After Tuesday's down day, and another weak day likely today, I am still tiptoeing through the minefield as I look for dividend plays.
One area I feel comfortable with -- relatively speaking, since this is still a risky market -- is analog semiconductor names. They pay fat dividends and are less volatile than commodity semiconductors. The stocks are probably at bottoms, given that sentiment is low right now.
Analog Devices (ADI) reported earnings below expectations and reduced guidance after the bell Tuesday, yet the stock was down only 3% in after-hours trading, indicating most bad news was "in the stock." (Remember, with dividend captures I am not worried about making money in the stock, just having enough volume to carry me back to my buy price to get out flat.)
Two analog semi names coming soon are Maxim (MXIM), which will pay 0.96% on Aug. 19, and STMicroelectronics (STM), which will pay 1.2% on Aug. 22. (When I say "pay," I mean they go ex-dividend on that date.) MXIM could be at a good buy point, having sold off slightly in the latest swoosh downward. Similarly, STM is holding steady despite market volatility. Keep in mind that STM is a foreign stock, so U.S. buyers will lose some of the dividend to foreign withholding.
Beyond these analog semi names, I am tiptoeing into toy maker Mattel (MAT) and cigarette maker Lorillard (LO). Mattel will pay 0.92% on Aug. 29. This one is riskier, being a consumer name and consumers being under attack currently, economically speaking. The seasonal sales patterns, however, are a tailwind for toy makers, so I am taking a small position. Tobacco is always relatively safe and "uncorrelated" to some extent, so I am taking a bigger position in Lorillard. The dividend is a fat one, with 1.2% coming on the Aug. 29 as well.