Diary of a Dividend Diva: In the Doldrums

 | Apr 10, 2013 | 1:30 PM EDT
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The first month of the quarter is always a slow period for dividends. Most companies will be reporting earnings in the next couple weeks, after which they will declare dividends that get paid in the second month. I usually struggle to accumulate my dividend target in the first month, although I rarely have missed it. (My target income generation is 2% per quarter, and to keep life simple, I try to accumulate one-third of it in each month.)

I usually shine during the second month because that is when ex-dividend dates flow hot and heavy, and I can overachieve on collecting income. In fact, for the last three years, my dividend partnership has paid out 10%, thanks to the massive flow in the second months of each quarter.

So anyway, here we are in the doldrums, but there are a few coming up shortly that I wanted to point out. Going ex- on April 11, meaning you must purchase them today, are the oddly named AbbVie (ABBV) and Freeport-McMoRan (FCX). Despite the weird and hard-to-pronounce name, AbbVie is paying out a respectable 0.94%. I believe this is the first dividend since it spun off from Abbott, and the board is getting them off to a good start with an approximate 4% annual yield.

Due to the relative stability of trading, healthcare names are always good dividend capture candidates. In contrast, Freeport will pay an equally attractive 0.93%, but I am more cautious of these mineral names. They can have wild daily volatility, which can quickly put you in a loss position. I am playing AbbVie, but not Freeport.

On April 15, we will get 0.66% from PNC Financial (PNC) and 0.58% from General Growth (GGP). Both of those are just OK, as they are on the low end of the dividend size I like to play. When they are that small, you need a lot of them to hit your income target. Conversely (also on April 15), Senior Housing Properties Trust (SNH) will pay a whopping 1.41%. That is a very attractive payout, but names in that sector are usually owned for the dividend and trade rather "efficiently." This means they don't bounce back as quickly from the ex-dividend drop, so buy this stock gingerly if you are going to play it.

As mentioned, the pickings are slim this month. We will try to squeak by, and get prepared for the deluge coming in May!

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