Full Alert: Dividend D-Day Looms

 | Feb 21, 2014 | 12:00 PM EST  | Comments
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Stock quotes in this article:

slf

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adi

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mcd

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lmt

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d

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nee

We interrupt our regular commentary to warn you that another Dividend D-Day is approaching. As is usually the case in the middle month of the quarter, companies have all declared dividends in January and now those dividends are going ex- fast and furious. Next week has a huge flow, mostly on Feb. 26, so we need to start preparing now!

This dividend D-day is characterized more by the volume of dividends as opposed to the size. When I alerted you a couple weeks ago, I was impressed by how large many payouts were. That was a function of many stocks becoming accidental high yielders because of the January correction. The February rally has erased a bit of the yield, but there are still many attractive dividends to play.

February has been one of my most prolific months ever, due to the size of the dividends and to a number of specials that enabled one to capture high income efficiently. My goal for each quarter is to generate 2% of dividend income. I have already exceeded that goal with half the quarter to go! If you are playing along at home, you should likewise be collecting an impressive amount of income. Make hay while the sun shines -- if the correction resumes, your dividend generation may slow down significantly.

The table following shows the most attractive upcoming dividends. I have positions open in the highlighted names.

Dividend D-Day Stocks
Source: FactSet

SunLife (SLF), the Canadian insurer, is a regular of mine. You will lose 15% on the foreign withholding, if you are not Canadian, but the payout is still good. I avoid utilities such as Dominion Resources (D) and NextEra Energy (NEE) because they trade too efficiently, but semi names (especially analog semis) like Analog Devices (ADI) are reliable. McDonald's (MCD) recent results were soft, but you don't own it for the outlook, just to collect the div then be gone. Lockheed Martin (LMT) also attracted my attention; the giant defense names are studies in stability and good for the quick dividend play.

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