Diary of a Dividend Diva: A Coming Wave of Payouts

 | Jul 26, 2013 | 10:30 AM EDT  | Comments
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Stock quotes in this article:

txn

,

cag

,

bmo

,

payx

,

has

,

mwv

,

nrg

,

pfe

,

kmi

The swell is forming. The first month of the quarter is always slow for dividends, since most are declared around earnings reports, and we are just getting into the thick of reporting season. All the payouts declared this month will start to go ex-dividend in August, providing several "dividend D-days," as I like to call them.

While most of the action will be in August, the divs are starting to come now, and I am looking at a lot of activity next week to close out July. So, in order to place your buys and capture the swell of dividend income on the way, you'll need to look right now at what is coming. The table below lists the most attractive dividends coming next week. Take a look! (The names I am long are highlighted.)

Upcoming Dividends -- Last Week of July
Source: FactSet

One thing to note is that many limited-partnership distributions are coming, and I am avoiding all of them. Money is money but, for the individual investor, it seem overly burdensome to deal with dozens or more K-1 forms for units that you've possibly held for just a few days. There are plenty of dividend opportunities from regular C corporations, for which the tax treatment is far easier. 

I also can play the C corps with similar exposure to the master limited partnerships. For instance, Kinder Morgan (KMI) is paying a pleasant 1.03% on the July 29, I prefer this over Kinder Morgan Energy Partners (KMP), although the latter is paying a bit more. 

The dividend opportunities are nicely diversified. In addition to Kinder Morgan, I am playing Texas Instruments (TXN) in tech, ConAgra (CAG) in consumer staples, Bank of Montreal (BMO) in financials, Paychex (PAYX) in business services, Hasbro (HAS) in other consumer, MeadWestvaco (MWV) in industrials, NRG Energy (NRG) in utilities and Pfizer (PFE) in health care.

As the saying goes, "Am I diversified?" 

One challenge next week, which will continue in August, is that yields are coming down as the market rallies. I have to settle for somewhat smaller dividends than I would have done before and, accordingly, play more of them in order to hit my income target of 2% per quarter. That is the nature of the game -- and markets -- but it is still aggravating!

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