6 Dividend Stocks With Above-Average Yields
These reliable dividend payers span the market.
Looking for that elusive investment income? Here are six dividend-paying stocks with above-average yields and the likelihood of reliable payments. These stable companies are spread across industry sectors, from technology to banking. (All yields are as of October 29.)
Avista (AVA; yield, 3.7%) is a utility that provides electricity and gas to parts of Washington and Idaho, gas to parts of Oregon, and through a recent acquisition, electric service in and around Juneau, Alaska. The Alaska acquisition should start adding to earnings next year. This small-company stock has boosted its dividend an average of 9% annually for the past decade. Per-share earnings for the first half of 2014 have already topped the average full-year estimate of the analysts who follow Avista. Annual dividend per share: $1.27.
CA Technologies (CA, 3.5%) is making the transition from its mainframe software business to a more-modern mix including enterprise solutions and software services. "The mainframe business is dying a very, very, very slow death," says Norman Young, a senior analyst at Morningstar who follows the stock. Despite the decline, competition is limited, leading to strong profits for CA Tech. "For those who are thinking about a steady income and a steady dividend, it's not a bad company to invest in," Young says. Annual dividend: $1.00.
Meredith (MDP, 3.5%) is the publisher of Better Homes and Gardens, Family Circle and other major magazines. The company gets 73% of its revenue from its national media division, which includes magazine publishing, brand licensing and interactive media. The remainder is from its 15 owned or operated local TV stations; the company is on track to acquire two more.
The fiscal year ending in June 2015 is likely to be profitable for local TV stations, which will benefit from spending on political ads during the 2014 elections. Meredith has paid a dividend for 67 years and increased it annually for 21 years. Annual dividend: $1.73.
Royal Dutch Shell (RDS.B, 5.3%) is one of the world’s largest oil companies. Once two corporations that operated as one group, Royal Dutch Shell is now a single legal entity with "A" and "B" shares. "There's no withholding tax on the dividend" with B shares, as there is with the A shares, says Robert Mitkowski Jr., associate director of research at Value Line.
Mitkowski says the focus of the new chief executive, Ben van Beurden, "is more on financial returns." To that end, Royal Dutch Shell has been selling off North American gas assets because of low gas pricing here. Mitkowski sees "steady growth" of the dividend ahead. Annual dividend: $3.76.
Toronto-Dominion Bank (TD, 3.5%) is the second-largest Canadian bank by assets. Its U.S. retail business, TD Bank, is one of the 10 largest banking operations in the U.S. Because Canadian banks had stronger regulatory requirements, Toronto-Dominion didn't experience many of the problems that plagued its competitors in the U.S. The bank held its dividend steady in 2009 and 2010, and it managed 10% annual growth in shareholder payments over the past five years.
Through its MBNA unit, Toronto-Dominion is a major provider of co-branded and affinity credit cards in Canada. The bank also owns 41.2% of TD Ameritrade, a large U.S. discount broker. Annual dividend: $1.68.
Tupperware Brands (TUP, 4.2%) markets its iconic plastic storage containers through an independent sales force. Tupperware also sells beauty products in more than 20 countries worldwide. Some 65% of the company's global sales are in emerging markets. "The middle class is growing outside the U.S., and that's a big part of their opportunity," says Efraim Levy, an equity analyst for Standard & Poor's Capital IQ.
Tupperware's dividends increased about 14% annually over the past five years and still represent less than half of earnings. "It's a pretty stable story," Levy says. Annual dividend: $2.72.