Keep on the Hunt for Dividends

 | Mar 24, 2014 | 8:00 AM EDT  | Comments
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Stock quotes in this article:

pm

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spls

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rsg

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csco

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syy

The huge wave of dividends from February and early March are past, and you should be enjoying the payments coming in shortly.

We will progress toward a dividend lull over the next few weeks, so keeping an eye out for every good dividend is critical to sustain your income production. There are several coming this week and next, so you should remain active, even if at a subdued level. 

The table below highlights the best of the best that are coming soon. As always, I discard those that are too small and too large, those in unattractive sectors and any that have other "hair" that I want to avoid. Of these six names, I established positions in five and am still debating one. The group is a nicely diversified selection with sufficiently large dividends (the smallest payout being 0.77%) and a good history of "working" in dividend rotation trades.

 

The best is likely to be Philip Morris (PM), since the tobaccos trade well around dividends, quickly discarding the ex-dividend drop. I have played PM quarterly for the last four years, and have rarely had difficulty with the trade. Most retailers are good for an income trade, so I am comfortable with Staples (SPLS). The current volatility in retail is really in consumer-exposed names, and obviously SPLS is a small business play with more stability. I also love the Cisco-Sysco (CSCO), (SYY) trades. The dividend attractiveness is nothing beyond normal but the name juxtaposition has attracted Wall Street's interest since the late 1990s at least. 

I am debating whether to establish a position in Windstream (WIN). WIN is similar to CenturyLink (CTL), an old-school telephone carrier in smaller markets reinventing itself in a modern internet era. I have no issues with the business. But these small telco names are owned for the income and trade relatively efficiently, so they can be hard to sell. I have been trapped in CTL and WIN on a few occasions, and the big dividend is usually more a risk factor than attraction.  

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