5 Higher Yielding, Lower Risk Stocks To Perk Up Your Dividend Income

As a society we have grown accustom to wanting it all, including our investments. Specifically, many income investors want both high yield and low risk. A dividend stock with a high yield doesn’t mean much if the dividend is cut or eliminated, and the stock price declines significantly.  So can an investor find both higher yields and lower risks?

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Weekend Reading Links - February 28, 2016

For your weekend reading pleasure, the articles listed below contain some of the best dividend and value investing insights found on the web. They were written by various members of the Dividend Investing and Value Network over the past week:

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Three Primary Stock Valuation Methods

Three Primary Stock Valuation Methods

Many valuation metrics are readily calculated, such as the price-to-earnings ratio, or price-to-sales, or price-to-book. But these are numbers that only hold value with respect to some other form of stock valuation.

The three primary stock valuation methods for evaluating a healthy dividend stock are:

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Canadian National Railway Dividend Increase

Canadian National Railway Company (CNR.TO/CNI) announced a 20% increase in its cash dividend. The quarterly cash dividend will increase from C$0.3125 to C$0.375 per share and payable on Mar 31, 2016 to shareholders on record as of Mar 10, 2016.

Including today’s announcement, CN has declared annual increases to its dividend 20 consecutive times, averaging 17 per cent per year, since its initial public offering of shares in 1995. The annual dividend rate goes up from C$1.25 to C$1.50. Yield going forward based on today’s closing stock price is 2.10%.

Canadian National Railway Dividends & Dividend Growth Rates

From the press release statement:

Luc Jobin, CN executive vice-president and chief financial officer, said: “We are pleased to uphold our track record of consistently returning cash to shareholders. This dividend increase is testimony to our confidence in the strong cash flow generation capacity of CN throughout business cycles, and reaffirms our objective of gradually increasing the dividend payout ratio toward 35 per cent.“

My portfolio consists of 52 shares of Canadian National Railway, which increases my annual dividends from C$65.00 to C$78.00, an increase of C$13.

This article was written by Roadmap2Retire. If you enjoyed this article, please consider subscribing to my feed at Roadmap2Retire.com/feed

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14 High Yielding Dividend Investments Qualified As Safe Heaven

With the S&P 500 down nearly 7% in the last three weeks alone, you can’t be blamed for wanting to throw up your hands and sell all your stocks. That's a stupid idea in my view.

You need to stay disciplined. If you are a long-term investor, sell-offs shouldn't care you because you have studied the long-term fundamentals and persectives of your investment and nothing chageged, you don't need to act.

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6 Dividend Growth Stocks With Very Little Debt

The goal of dividend investing is to find and buy dividend growth stocks that will continue to raise their dividends. To pay and raise its dividend a company must generate sufficient free cash flow. However, it is not enough to just generate the cash, it has to be available for dividend payments. Many companies generate significant free cash flow, but often that cash is already spoken for in the form of debt obligations.

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Weekend Reading Links - February 21, 2016

For your weekend reading pleasure, the articles listed below contain some of the best dividend and value investing insights found on the web. They were written by various members of the Dividend Investing and Value Network over the past week:

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Procter & Gamble – Don’t Get Fooled by the High PE Ratio; This Company Has Potential

Summary:

PG’s brand cutting plan will start to pay off in 2016 with stronger earnings.

The brand portfolio and distribution network improvements show better than expected results so far.

The recent stock price drop brings the yield to 3.50% and makes the company very interesting to buy.

DSR Quick Stats

Sector: Consumer Defensive

5 Year Revenue Growth: -0.68%

5 Year EPS Growth: -2.82%

5 Year Dividend Growth: 7.56%

Current Dividend Yield: 3.51%

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Stock Valuation: An Overview

There are several ways to estimate an intrinsic stock valuation. This guide covers several of the primary methods.

Stock Valuation: The Basics

Companies have an intrinsic value, and that intrinsic value is based on the amount of free cash flow they can provide during their effective lifetime. Money later is worth less than money now, however, so future free cash flows have to be discounted at an appropriate rate.

The theory behind most stock valuation methods is that the value of a business is equal to the sum value of all future free cash flows. All future cash flows are discounted due to the time value of money. If you objectively know all future cash flows of a company, and you have a target rate of return on your money, then you can know the exact amount of money you should pay for that company.

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Safe Haven Investing

During a storm, we seek shelter. Things are no different with our investments – when there is a financial storm brewing, investors seek shelter in assets, what are commonly called:  safe haven investing. Safe haven investments are investments that are expected to retain or increase its value during times of market turbulence. This article takes a look at some of the safe havens in each asset class.

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9 Multi Generation Stocks: Dividend Stocks With A 200 Year Payment History

Long-term investors looking for stocks with positive earnings growth for the future and sales boost as well. I personally look at the past performance or history of a company. 

If I see doubled sales over the past decade, it could be a good sign for a rosy business environment.

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4 Secrets To Finding The Best Dividend Stocks

Dividend growth stocks come in all shapes and sizes. Some are high-yield and low-growth, while others are high-growth and low-yield. There is an endless spectrum of stocks in between those two extremes.

