comfortable retirement, then there is no risk-free path. Yield and risk tend to follow each other. As risk increases, the investor demands more yield to compensate for that risk. Sometimes it is desirable to accept higher risk for a higher yield. Other times we may be accepting higher risk and are not being adequately compensated for the additional risk.
A stock with a high yield doesn't offer much if the price significantly declines after its dividend is cut or eliminated. Fortunately, the market does not always behave in a rational manner. This will sometimes create an abnormal relationship between risk and yield.
As a society we have grown accustom to wanting it all, including our investments. Specifically, many income investors want both high yield and low risk. Sometimes individual stocks find themselves in the unusual position of providing both higher yields and lower risks. If you don't look for them, you will never find them.
This week week, I screened my dividend growth stocks database for stocks rated as Low risk and with yields above 4%. (Click here to see how I calculate Risk.) The results are presented below:
Kimberly-Clark Co. (KMB) | Yield: 4.1%
Kimberly Clark Corp. is a global consumer products company that produces tissue, personal care and health care. Its brands include Huggies, Pull-Ups, Kotex, Depend, Kleenex, Scott and Kimberly-Clark.
Nucor Corporation (NUE) | Yield: 4.1%
Nucor Corporation is the largest minimill steelmaker in the U.S., and has one of the most diverse product lines of any steelmaker in the Americas.
Nextera Energy, Inc. (NEE) | Yield: 4.2%
FPL Group Inc. (formerly FPL Group) is the holding company for Florida Power & Light and NextEra Energy Resources.
Middlesex Water Co. (MSEX) | Yield: 4.2%
Middlesex Water Co. primarily provides regulated water utility service in parts of New Jersey and Delaware, as well as operates wastewater systems and conducts municipal contract operations.
Community Trust Bank Corp. (CTBI) | Yield: 4.6%
Community Trust Bank Corp. owns and operates Community Trust Bank, Inc. of Pikeville, KY, which provides commercial banking services in Kentucky andWest Virginia; and a trust company.
Black Hills Corporation (BKH) | Yield: 4.9%
Black Hills Corp. is a diversified South Dakota-based holding company that encompasses electric utility and integrated energy businesses.
Vectren Corporation (VVC) | Yield: 5.1%
Vectren Corp. is an energy holding company that delivers gas and/or electricity to more than one million utility customers in Indiana and Ohio, and offers other energy related products and services.
Cincinnati Financial Corp. (CINF) | Yield: 5.8%
Cincinnati Financial Corp. markets primarily property and casualty coverage. It also conducts life insurance and asset management operations.
Washington Real Estate Investment Trust (WRE) | Yield: 6.8%
Washington Real Estate Investment Trust is a real estate investment trust that owns and develops income-producing real properties in the greater Washington metro region.
As with past screens, the data presented above is in its raw form. Some of the the companies would be disqualified for poor dividend fundamentals. However some of the others may be worth additional due diligence.
My database, D4L-Data, is an Open Office spreadsheet containing more than 20 columns of information on the 210+ companies that I track. The data is sortable and has built-in buttons and macros to make it easy to use. Companies included in the list are those that have had a history of dividend growth. The D4L-Data spreadsheet is a part of D4L-Premium Services and is updated each Saturday for subscribers.
Full Disclosure: Long KMB, NUE, CTBI, VVC, CINF. See a list of all my dividend growth holdings here.
- Life is a Choice
- The Will to Win
- Who is Ben Grossbaum and Why Should We Listen to Him?
- Discounted Cash Flow Model (DCF)
- John D. Rockefeller Quotes
- This Sword Has Two Edges!
Tags: [KMB] [NUE] [NEE] [MSEX] [CTBI] [BKH] [VVC] [CINF] [WRE]
Popular Posts - Last 7 days
Linked here is a detailed quantitative analysis of Waste Management, Inc. (WM). Below are some highlights from the above linked analysis: ...
I am not a stock trader; I am a dividend and value based long-term buy-and-hold investor. When I add a stock to my dividend portfolio, it is...
Each Sunday I highlight any notable articles that I came across over the past week. Though I may not always agree with each of the articles ...
Linked here is a detailed quantitative analysis of McDonald's Corporation (MCD). Below are some highlights from the above linked analys...
Presented below are my dividend stock and ETF/CEF holdings. This is not a recommendation to buy these securities. I have classified some of...
If income investing were as simple as picking the stock with the highest yield , everyone would be an expert. Most assume (rightfully so) th...
Monday, October 31, 2011 will mark my fourth full year of writing as Dividends4Life . It is hard to believe another year has passed. Like th...
Linked here is a detailed quantitative analysis of ConocoPhillips Co. (COP). Below are some highlights from the above linked analysis: Co...
Like many that came before me, I am on a journey to construct a portfolio that will provide me... Dividends 4 Life
D4L-Premium Services is designed to provide the busy dividend growth investor with a wealth of relevant information. Each week the D4L-Premi...