Big-yield stocks are nice, but only if the payouts are sustainable. Today’s screen seeks not only companies with attractive dividends and healthy payout ratios, but also with momentum and a realistic chance of growth ahead. In crunching today’s numbers, Sudip Ghosh, senior consultant at Morningstar CPMS, used return on equity (ROE) and analyst revisions over the past three months to get a read on each companies’ chances of good growth and momentum.

Industrial Alliance Insurance and Financial Services Inc. ranks as the top company in terms of combined dividend yield and growth potential. The stock has been yielding a bit more than 2.6 per cent of late. While that is near the low end on this list, the life and health insurance company boasts the lowest payout ratio in terms of cash flow, which suggests it is well positioned to boost the dividend. Rounding out the list is Contrans Group Inc., which provides trucking and logistics services throughout North America. The transportation company raised its dividend by 25 per cent at the start of the year.

Source: Globe and Mail

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Recently I made a screen of the most profitable stocks from the Dividend Aristocrats index. I thought that it makes sense to know what kind of stocks have the highest degree of profitability. The results were impressive and some of my readers liked the idea. Today I screen my Dividend Champions database by the most profitable stocks, measured by the operating margin. Because of the higher amount of screening members – the Dividend Champions list is nearly twice as big as the Dividend Aristocrats index; the results show some fresh ideas.

The 20 top stocks have a margin between 24.8 and 45.7 percent. Eleven of them are currently recommended to buy. Here are my favorite stocks: Sigma-Aldrich (SIAL), Helmerich & Payne (HP) and Franklin Resources (BEN). Take a closer look at the full list of High Margin Dividend Champions. The average P/E ratio amounts to 19.97 and forward P/E ratio is 17.34. The dividend yield has a value of 2.60 percent. Price to book ratio is 4.59 and price to sales ratio 4.50. The operating margin amounts to 32.44 percent and the beta ratio is 0.94. Stocks from the list have an average debt to equity ratio of 0.92.

Source: Guru Focus

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This article is a response to a comment to our prior article that is a fairly common point of view. We think the view is potentially dangerous and deserves a rebuttal. The commenter said: "When discussing dividend stocks, 2-3% is just too low. Not talking about risky high fliers that pay 10% +, just stocks, ETFs, and funds that pay enough to live on, say 4-8%. There are plenty of them, why discuss 2-3% payers?"

We generally disagree with the assumption behind the commenter's question. There is not a significant number of equities with 4% to 8% yields that are also high quality, low volatility and consistent dividend growers (nor that have bullish analyst ratings) - all of which we consider to be highly desirable. If an investor seeking to live on dividends selects 4% to 8% yield stocks, that investor (based on history) will not find the income to reliably and consistently grow, and will not be able to find many instances of that level of income among equities with low volatility price and high quality characteristics.

Source: Seeking Alpha

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In the aftermath of the credit crisis, most analysts were soured on real estate-related investments, including REITs — Wall Street downgraded them and expected little in the way of revenue or earnings growth. However, as many of them recovered much quicker than analysts expected, these stocks moved up quickly in Portfolio Grade rankings to become “buys” or even “strong buys.” In addition to finding a much-needed source of income, investors also enjoyed strong appreciation as REITs exceeded the Streets expectations and began to attract heavy institutional buying.

Unfortunately, it looks like REITs’ ride might be coming to an end. In the past month, we have downgraded several REITs as their Portfolio Grader rankings have begun to slip: American Capital Agency (NASDAQ:AGNC) downgrade to “C”, Simon Property Group (NYSE:SPG) ranking has fallen back to a “C", Vornado Realty (NYSE:VNO) and Annaly Capital (NYSE:NLY) have joined a growing list of REITs that are ranked either “sell” or “strong sell”.

Source: InvestorPlace

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The other day I wrote this article that took a look into the past. From an historical perspective, the article showed how some simple investments turned $65k into $400k in 19 years, with a dividend income stream of nearly $12k annually. The question now is if that performance could be replicated. While none of us have a crystal ball, I will attempt to show how 8 stocks that currently pay a dividend could potentially become the dividend winners over the next 20 years. It might or might not replicate what was shown in the previous article, but I believe these 8 stocks have the absolute potential of doing very nicely.

Ironically, 6 of the 8 stocks are held in the Team Alpha Retirement Portfolio already. 8 Stocks That Could Be The Dividend Winners Of The Future: Apple (AAPL), Cisco (CSCO), General Electric (GE), Wells Fargo (WFC), CSX Corp. (CSX), Ford (F), Microsoft (MSFT), and Intel (INTC). Each of these companies is already paying some solid dividends, but might not have paid them for very long, or might not have increased the dividends on an annual basis like the dividend winners of today have.

Source: Seeking Alpha

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