Stocks That Pay High Dividends

The following high yield dividend stocks have increased their dividends for at least 5 years and have well covered dividends. With risk free returns hovering around 1%, these companies offer excellent return for those looking for retirement income or dividends to weather current market conditions.

Stocks That Pay High Dividends

10.4% Telefonica S.A. (TEF) – Telecommunications
9.5%   National Presto Industries (NPK) – Consumer Products
6.1%   Astrazeneca plc (AZN) – Drugs
5.5%  Lockheed Martin (LMT) – Aerospace/Defense
5.3%  Alliance Holdings GP LP (AHGP) – MLP/Coal
5.2%   Strayer Education Inc. (STRA) – Education

The most attractive stocks to consider adding to your dividend portfolio are Lockheed Martin and Alliance Holdings. At current P/E levels these stocks are attractively valued and analysts estimate double digit EPS growth next year.

Lockheed Martin (LMT) currently has a PEG ratio of 1.00, price/sales of 0.52, payout ratio of 50%, and an operating margin of 8.4%. Lockheed manufacturers a broad range of products that are vital to the defense of the U.S. and allies. The United States and numerous other nations are planning to purchase thousands of F-35 fighters. Lockheed also bought back over 13 million shares of common stock in the June quarter. Lockheed has left itself plenty of room to raise its dividend for decades to come. Even with the likelihood of reduced government defense spending, Lockheed Martin is siting on 3.5 billion in cash on hand and only 1/2 of their earnings are allocated to dividends. There was also the 9/22/11 announcement of a 33% dividend increase and share further buyback plans! With LMT’s average annual P/E of 11, its current 8.9 P/E makes this dividend stock a BUY with the added bonus of a 5.5% dividend.

Alliance Holdings GP LP (AHGP) currently has a PEG ratio of 0.89 (currently undervalued), price/sales of 1.54, payout ratio of 65%, and a hefty operating margin of 22.4%. AHGP’s has shown impressive managerial effectiveness with double digit ROA/ROE metrics.

Further Reading:
Despite Budget Cuts, Lockheed Martin Will Outperform

The following stocks have increased their dividends for at least 5 consecutive years and are yielding more than 5 percent. With the current short-term risk free rate of return at 1%, these stocks pay lucrative dividends 5x-10x higher. The main goal of dividend investing is to focus on high dividend paying stocks that have shown a history of rewarding investors with higher dividends year after year. This list of dividend paying stocks also carries lower unsystematic risk than higher yielding troubled companies. These are the top high yielding dividend stocks on the market.

If you are looking to establish a sizable position in your dividend income portfolio, consider companies that have shown a knack for rewarding shareholders with higher dividends for 30-50 years straight. Consider… CenturyLink (CTL), Pitney Bowes (PBI), Old Republic Int’l (ORI), AT&T (T), Altria Group (MO), and Cincinnati Financial (CINF).

AT&T may be the safest dividend stock on the list as they are only paying out 50% of their earnings in dividends. This leaves AT&T plenty of room to reinvest profits back into growing their company’s EPS and extra capital to increase dividends paid to shareholders in the future. AT&T’s dividend growth rate has averaged 5.4% over the past five years.

Verizon is also an interesting story as it has increased its dividend six years consecutively. A major concern with VZ is the percentage of earnings paid to shareholders via dividends (which can be assessed by analyzing the stock’s payout ratio or simply DPS/EPS) which is approaching the danger zone of 100%. However, their dividend should be covered next year as analysts expect EPS to rise by 16% and management recently announced an 2.6% dividend increase.

