Rising Dividend Stocks That Don't Care About the Fiscal Cliff

TheStreet.com

NEW YORK (TheStreet) -- I am reading nonstop negative news about the fiscal cliff and the possibility the European economy will fall off the map.

You most likely are reading the same, and perhaps you're wondering whether any stocks are moving higher. After all, even one of my favorite stocks, Apple AAPL , is under pressure as a result of a selling feedback loop.

A selling feedback loop occurs when investors who would otherwise prefer to continue holding a stock find themselves forced to sell because of margin calls (self-imposed or otherwise) and stop-losses. Initial selling may be caused by an internal or external force. Once started, more selling begets more selling, and round and round the loop spirals lower.

In Apple's case, the most likely catalyst for the initial selling was the expectation that taxes on capital gains would rise. The selling has driven Apple shares to less than $600, which is a gift by most metrics.

Nevertheless, there are other stocks that are climbing and that pay big dividends. I'm talking steady quarterly dividends, not just the one-time special dividends.

In today's crazy "fiscal cliff is here, is not here" market, it's not so easy to separate the winners from the losers, but here are a few bullish high-yield companies for your review.
CAG Dividend Yield Chart
CAG Dividend Yield data by YCharts

Conagra Foods CAG

Background: ConAgra Foods operates as a food company primarily in North America. The company operates through two segments, Consumer Foods and Commercial Foods.

52-Week Range: $23.64 to $29.97

Book Value: $11.22

Price-to-Book Ratio: 2.6

Earnings Payout Percentage: 63%

TheStreet's Jim Cramer writes about Conagra Foods ConAgra-Ralcorp Deal Speaks Volumes in this article.

Shareholders receive $1 annually in dividend payments. The yield is 3.4%, based on the recent high.

Shares have moved higher in the last month, with most of the gains taking place within the last couple of weeks. In the last week of November, Conagra gapped higher again for the second time since mid-September.

Analyst opinion is mixed. As I write this, Conagra Foods has seven buy and eight hold recommendations. No analysts rate it a sell, but the hold ratings may have missed a good opportunity. In the last 12 months, the shares have really moved higher. The one-year return is 16%, and the average analyst target price for Conagra Foods is $33.60. After adding in dividends, investor return during the last year is more than 20%.

Ken Griffin of the famous Citadel fund owned more than 6 million shares of Conagra in the latest filing. Griffin is good company to have when you own a stock. The short-sellers are not betting against Conagra or Citadel, and only 1.4% of the trading float is reported short.

Considering the explosive price action in the last six months, look for dips and overall market weakness as entry opportunities.

CAG Payout Ratio TTM Chart
CAG Payout Ratio TTM data by YCharts
WAG Dividend Yield Chart
WAG Dividend Yield data by YCharts

Walgreen WAG

Background: Walgreen and its subsidiaries operate a network of drugstores in the U.S. It provides consumer goods and services, pharmacy, and health and wellness services through drugstores, as well as through mail, and by telephone and online. For people who travel, Walgreen is almost mandatory. The ability to conveniently refill prescriptions anywhere in the country is one of the key advantages Walgreen enjoys in this space.

52-Week Range: $28.53 to $37.35

Book Value: $19.32

Price-to-Book Ratio: 1.9

Earnings Payout Percentage: 39%

Walgreens currently pays $1.10 per share in dividends for a yield of 3.1%. No one knows for sure what dividend taxes will look like in 2013 and beyond (epic failure from Washington), but regardless of the tax rate, we still want to make money. A dividend yield of more than 3% with a rising stock beats a passbook savings account any day of the week.

Shares have moved higher in the last month, with a 6.6% improvement.

Analysts have not reached a consensus on this one. All else being equal, it's a bearish indication when the majority of analysts don't get behind a stock. Analysts love to push stocks, and no accord is almost the same as a sell rating. Thirteen of 26 rate this stock a hold. Ten recommend buying it, and three recommend selling it. The stock has appreciated 4% in the last year, and the average analyst target price for Walgreen is $38.76.

Presently, the percentage of float that has been sold short is insignificant at 2.4%.
WAG Payout Ratio TTM Chart
WAG Payout Ratio TTM data by YCharts
TXN Dividend Yield Chart
TXN Dividend Yield data by YCharts

Texas Instruments TXN

Background: Texas Instruments, Inc. is a global semiconductor company and one of the world's leading designers and suppliers of digital signal processors and analog integrated circuits. Other semiconductor products include standard logic, application-specific integrated circuits, reduced instruction-set computing microprocessors, microcontrollers and digital imaging devices. TI may be best known for making calculators so advanced, most people have no clue how to operate them.

