Three Dividend Plays for 2013
Howard is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
For income investors a stable dividend paying stock is their bread and butter. These stocks, however, are not always the easiest to spot. Too small of dividends and it might not be worth investors' time, too big and investors have rights to be skeptical of the longevity of the company. These three stocks offer plays in stability, good value, and in a high-paying stock with speculation of the future.
Altria (NYSE: MO) is historically the best performing stock of the past 44 years. Their brands, including Copenhagen, Skoal, and Marlboro, give MO the distinction of the largest tobacco company in the US. Altria is currently paying out dividends at a yield of 5.3% and will continue to pay shareholders since they have pledged to share 80% of their profits through dividends.
Even though smoking has declined nationally over the years Altria has still been able to bring in over $23 billion in revenue and to increase its control of the smokeless tobacco market to 55%. Altria will provide a good dividend yield for years to come and adds a historically good stock to your portfolio.
In the years to come the smoking market will shift and the government might start to bear down more on tobacco companies, but there will still be at least five more years before this needs to become a thought for investors.
Apple (NASDAQ: AAPL) ... not much needs to be said about the computing giant. The company is responsible for famed products such as the iPhone, iPod, iPad, and their Apple computers. Since the beginning of 2013 share price for Apple has been driven down below $500 and taking them off the thorn of largest company by market cap.
This fall, however, gives income investors an opportunity to get in on one of the most cash-heavy companies available. With no debt and billions of dollars sitting around in their accounts, shareholders can have confidence that their dividends will keep on coming. Apple currently is paying dividends at a yield of 2.3% and is currently trading at a P/E of 10.7. This gives investors a chance to buy in relatively cheap to a stock that should steadily pay out dividends for years to come.
Terra Nitrogen (NYSE: TNH) engages in the production and sale of nitrogen fertilizer products. It primarily offers anhydrous ammonia and urea ammonium nitrate solutions. Currently Terra offers a dividend yield of an attractive 6.8%. Terra brings in over $700 million in revenue per year and has no debt to its name.
This is good for investors looking for a steady income. The market for fertilizer should not be going away anytime soon and Terra already has a nice hold in the market. With demand for better fertilizers to be rising in the future Terra offers investors a good company to play this future demand while being paid a nice dividend, which has risen 200% since its inception in 1992, in the meantime.
Hjcranford has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!