Stay tuned for the next update!
Stocks That Pay High Dividends

11% PennantPark Investment Corp. (PNNT) – Financial Services
10% Getty Realty Corp. (GTY) – REIT-Gas Stations
10% Inergy LP (NRGY) – MLP-Propane
9% Telefonica S.A. (TEF) – Telecommunications
9% Omega Healthcare Investors (OHI) – REIT-Health Care
9% Vector Group Ltd. (VGR) – Tobacco
9% National Presto Industries (NPK) – Consumer Products
8% Exterran Partners LP (EXLP) – MLP-Oil&Gas Services
8% Boardwalk Pipeline Partners LP (BWP) – MLP-Natural Gas
8% StoneMor Partners LP (STON) – MLP-Cemetaries
8% CenturyLink Inc. (CTL) – Telecommunications
8% United Community Bancorp (UCBA) – Banking
7% Natural Resource Partners LP (NRP) – MLP-Coal
7% Teekay LNG Partners LP (TGP) – MLP-LNG Transport.
7% Enbridge Energy Partners LP (EEP) – MLP-Oil&Gas Pipelines
7% Teekay Offshore Partners LP (TOO) – MLP-LNG Transport.
7% NuStar Energy LP (NS) – MLP-Oil&Gas Pipelines
7% Transmontaigne Partners LP (TLP) – MLP-Oil&Gas Pipelines
7% Pitney Bowes Inc. (PBI) – Business Equipment
7% Crestwood Midstream Partners LP (CMLP) – MLP-Natural Gas
7% Suburban Propane Partners LP (SPH) – MLP-Propane
7% TC Pipelines LP (TCLP) – MLP-Oil&Gas Pipelines
7% Old Republic Int’l (ORI) – Insurance
7% AmeriGas Partners LP (APU) – MLP-Propane
7% Holly Energy Partners LP (HEP) – MLP-Oil&Gas Pipelines
7% Genesis Energy LP (GEL) – MLP-Oil&Gas Pipelines
7% Targa Resources Partners LP (NGLS) – MLP-Oil&Gas Pipelines
7% Kinder Morgan Energy Partners (KMP) – MLP-Oil&Gas Pipelines
7% Energy Transfer Equity LP (ETE) – MLP-Natural Gas
7% DCP Midstream Partners LP (DPM) – MLP-Natural Gas
6% Plains All American Pipeline LP (PAA) – MLP-Oil&Gas Pipelines
6% Universal Health Realty Trust (UHT) – REIT-Health Care
6% Orrstown Financial Services (ORRF) – Banking
6% Buckeye Partners LP (BPL) – MLP-Oil&Gas Pipelines
6% Spectra Energy Partners LP (SEP) – MLP-Oil&Gas Pipelines
6% Senior Housing Properties Trust (SNH) – REIT-Residential
6% Corporate Office Properties Trust (OFC) – REIT-Office
6% Mercury General Corp. (MCY) – Insurance
6% AT&T Inc. (T) – Telecommunications
6% Altria Group Inc. (MO) – Tobacco
6% Urstadt Biddle Properties (UBA) – REIT-Shopping Centers
6% Cincinnati Financial (CINF) – Insurance
6% Enterprise Products Partners LP (EPD) – MLP-Pipelines/Services
6% NuStar GP Holdings LLC (NSH) – MLP-Oil&Gas
6% Astrazeneca plc (AZN) – Drugs
6% Sunoco Logistics Partners LP (SXL) – MLP-Oil&Gas Pipelines
6% National Retail Properties (NNN) – REIT-Retail
6% Reynolds American Inc. (RAI) – Tobacco
6% Washington REIT (WRE) – REIT-Office/Industrial
6% Textainer Group Holdings Ltd. (TGH) – Transportation
6% Cheviot Financial Corp. (CHEV) – Banking
5% Williams Partners LP (WPZ) – MLP-Oil&Gas Pipelines
5% Verizon Communications (VZ) – Telecommunications
5% ONEOK Partners LP (OKS) – MLP-Oil&Gas Pipelines
5% National Health Investors (NHI) – REIT-Health Care
5% W.P. Carey & Co. LLC (WPC) – MLP-Real Estate
5% People’s United Financial (PBCT) – Banking
5% United Bankshares Inc. (UBSI) – Banking
5% Harleysville Savings (HARL) – Banking
5% Harleysville Group (HGIC) – Insurance
5% Duke Energy Corp. (DUK) – Utility-Elec/Gas
5% Magellan Midstream Partners LP (MMP) – MLP-Oil&Gas Pipelines
5% HCP Inc. (HCP) – REIT-Health Care
5% Alliance Resource Partners LP (ARLP) – MLP-Coal
5% Bowl America Class A (BWL-A) – Recreation
5% Leggett & Platt Inc. (LEG) – Furniture/Bldg. Prod.
5% Vectren Corp. (VVC) – Utility-Electric/Gas
5% Realty Income Corp. (O) – REIT-Retail Stores