52-Week Range: $26.06 to $34.24

Book Value: $10.17

Price-to-Book Ratio: 2.9

Earnings Payout Percentage: 44%

The company currently pays 84 cents per share in dividends for a yield of 2.8%. Not quite 3%, but based on Texas Instrument's history of dividend increases (including 2009 when many companies cut back), and current low payout rate, 3% may be in the near future.

Shares have traded slightly lower in the last month of trading. Shares are near even from a month ago. Let the shares come in a little more and don't chase TI; an entry below $30 is best.

Most of the analysts -- 26 out of 44 -- give this stock a hold rating. Fourteen rate it a buy, and four rate it a sell. TI's short interest as a percentage of float is inconsequential at 2.3%.
TXN Payout Ratio TTM Chart
TXN Payout Ratio TTM data by YCharts
BBD Dividend Yield Chart
BBD Dividend Yield data by YCharts

Banco Bradesco S.A. BBD

Background: Banco Bradesco provides a range of banking and financial products and services to individuals; large, mid-sized, and small companies; and local and international corporations and institutions. It operates in two segments: Banking; and Insurance, Pension, and Capitalization Bonds.

52-Week Range: $13.17 to $19.09

Book Value: $8.50

Price-to-Book Ratio: 2

Earnings Payout Percentage: 76%

Shares have moved higher in the last month, with a 4.8% improvement.

Banco also provides investors with the ability to gain exposure to fast growing Brazil. While Brazil is not without issues, the government appears dedicated to making the right social and market-driving choices to ensure future prosperity. Banco is well positioned to capture the growth.

Shareholders receive 12 cents annually in dividend payments. The yield based on a recent price is 0.8%. The current yield isn't enough to write home about, but I like the historic increases in dividend, as well as the diversification into South America. The stock has traded in a wide range for the past year, so this is one I would buy only on dips. Keep Banco on your radar, though, and pay close attention for a dip to less than $16 a share.

There is almost zero desire by short sellers to move against this stock. Short interest hardly moves the needle, accounting for only 1% of float.
JPM Dividend Yield Chart
JPM Dividend Yield data by YCharts

JPMorgan Chase JPM

Background: J.P. Morgan Chase & Co. is a leading global financial services firm. The firm is a leader in investment banking, asset management, private banking, private equity, custody and transaction services and retail and middle market financial services. A component of the Dow Jones Industrial Average, JPMorgan Chase is headquartered in New York and serves more than 30 million consumer customers and the world's most prominent corporate, institutional and government clients.

52-Week Range: $30.42 to $46.49

Book Value: $50.18

Price-to-Book: 0.8

Earnings Payout Percentage: 23%

This stock currently has an annualized dividend of $1.2, yielding 2.9%. Goldman Sachs GS and JPMorgan Chase are my two favorite investment banks. Both are now considered "banks" after the financial meltdown, but in the long run, I believe investment banking, trading, and big money positions will drive earnings for both companies.

More than half the analysts covering JPMorgan rate it a buy (including strong buys). Shares gained more than 22% in the last 52 weeks, and the average analyst target price is $47.38. I don't believe the price target is out of line, and before the sizable trading loss in London, shares breached $27. $50 is always tough to get over because of the "round number" influence, but above $50 is a relatively easy leg up from here in 2013.

The last reported short interest made up just 1.3% of float, which means short-sellers aren't betting much that this stock will go down.

JPM Payout Ratio TTM Chart
JPM Payout Ratio TTM data by YCharts
PFE Dividend Yield Chart
PFE Dividend Yield data by YCharts

Pfizer PFE

Background: Pfizer Inc., a biopharmaceutical company, engages in the discovery, development, manufacture, and sale of medicines for people and animals worldwide.

52-Week Range: $20.23 to $26.09

Book Value: $11.10

Price-to-Book Ratio: 2.3

Earnings Payout Percentage: 67%

This stock currently has an annualized dividend of 88 cents, yielding 3.4%.

I have been bullish on Pfizer for months, and buying dips continues to work well. Shares have increased more than than 25% in the last year, and more than 3% in the last month alone. Analysts like Pfizer, too. Seventeen of 21 analysts rate Pfizer a buy or strong buy. The company has three holds and one sell. The average analyst current target price for Pfizer is $27.68.

Forget about finding anyone who is short shares of Pfizer. Short interest is only 0.8% of the float.
PFE Payout Ratio TTM Chart
PFE Payout Ratio TTM data by YCharts

At the time of publication, Weinstein held no positions in stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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