Dividend stocks are everywhere, but many just downright stink. In some cases, the business model is in serious jeopardy, or the dividend itself isn't sustainable. In others, the dividend is so low, it's not even worth the paper your dividend check is printed on. A�solid dividend�strikes the right balance of growth, value, and sustainability.
Today, and one day each week for the rest of the year, we're going to look at one dividend-paying company that you can put in your portfolio for the long term without too much concern. This isn't to say that these stocks don't share the same macro risks that other companies have, but they are a step above your common grade of dividend stock. Check out�last week's selection.
This week, I'll point out a "purrrrfectly" positioned company in the pet sector, Zoetis (NYSE: ZTS ) , and highlight why it could be paying hefty dividends for decades.
5 Best Financial Stocks To Buy Right Now: H.J. Heinz Company (HNZ)
H. J. Heinz Company manufactures and markets food products for consumers, and foodservice and institutional customers in North America, Europe, the Asia Pacific, and internationally. The company primarily offers ketchup, condiments and sauces, frozen food, soups, beans and pasta meals, infant nutrition, and other food products. It sells its products through its sales organizations, independent brokers, agents, and distributors to chain, wholesale, cooperative, and independent grocery accounts; convenience stores; bakeries; pharmacies; mass merchants; club stores; foodservice distributors; and institutions, including hotels, restaurants, hospitals, health-care facilities, and government agencies. The company was founded in 1869 and is based in Pittsburgh, Pennsylvania.
Advisors' Opinion:- [By Matt Koppenheffer]
7. On the H.J. Heinz (NYSE: HNZ ) deal: "It was an absolutely fair deal; I didn't have to change anything in the term sheet or the governance arrangement."
- [By Matt Koppenheffer]
There's a lot that's not surprising about the acquisition. The size, if anything, is small. Buffett's been very vocal about his desire to make "elephant"-sized purchases. Nor is it surprising that the conglomerate is expanding its reach with a steady utility business. These types of businesses add stability to the insurance and consumer-goods-heavy Berkshire. And it shouldn't be all that surprising that the price for NV Energy doesn't look all that cheap. If the�Heinz� (NYSE: HNZ ) deal reminded us of anything, it's that Buffett is willing to shell out a "full" price for a good buy.
- [By Matt Koppenheffer]
But despite the 50% stake in a joint venture to buy H. J. Heinz (NYSE: HNZ ) , which was announced recently, Berkshire's cash pile is building up again. I was hoping to hear Buffett say, "We've just bagged another "elephant."
Top Dividend Companies To Buy For 2014: Laboratory Corporation of America Holdings(LH)
Laboratory Corporation of America Holdings operates as an independent clinical laboratory company in the United States. The company offers a range of testing services used by the medical profession in routine testing, patient diagnosis, and in the monitoring and treatment of disease, as well as specialty testing services. Its routine tests include blood chemistry analyses, urinalyses, blood cell counts, thyroid tests, Pap tests, HIV tests, microbiology cultures and procedures, and alcohol and other substance-abuse tests. The company?s specialty tests and related services comprise viral load measurements, genotyping and phenotyping, and host genetic factors for managing and treating HIV infections; cytogenetic, molecular cytogenetic, biochemical, and molecular genetic tests for diagnostic genetics; oncology tests for diagnosing and monitoring certain cancers and treatments; clinical trials testing for pharmaceutical companies, which conducts clinical research trials on diag nostic assays; forensic identity testing used in criminal proceedings and parentage evaluation services, as well as testing services in reconstruction cases; allergy testing; and occupational testing for the detection of drug and alcohol abuse. Its customers include independent physicians and physician groups, hospitals, managed care organizations, governmental agencies, employers, pharmaceutical companies, and other independent clinical laboratories. The company operates a network of 51 primary laboratories and approximately 1,700 patient service centers. In addition, it delivers a co-branded electronic health records Lite solution for physician practices. The company works with university, hospital, and academic institutions, such as Duke University, The Johns Hopkins University, the University of Minnesota, and Yale University to license and commercialize new diagnostic tests. Laboratory Corporation of America Holdings was founded in 1971 and is headquartered in Burlingto n, North Carolina.
Advisors' Opinion:- [By Monica Gerson]
Laboratory Corp. of America Holdings (NYSE: LH) is expected to report its Q3 earnings at $1.80 per share on revenue of $1.45 billion.
Schlumberger (NYSE: SLB) is estimated to report its Q3 earnings at $1.24 per share on revenue of $11.58 billion.
