10 Great Dividend Stocks for 2012

U.S.News & World Report

With interest rates hovering near zero and unlikely to change soon, it's hard to find attractive investment yields. Volatile trading patterns in stocks have stabilized of late, and many investors have locked on to those with appealing dividends. Getting a nice yield can combine income with upside market potential.

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U.S. News worked with S&P Equity Research and MarketScope Advisor to find the best-yielding dividends among the small number of stocks--about 120--that carry S&P's highest "strong buy" analyst rating. But be mindful that "strong buy" doesn't translate into "slam-dunk" when it comes to returns.

With interest rates continuing to fall over the past year, dividend yields have declined as well. The yields on these top 10 stocks range from 8.69 percent down to 5.31 percent. Of note, only four of these 10 companies are based in the United States; three are in China and three in Europe.

Ranked by dividend yield, here are S&P's highest-yielding recommended stocks, based on prices late last week. Listings include ticker symbols and thumbnail descriptions provided by S&P MarketScope:

Enel SPA (ENEL). Dividend yield: 8.69 percent.

Enel is an Italian utility, involved in the production, distribution, and sale of electricity and gas in Europe, North and Latin America, and internationally.

Windstream Corp. (WIN). Dividend yield: 8.50 percent.

This company was formed through the July 2006 combination of former Alltel assets and Valor Communications and continues to grow via acquisitions. It provides telephone service to three million lines in rural markets.

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Vodafone (VOD). Dividend yield: 7.51 percent.

Vodafone, based in England, is a leading global mobile telecommunications company with a significant presence in Europe, the Middle East, Africa, Asia-Pacific, and the United States through the company's direct operations and stakes in other operators. The group's mobile subsidiaries operate under the brand name Vodafone. In the United States, the group's associated undertaking operates as Verizon Wireless.

Shenzhen Expressway Co. Ltd. (00548). Dividend yield: 7.17 percent.

Based in Shenzhen, China, Shenzhen Expressway is principally engaged in the investment, construction, operation, and management of expressways in the Pearl River Delta region. Relying on the experience accumulated over the years in the industry, the company has also progressively developed the business of construction and operation management services, as well as the advertising business along the routes of its expressways. SZE is also involved in businesses related to construction consulting and inter-network toll collection.

Allianz SE (ALV). Dividend yield: 6.37 percent.

Allianz SE, headquartered in Munich, Germany, is a leading global provider of financial services (P&C insurance, life and health insurance, and asset management) to customers in more than 70 countries. 2010 gross premiums written by non-German operations represented 79 percent of total gross P&C premiums and 72 percent of total statutory life and health premiums.

Cosco Pacific (01199). Dividend yield: 5.80 percent.

Cosco Pacific, based in Hong Kong, is the fifth largest port owner-operator globally with a primary focus in China. Its assets consist mainly of container ports along China's maritime coast and a handful of global ports, including a 49 percent stake in Singapore's PSA and 100 percent of Greece's Piraeus port.

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Altria Group (MO). Dividend yield: 5.70 percent.

Altria Group (formerly Philip Morris Companies) is a holding company for tobacco products. Philip Morris U.S.A. (PM USA) is the largest U.S. tobacco company, with total U.S. cigarette shipments amounting to 140.8 billion units in 2010 (down 5.3 percent from 2009), accounting for 49.8 percent of total U.S. cigarette sales (down fractionally from 49.9 percent in 2009). Focus brands include Marlboro (the largest selling brand in the United States), Virginia Slims, and Parliament in the premium category, and Basic in the discount category. In January 2009, Altria completed the acquisition of UST Inc., the largest U.S. manufacturer and marketer of smokeless tobacco products, for $11.7 billion.

AT&T (T). Dividend yield: 5.70 percent.

AT&T Inc. (formerly SBC Communications) provides telephone and broadband service and holds full ownership of AT&T Mobility (formerly Cingular Wireless). Plans to acquire T Mobile USA were recently scrapped.

Kinder Morgan Energy Partners (KMP). Dividend yield: 5.40 percent.

Kinder Morgan Energy Partners, L.P. (KMP) is a publicly traded limited partnership formed in August 1992. The partnership is one of the largest publicly traded pipeline limited partnerships in the United States in terms of market capitalization. In total, it transports refined petroleum products and natural gas through over 28,000 miles of pipeline. In addition, it operates approximately 180 terminals handling refined products, coal, and other materials.

China Construction Bank (00939). Dividend yield: 5.31 percent.

Headquartered in Beijing, China, China Construction Bank (CCB) is one of five state-owned banks in the country. As of the end of 2010, it ranked second largest in the PRC in terms of assets, shareholders' funds, and customer deposits, and third largest in terms of total loans and advances.

Twitter: @PhilMoeller

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