case of a high-yielding ETF, at least it is the most interesting for us ETF nerds. Look at several different sources and all will show an absurdly high dividend yield for an ETF tracking a sector that usually is not a prime income destination. Yahoo Finance says TAN's trailing 12-month yield is almost 8.9 percent. Finviz says ...

Top 4 NYSE Stocks In The Industrial Equipment & Components Industry With The Highest Dividend Yield

Monica Gerson — Wed, 12 Jun 2013 08:55:42 +0000

Below are the top industrial equipment & components stocks on the NYSE in terms of dividend yield.

Emerson Electric Co (NYSE: EMR) has a dividend yield of 2.80%. Emerson ...

Top 4 NYSE Stocks In The Packaging & Containers Industry With The Highest Dividend Yield

Monica Gerson — Tue, 11 Jun 2013 08:26:00 +0000

Below are the top packaging & containers stocks on the NYSE in terms of dividend yield.

Packaging Corporation of America (NYSE: PKG) has a dividend yield of 3.30%. ...

Three Small-Cap ETFs For The Second Half

ETF Professor — Mon, 10 Jun 2013 17:48:39 +0000

Are investors losing faith in small-cap stocks? A look at some of the major ETFs that track small market capitalization fare reveals some interesting clues.

For example, the iShares Russell 2000 Index Fund (NYSE: IWM), the largest small-cap ETF by assets, has lost one percent since May 20. On the other hand, the ETF saw inflows of nearly $988 million last week alone.

Granted, it is just one week, but $988 million in new assets in a week's time is a stellar run for any ETF. In the case of IWM, it could be a sign that investors are expecting stocks to avoid the usual summer doldrums and keep rising over the next several months.

If small-caps renew their status as a leadership or merely perform inline with an up-trending broader market, investors may want to consider the following ETFs as alternatives or complements to IWM.

Vanguard S&P Small-Cap 600 Growth ETF (NYSE: VIOG)
When it comes to Vanguard small-cap funds, it is the Vanguard Small-Cap ETF (NYSE: VB) that most investors are familiar. Like IWM, VB focuses on a wide range of small-caps. The unheralded VIOG focuses explicitly on growth stocks. ...

A Look Ahead: This Week's ETFs to Watch

ETF Professor — Mon, 10 Jun 2013 10:29:51 +0000

A better-than-expected May jobs report was the catalyst to lift U.S. stocks to another strong showing last week.

Employers added 175,000 new jobs last month, but the unemployment rate rose to 7.6 percent from 7.5 percent. Still, that was enough to hearten the bulls. Over the last two days of the week, the S&P 500 surged 2.1 percent to notch a weekly gain of 0.8 percent.

All three major U.S. indexes gained more than one percent on Friday.

The good thing about the jobs report, except for the part where the unemployment rate rose and the March and April numbers were revised lower, is the part where it probably was not strong enough to bring an immediate end to quantitative easing. However, a watered down version of QE appears likely and perhaps as soon as late in the third quarter. That is a reality markets must begin reconciling.

That and plenty of other issues in the week ahead that should have a meaningful impact on the following ETFs.

ProShares UltraShort FTSE China 25 (NYSE: FXP)
We are getting right to the heart of matter with the inclusion of FXP on this week's list. Rather than recommend a short position in the iShares FTSE China 25 Index Fund (NYSE: FXI), a long position in the double-leveraged FXP could be the alluring ...

Top 4 Stocks In The Meat Products Industry With The Highest Dividend Yield

Monica Gerson — Mon, 10 Jun 2013 08:23:42 +0000

Below are the top meat products stocks on the NYSE and the NASDAQ in terms of dividend yield.

Industrias Bachoco S.A.B. de C.V. (NYSE: IBA) has a dividend yield of 1.70%. ...

Utilities ETFs Could be Vulnerable to Dividend Cuts

ETF Professor — Fri, 07 Jun 2013 18:29:39 +0000

It is an easy economic scenario to understand. Utilities, arguably more than any other sector, are adversely affected by rising interest rates. A spike in rates means higher borrowing costs for a capital intensive business and, on a historical basis, high interest rate environments have prompted some utilities to pare dividends.

Concerns over rising interest rates explain in large part why the Utilities Select Sector SPDR (NYSE: XLU) and other formerly darling utilities ETFs explain why investors have punished these products. In the past month, XLU has tumbled about eight percent, an exceptionally large, volatile move for the sector SPDR fund with the lowest beta to the S&P 500.

If one analyst is right, more pain could be ahead for some utilities stocks on the dividend front. In a note out Friday, Bernstein analyst Hugh Wynne identified eight utilities that ...

High Yield Dividend Champion Portfolio Update

Scotts Investments — Fri, 07 Jun 2013 13:43:34 +0000

In December 2010, I created a screen/hypothetical portfolio called the “High Yield Dividend Champion Portfolio.” The screen is tracked publicly as a continuous hypothetical portfolio with a starting balance of $100,000 on Scott's Investments.

Like many of the screens, strategies, and portfolios I track and prefer, the High Yield Dividend Champion Portfolio uses a small number of historically relevant ideas to create a simple, yet powerful investment plan. As I previously detailed, “Some studies have shown that the, highest yielding, low payout stocks perform better over time than stocks with higher payouts and lower yields.”

The High Yield Dividend Champion Portfolio attempts to capture the best high yield, low payout stocks with a history of raising dividends. There are numerous ways to rank high yield/low payout stocks. The screening process for this portfolio starts with the “Dividend Champions” as compiled by DRIP Investing. The list is comprised of stocks that have increased their dividend payout for at least 25 consecutive years.

In January I announced some changes to the ranking system. The changes were not due to poor performance – the strategy has returned over 60% since late 2010.

We still begin with the Dividend Champion list. The list is first sorted by yield and the lowest 50% yielding stocks ...