- [By Daniel Lauchheimer]
EXAS began their pivotal DeeP-C trial earlier this year, with 10,000 patients enrolled around the USA. Success in this trial formed a pivotal fulcrum for EXAS -- success would mean commercialization, and revenue, but failure means, well failure. In April, EXAS submitted the final module of this trial, and it reported significantly worse results than expected causing the company to sink 40%. Additionally, as reported in a detailed five part series, Seeking Alpha Contributor Alpha Exposure reported on the inflated numbers both in terms of scientific research data and market projections -- yet another reason to give investors pause before they decide to invest in EXAS. Additionally, EXAS has not formed a meaningful partnership with other molecular diagnostic companies. True, it formed a partnership with LabCorp (LH), but this partnership doesn't focus on the heart of EXAS product (and thus provide it with a measure of validation), but on a commercialization post approval.
Top Dividend Companies To Buy For 2014: Spectra Energy Corp(SE)
Spectra Energy Corp, through its subsidiaries, engages in the ownership and operation of a portfolio of complementary natural gas-related energy assets in the United States and Canada. The company operates in four segments: U.S. Transmission, Distribution, Western Canada Transmission and Processing, and Field Services. The U.S. Transmission segment engages in the transportation and storage of natural gas for customers in various regions of the northeastern and southeastern United States and the Maritime Provinces in Canada. Its natural gas pipeline systems consist of approximately 19,000 miles of transmission pipelines; and storage capacity comprises 305 billion cubic feet in the United States and Canada. The Distribution segment engages in the natural gas storage, transmission, and distribution in Western Canada and the United States. This segment has approximately 37,600 miles of distribution main and service pipelines serving approximately 1.3 million residential, comme rcial, and industrial customers. The Western Canada Transmission and Processing segment provides natural gas transportation, and gas gathering and processing services; and provides services to natural gas producers to remove impurities from the raw gas stream including water, carbon dioxide, hydrogen sulfide, and other substances. This segment serves local distribution companies, end-use industrial and commercial customers, marketers, and exploration and production companies. The Field Services segment gathers and processes natural gas, as well as fractionates, markets, and trades natural gas liquids. It engages in gathering raw natural gas through gathering systems located in nine natural gas producing regions consisting of the Mid-Continent, Rocky Mountain, east Texas-north Louisiana, Barnett Shale, Gulf Coast, South Texas, Central Texas, Antrim Shale, and Permian Basin. The company is headquartered in Houston, Texas.
Advisors' Opinion:- [By Rich Duprey]
The MLP was formed by Spectra Energy� (NYSE: SE ) , and owns interests in natural gas transportation and storage assets in�theU.S., including more than 3,500 miles of transmission and gathering pipelines and approximately 57 billion cubic feet of natural gas storage.
- [By Marc Bastow]
Natural gas asset and infrastructure company Spectra Energy (SE) raised its quarterly dividend 9.8% to 33.5 cents per share, payable March 10 to shareholders of record as of Feb. 14.
SE Stock Dividend Yield: 3.8% - [By Brian Pacampara]
What: Shares of Spectra Energy (NYSE: SE ) climbed 10% today after announcing that it will drop down all U.S. transmission and storage assets to its publicly traded MLP, Spectra Energy Partners (NYSE: SEP ) .
- [By Rich Duprey]
Spectra Energy's (NYSE: SE ) �1,717-mile Express-Platte System�is one of just three major pipeline systems moving crude oil from western�Canada�to U.S. refining markets in the Rockies area and the Midwest.
Top Dividend Companies To Buy For 2014: Sysco Corporation(SYY)
Sysco Corporation, through its subsidiaries, distributes food and related products primarily to the foodservice or food-away-from-home industry in North America and Europe. The company offers a line of frozen foods, such as meats, fully prepared entrees, fruits, vegetables, and desserts; a line of canned and dry foods; fresh meats, custom-cut fresh steaks, other meat, seafood, and poultry; dairy products; beverage products; imported specialties; and fresh produce. It also supplies various non-food items, including paper products, such as disposable napkins, plates, and cups; tableware, which include china and silverware; cookware comprising pots, pans, and utensils; restaurant and kitchen equipment and supplies; and cleaning supplies. In addition, the company offers personal care guest amenities, equipment, housekeeping supplies, room accessories, and textiles to the lodging industry. It serves restaurants, hospitals and nursing homes, schools and colleges, hotels and mote ls, lodging establishments, and other foodservice customers. Sysco Corporation was founded in 1969 and is headquartered in Houston, Texas.
Advisors' Opinion:- [By Holly LaFon]
The disciplined investors at Yacktman Funds have stuck with the world�� highest quality businesses, most of which offer products or services integral to society. Their top holdings are PepsiCo (PEP), News Corp Cl. A (NWS), Procter & Gamble (PG), Microsoft (MSFT), C.R. Bard (BCR), Cisco Systems (CSCO), Sysco Corporation (SYY), Coca-Cola (KO), Pfizer (PFE) and U.S. Bancorp (USB).
