Late August brings both the dog days of summer and a flood of dividends to be captured. The temperatures will hit the high 90s at our lake in northwest Iowa, frustrating all the school children that started a couple weeks ago -- and making football practice miserable for those "Friday Night Lights" gridiron heroes toiling away at two-a-days.
A dip in the lake is always refreshing this time of year but, for we investors chained to our desks, our relief must come from market liquidity rather than liquids, and in surfing this wave of dividends about to crash over us.
The dividend wave started last week as payouts came following their respective declarations during July board meetings. The wave continues this week, so all you dividend-rotation players need to be very active, generating income when it is available -- and available it is! Take a look at this table of attractive dividends coming in the next two days.
Let me call out one name immediately: I love Lorillard (LO). This company is one of a small group of dividend champions in the tobacco group. The payouts are substantial, but the stocks trade with sufficient volatility that you can usually get out fairly quickly -- although this is never guaranteed, of course.
Lorillard stock got clocked in the correction, but it bottomed out last week, offering a better entry point than what we saw a couple weeks ago. My guess is that we may see some downside volatility after the dividend payment, since this is a high-yielding stock in a rising-interest-rate environment. Still, there is sufficient volume on both sides that I am comfortable with the trade.
Looking over the list, there are plenty of names to work with. I don't like tech for near-term fundamentals, but stable-income names such as Analog Devices (ADI) or Corning (GLW) represent good income sources that should not be impacted by rising rates.
Meanwhile, the defense names trade in a world of their own, so dividends from Lockheed Martin (LMT) and Northrop (NOC) are good plays. McDonald's' (MCD) dividend is useful now, as well, since we are past company earnings and the stock has taken the hit for soft same-store sales.