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Weekend Reading Links - February 14, 2016

For your weekend reading pleasure, the articles listed below contain some of the best dividend and value investing insights found on the web. They were written by various members of the Dividend Investing and Value Network over the past week:

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20 Quick Ways to Check a Company

Investing research can be overwhelming. This is especially true for novice investors; there are just so many metrics to consider, and they all relate to each other in a large and complex whole, so how can one make sense of a set of investments and compare them?

This article is meant to provide a quick organization viewpoint in regards to scanning dividend stocks. It’s not meant to be an all-inclusive guide on how to select a company, but it provides what I consider to be among the most important investing criteria, and how they relate to each other. Some businesses, such as financial companies and partnerships will require a different set of metrics, but these work well for a large collection of dividend stocks out there.

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Recent Buy – Apple Inc

First purchase of 2016! Well, that didn’t take long…the year started off with one of the worst starts in the stock market going back a decade or so. With the depressed market comes great opportunity to buy quality assets and putting my money to work. Whenever I make a purchase, I like to share my buys to document and illustrate how I am building my income stream over the course of months/years. My main goal is simply to invest at regular intervals and build my passive income over the course of time. In a sort of ways, I am building my own pension, hoping to get to a point where I can simply live off my dividends without touching my principal investment.

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8 Best Dividend Stock Bets For 2016

After a modest year for stocks in 2015, we need to look for fresh investment ideas in 2016. To find some great dividend-stock ideas, we first looked for companies whose businesses seemed poised for decent sales and earnings growth, even in a still-challenging U.S. economy.

Next, we looked for dedication to rising dividend payments. Though many companies pledge periodic stock buybacks as a way to return capital to investors, dividend payments are commitments—and increasing that commitment says a lot about executives' confidence.

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What Determines A Dividend Stock's Yield

If income investing were as simple as picking the stock with the highest yield, everyone would be an expert. Most assume (rightfully so) that yield is heavily influenced by risk, but much more goes into determining yield. Below are several important factors that influence a stock's yield, along with some illustrative examples:

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Weekend Reading Links - February 7, 2016

For your weekend reading pleasure, the articles listed below contain some of the best dividend and value investing insights found on the web. They were written by various members of the Dividend Investing and Value Network over the past week:

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Share Repurchases: An Overview

There’s always a lot of talk about share repurchases, especially by value investors and dividend investors. Some people like them, some people don’t like them, and unfortunately, some people don’t understand them. So, this article is going to explain how share repurchases work.

What are share repurchases?

Most companies start out as private companies. When they get big enough, the owner might decide to sell his company, or he may decide that if he had a lot of extra capital, he could put it to good use in expanding his business. So, a private company can decide to offer an Initial Public Offering (IPO) where they sell some of their company to the public and therefore become a public company. Of course, the company is expensive, so it’s broken up into manageable pieces called shares. A typical public company consists of millions (or even billions) of shares. Sometimes public companies offer additional shares at a later date that further increases their total number of shares. This can be because they offer shares as compensation to certain employees, or because they want to pull in some extra capital for a perceived investment opportunity.

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Dividends Vs. Share Repurchases

Are share repurchases good or bad? The answer, as might be expected, is a bit gray.

Assuming the company has a certain amount of cash they wish to return to shareholders, the two ways they can do it are through dividends and share repurchases. Share repurchases (also referred to as a share buyback or a stock buyback) are typically more flexible for the company, while dividends are more flexible for the shareholder.

Overview

The basic answer is that share repurchases are great when the share price is undervalued, and not-so-great when the share price is overvalued. To put it into a more useful context, if you would otherwise reinvest your dividends or invest new capital into the company at current stock prices, then share repurchases are useful to you because the company basically does it for you. The alternative is that the company could pay you a higher dividend, but you’d be taxed on that dividend and reinvest it into the company anyway. On the other hand, if you would not reinvest dividends or invest new capital into the company at current prices, then share repurchases are not in alignment with your current outlook, and it would be better for you to receive a higher dividend.

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Annual Update – 2015 Review

Welcome to the annual 2015 update. This is part of  a series where I track our financial progress on a regular basis. I present four parts in this series: (i) Investment & Portfolio Update, (ii) Passive Income Update, (iii) Blog Update, and (iv) Goals Update.

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12 Value Stocks With Dividend Yields Over 3% To Consider Now!

There are plenty of stocks yielding 3% or more outside of traditional yield sectors like telecoms and utilities. Investors generally have to venture into out-of-favor industries like autos, retailing, and manufacturing to get those dividends.

Attached you can find a selection of interesting value stocks that caught my attention within recent weeks due to falling stock prices. 

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7 Dividend Stocks Yielding Over 3%, With Tiny Payout Ratios

Looking for a stock that will grow its dividend in the future and pay you handsomely now? The yield is not the only thing you need to focus on. You will also need to check the stock's Free Cash Flow Payout. This tells you how much cash the stock has left over after paying the normal operating expenses. This is the cash used to pay for acquisitions, debt obligations and dividends!

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