- [By Dividends4Life]
Sysco Corporation (SYY) is a large distributor of food and related products, primarily to the foodservice or food-away-from-home industry. The company has paid a cash dividend to shareholders every year since 1970 and has increased its dividend payments for 42 consecutive years. Yield: 3.1%
- [By Dividends4Life]
Fair Value: In calculating fair value, I consider the NPV MMA Differential Fair Value along with these four calculations of fair value, see page 2 of the linked PDF for a detailed description:
1. Avg. High Yield Price
2. 20-Year DCF Price
3. Avg. P/E Price
4. Graham Number
GWW is trading at a premium to all four valuations above. The stock is trading at a 10.0% premium to its calculated fair value of $219.95. GWW did not earn any Stars in this section.
Dividend Analytical Data: In this section there are three possible Stars and three key metrics, see page 2 of the linked PDF for a detailed description:
1. Free Cash Flow Payout
2. Debt To Total Capital
3. Key Metrics
4. Dividend Growth Rate
5. Years of Div. Growth
6. Rolling 4-yr Div. > 15%
GWW earned three Stars in this section for 1.), 2.) and 3.) above. A Star was earned since the Free Cash Flow payout ratio was less than 60% and there were no negative Free Cash Flows over the last 10 years. The stock earned a Star as a result of its most recent Debt to Total Capital being less than 45%. GWW earned a Star for having an acceptable score in at least two of the four Key Metrics measured.
Rolling 4-yr Div. > 15% means that dividends grew on average in excess of 15% for each consecutive 4 year period over the last 10 years (2003-2006, 2004-2007, 2005-2008, etc.) I consider this a key metric since dividends will double every 5 years if they grow by 15%. The company has paid a cash dividend to shareholders every year since 1965 and has increased its dividend payments for 42 consecutive years.
Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA) or Treasury bond? This section compares the earning ability of this stock with a high yield MMA. Two items are considered in this section, see page 2 of the linked - [By Barbara Kollmeyer]
Earnings from Kellogg (K) �and Sysco Corp. (SYY) �are also due ahead of the opening bell. Shares of Berkshire Hathaway Inc. (BRK.A) (BRK.B) �could also be active after the conglomerate posted a 29% rise in third-quarter profit.
Top Dividend Companies To Buy For 2014: SuperValu Inc.(SVU)
SUPERVALU INC., together with its subsidiaries, operates retail food stores in the United States. Its stores offer grocery, general merchandise, health and beauty care, pharmacy, and fuel products. The company operates stores under the Acme, Albertsons, Cub Foods, Farm Fresh, Hornbacher?s, Jewel-Osco, Lucky, Shaw?s, Shop ?n Save, Shoppers Food & Pharmacy, and Star Market banners, as well as in-store pharmacies under the Osco and Sav-on banners. It operates approximately 2,394 traditional and hard-discount retail food stores, including 899 licensed Save-A-Lot stores. The company also offers supply chain services, which include wholesale distribution of products to independent retailers, including single and multiple grocery store independent operators, regional and national chains, mass merchants, and the military customers, as well as provides logistics support services. SUPERVALU was founded in 1871 and is based in Eden Prairie, Minnesota.
Advisors' Opinion:- [By Dan Caplinger]
On Wednesday, SUPERVALU� (NYSE: SVU ) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed, knee-jerk reaction to news that turns out to be exactly the wrong move.
- [By Mani]
Supervalu, Inc. (NYSE: SVU) is expected to release its second quarter financial results on�Oct.17�and hold a conference call on the same day at�7:00 a.m.�Central time.
- [By Selena Maranjian]
More than a handful of small-cap companies�had strong performances over the past year. SUPERVALU (NYSE: SVU ) surged 200%. The company has suspended its dividend, in order to cut costs and more effectively compete in its low-margin industry, where it also faces growing competition from Wal-Mart�and other discounters. Some rivals such as Whole Foods Market�have been able to maintain higher margins by offering organic produce and higher-end products. SUPERVALU has been reshaping itself and selling off some brands, and apparently many investors are hopeful.
- [By Rich Duprey]
As mentioned, Kroger is still swallowing Harris Teeter and has said it needs time to make more acquisitions. Royal Ahold (NASDAQOTH: AHONY ) is also said to be leery about doing large acquisitions these days, while Cerberus recently finished acquiring the Albertsons and Acme chains from SUPERVALU (NYSE: SVU ) �for $3.3 billion.
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