Dividends4Life: Above-Average S&P Dividends With Room to Grow

Above-Average S&P Dividends With Room to Grow

Posted by D4L | Tuesday, January 31, 2012 | | 0 comments »

The S&P 500 (INDEX: ^GSPC ) is an index of 500 large-cap common stocks traded in the United States. The index is often used to track the overall economy as a whole and is often the benchmark that stock performance is measured against. With that in mind, I went looking for some dividend payers among the stocks of the S&P 500, but I wasn't looking for the highest yield. I went looking for a combination of things.

First, I tried to identify what the average dividend on the index would be. At the end of 2011, the average S&P dividend checked in at just over 2%. The second criterion I used was dividend payout ratios, looking for companies that have some earnings growth to grow dividends. I limited my search to those companies with a payout ratio below 20%. My screen returned 16 companies. I've narrowed the list to the top five based on yield: Lexmark International, Huntington Bancshares (Nasdaq: HBAN), Marathon Petroleum (NYSE: MPC), L-3 Communications (NYSE: LLL) and Valero Energy (NYSE: VLO).

Source: Motley Fool

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