Best Long Term Stock Ideas

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>>> The Highest-Yielding Dividends That Are Safe to Hold




By Jon C. Ogg and Thomas C. Frohlich

May 31, 2014




http://247wallst.com/investing/2014/05/31/the-highest-yielding-dividends-that-are-safe-to-hold-2/3/



5. Chevron

> Dividend yield: 3.5%
> Annualized dividend: $4.28
> Share price: $122.65
> P/E ratio: 11.4


Chevron Corp. (NYSE: CVX) is one of the nation’s largest energy companies with operations throughout the globe. Chevron reported more than $220 billion in operating revenue last year, with earnings exceeding $21 billion, and cash from operations surpassing $35 billion. Its dividend payments totaled $7.5 billion. The highly profitable company has benefited from a growing U.S. energy industry. With the rise of unconventional drilling, the company has announced plans to expand its production in Texas’s oil-rich Permian shale, and it is also active in Pennsylvania’s Marcellus shale, which is a major source of natural gas. The dividend yield of Chevron shares is currently 3.5%, and it looks as though Chevron has the means to keep increasing its dividend for years.


6. Kraft Foods

> Dividend yield: 3.6%
> Annualized dividend: $2.10
> Share price: $58.99
> P/E ratio: 18.5

Shares of Kraft Foods Group Inc. (NASDAQ: KRFT) — owner of well-known American brands such as Jell-O, Kool-Aid, and Planters — currently yield 3.6%. According to Morningstar, the average dividend yield among Kraft’s peers is far lower at 2.2%. The company earned $2.7 billion and paid $1.2 billion in dividends last year. Unlike many other companies with high-yielding and reliable dividends, Kraft Foods is technically a very young company. It was formed in 2012 when Kraft Foods split its grocery business from its snack food operations, now called Mondelez International.


7. Procter & Gamble

> Dividend yield: 3.2%
> Annualized dividend: $2.57
> Share price: $80.69
> P/E ratio: 19.2

Procter & Gamble Co. (NYSE: PG) provides consumer packaged goods through a variety of consumer-facing retail outlets such as drugstores and grocery chains. The company has increased its annual dividend each year in the past 58 years. P&G returned $12.5 billion to shareholders last year. With both dividends and share repurchases, shareholders received 110% of the company’s earnings in 2013. Its dividend payout ratio is only about 61% for 2014. However, the company has struggled with less than stellar sales growth and slumping returns in recent years, and it brought back former CEO A.G. Lafley last year to help boost growth. Currently, the company’s shares yield 3.2%. P&G currently has a massive $220 billion market cap, which dominates its peer group.


8. Intel

> Dividend yield: 3.3%
> Annualized dividend: $0.90
> Share price: $27.10
> P/E ratio: 14.3


Intel Corp. (NASDAQ: INTC) has been criticized for missing the emergence of the smartphone and tablet markets, where it currently holds a small market share relative to rivals NVIDIA and Qualcomm. Intel CEO Brian Krzanich has stated the company hopes to have its chips in 40 million tablets by year-end. As a result of its struggles, Intel investors have had to deal with several years of lower revenue and shrinking margins. Still, the company remains a major player in the PC market, and it generated $9.6 billion in profits last year. The company’s $2.4 billion share buyback was offset by the shares issued to employees under various compensation and incentive plans. Intel still pays less than half of its earnings per share as dividends.


9. Eli Lilly

> Dividend yield: 3.3%
> Annualized dividend: $1.96
> Share price: $59.69
> P/E ratio: 21.5

Currently, Eli Lilly and Co. (NYSE: LLY) shares change hands at $59.86, up roughly 11% from a year ago but still nowhere near all-time highs set at the beginning of the previous decade. Additionally, revenue growth over the past three years was considerably lower than most other pharmaceutical companies, according to Morningstar. Among the problems the pharmaceutical giant faced have been the expiration of a number of key drug patents in recent years. Eli Lilly has not increased its annual dividend of $1.96 per share since 2009. In late 2013, Eli Lilly’s management outlined steps to maintain its dividend payout while simultaneously announcing a $5 billion share buyback plan.



10. Lockheed Martin

> Dividend yield: 3.3%
> Annualized dividend: $5.32
> Share price: $163.13
> P/E ratio: 14.9

Lockheed Martin’s stock price skyrocketed from $91.34 at the end of 2012 to $163.13 as of May 30. Despite this run up, Lockheed Martin Corp. (NYSE: LMT) still carries Buy recommendations from numerous ratings firms. The company earned $2.87 per share in its most recent quarter, exceeding Wall Street’s expectations and its reported earnings from a year ago. As the world’s largest defense contracting company, with $36 billion in arms sales as of 2012 according to the Stockholm International Peace Research Institute, perhaps it is no surprise Lockheed Martin stock is high yielding and relatively safe. The company’s market cap is more than $52 billion.

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