Best Dividend Paying Stocks for 2011
With an 83% success rate, AlphaProfit's stock recommendations have returned 88% on an annualized basis. AlphaProfit features best dividend paying stocks in the April 2011 Report.
While the earthquake in Japan, civil war in Libya, and concerns on Portugal's solvency caused stock prices to lose ground during the middle of March, the market has given little room for the bears to growl in 2011.
After dipping below the flat line for a few days around March 16, the S&P 500 has recouped its losses and is now up 5% for the year. Smaller cap stocks have done better. The Russell 2000 for example has gone on to set new highs for the year in April.
The bull market that started during the depths of the Great Recession has now completed its second anniversary. The S&P 500 is now up 94% from its March 2009 low while the Russell 2000 is up 140%.
Commenting on the stock market, Dr. Sam Subramanian Managing Principal of AlphaProfit Investments, LLC and Editor of AlphaProfit's Premium Service Investment Newsletter said, 'Investors who missed the bull-run now face a dilemma ... whether to get back into the market or wait for decline'.
While investors are right to exercise caution after this strong rise in stock prices, the timing of the next decline is far from certain. For one, corporations are enjoying high profit margins and M&A activity is healthy.
Inflation is picking up, making matters worse for investors sitting in cash and earning next to nothing.
'At this stage of the game, a prudent course would be to invest in dividend paying stocks rather than be out of the market', says Dr. Subramanian.
Long-term stock market studies typically show dividends to make up for a sizeable chunk of total returns.
According to a study reported in BusinessWeek, fully 43% of the S&P 500's 394% gain for the 20-year period starting on August 31, 1990 is attributed to dividends. Capital appreciation accounts for only 57%.
With dividend paying stocks, investors have some income coming right off the bat. For example, companies like AT&T (T), Verizon (VZ), Pfizer (PFE), Intel (INTC), and Abbott (ABT) all yield between 3.6% and 5.6%.
The dividend payments provided by the above stocks compare well with what is available in bond yields today.
Unlike bond coupons that do not grow to offset inflation, dividends can. Companies like PPG Industries (PPG), Cintas (CTAS), Ecolab (ECL), Coca-Cola (KO), and Chubb (CB) have been quite successful in growing their dividends over time.
Additionally, dividend paying companies tend to be the more seasoned ones. As such, they tend to hold up better during market declines.
Dr. Subramanian adds a note of caution on dividend paying stocks.
'In looking for the best dividend paying stocks, investors should not go overboard on dividend yield. Exorbitantly large dividend yields can often be a sign of trouble. Investors need to focus on total return potential instead', points out Dr. Subramanian.
Best Dividend Paying Stocks 2011
AlphaProfit's stock recommendations provided since 2009 have returned 88% on an annualized basis with an 83% success rate.
Leaving no ambiguity, AlphaProfit provides precise buy-below, sell-above, and stop-loss prices for each stock recommendation.
In recent months, the following previously made recommendations achieved the sell price targets to net AlphaProfit readers some good returns.
Dorman Products (DORM) +12.8% in 10 days
DXP Enterprises (DXPE) +20.8% in 2 days
NACCO Industries (NC) +12.9% in 3 days
The Toro Company (TTC) +9.4% in 18 days
AlphaProfit is featuring 5 of the best dividend paying stocks in the April 2011 Report just published in the Premium Investment Newsletter Service.
'Our April stock selections have meaty dividend payments and much more. The potential for dividend growth and price gains added to attractive dividends make the total return particularly compelling. These stocks are a good fit for investors seeking growth & income' stated Dr. Subramanian.
Here is a snap-shot of the types of stocks AlphaProfit is recommending:
An industry titan trading at a bare minimum double-digit P/E and 2.5% dividend yield against prospects of EPS growing 12%
A mid-sized firm poised to grow EPS 17% in the coming year ... yet trading at a 25% discount to book value
A high-quality, consistent grower yielding 2.2% in which the dent from the earthquake provides a perfect entry
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By Hulbert #1 rank winner Dr. Sam Subramanian
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AlphaProfit Investments, LLC is an independent investment research firm based in Sugar Land, TX. AlphaProfit publishes the AlphaProfit Sector
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