The 20 Biggest, Baddest Dividends in the Market

Welcome to the third issue of The Big Dividend Report!

For new readers, in this series my aim is to check under the hood of the biggest dividends in the market and to keep you updated on the latest and greatest. We will limit ourselves to the biggest 20 dividends coming from companies with at least $2 billion in market cap.

In our first go-around, we looked at the payout ratio, the most fundamental metric to check for dividend health. In our second report, we looked at recent price movements in this volatile market.

Today, we'll look at recent news that affects some of those same 20 companies.

Company

Sector

Dividend Yield

American Capital Agency (Nasdaq: AGNC  )

Real Estate

19.6%                          

Chimera (NYSE: CIM  )

Real Estate

17.2%                          

Hatteras Financial (NYSE: HTS  )

Real Estate

14.5%                         

Annaly Capital (NYSE: NLY  )

Real Estate

14.3%                          

MFA Financial (NYSE: MFA  )

Real Estate

13.4%                        

Cheniere Energy Partners LP

Energy

10.9%                          

Portugal Telecom

Telecommunication Services

10.9%                          

Frontier Communications (NYSE: FTR  )

Telecommunication Services

10.0%                          

Inergy LP

Energy

9.9%                          

Cellcom Israel

Telecommunication Services

9.7%                          

BP Prudhoe Bay Royalty Trust

Energy

9.5%                           

Veolia Environnement

Utilities

8.8%                         

YPF

Energy

8.7%                           

Terra Nitrogen LP

Materials

8.2%                           

CenturyLink

Telecommunication Services

8.0%                           

Windstream

Telecommunication Services

7.9%                           

Hospitality Properties Trust (NYSE: HPT  )

Real Estate

7.7%                           

Nokia

Information Techypfology

7.5%                           

Pengrowth Energy

Energy

7.4%                           

Southern Copper

Materials

7.3%                           

Sources: Yahoo! Finance, and Capital IQ, a division of Standard & Poor's.

The most interesting (read: potentially alarming) news regards the mortgage REITS here (the first five names on this list are mortgage REITs that make money investing in mortgage-backed securities; Hospitality Properties Trust is a REIT, but not a mortgage REIT ... in other words it owns actual properties, not securities).

Per a blog post by Ben Levisohn of The Wall Street Journal:

On Aug. 31, the U.S. regulator sought comment on whether mortgage REITs should lose their tax exemption or their ability to use leverage. The plan seems to be to force them to choose one of two options: become a regular corporation—and get taxed like one—but keep the leverage or lose the leverage and keep the tax exemption.

Here's the SEC release.

Investment bank Sterne Agee has already come out saying that SEC actions are unlikely to materially damage mortgage REITs. Its basis is that whole pools of mortgage-backed securities are exempt and that the SEC will merely change some of the practices of mortgage REITs.

We shall see. Any curbing of leverage or tax exemption is very bad news for the sector, so I plan to monitor this situation as more news and details come out.

Outside of the mortgage REIT industry, I'd like to highlight an excellent article written by one of my fellow Fools. Eric Bleeker looks into the sustainability of Frontier Communications' dividend. He provides some interesting thoughts on how Frontier is doing vis a vis its large Verizon asset acquisition. Complete with a 14-slice pie chart!

This ends our third issue of The Big Dividend Report. To keep track of all our analysis on any of these companies, including future issues of The Big Dividend Report, click here to add them to My Watchlist. Or for some more dividend ideas, check out our free report: "13 High-Yielding Stocks to Buy Today."

Anand Chokkavelu owns shares of Frontier Communications. The Motley Fool owns shares of Veolia Environnement, Annaly Capital Management, and Chimera Investment. Motley Fool newsletter services have recommended buying shares of Cellcom Israel. 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.


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  • Report this Comment On September 03, 2011, at 1:16 PM, July324yes wrote:

    Can the Motly Fool tell me where to find what CIM

    Chimera Investments is really invested in? Their ticker symbol of CIM is also the initials of a Canadian mining service and leaves one with the impression that Chimera is heavily invested in the Canadian mining industry. Help !!

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