Welcome to the eighth 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 dividend yields coming from companies with at least $2 billion in market cap.
In our first go-round, 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. In our third report, we looked at recent news for the mortgage REIT industry. Our fourth report highlighted possible opportunities in foreign telecom. The fifth report focused on master limited partnerships and Nokia (NYSE: NOK ) news. For the sixth report, we had some telecom and mREIT updates. And for the seventh report, we previewed earnings season.
The wait is over. It's officially earnings season now, so we'll be getting a lot of useful information in the coming weeks. Last week, Nokia reported earnings, so we'll take a look at that shortly. But first, let's take a look at where our cohort of 20 companies stand today. Usually I rank the group in order of highest yield (after all, that's what this report is all about), but for earnings season let's look at the list chronologically, based on estimated earnings-release dates.
Earnings Date (Est.)
|Annaly Capital (NYSE: NLY )||Real Estate||15%||10/24-10/26|
|American Capital Agency (Nasdaq: AGNC )||Real Estate||20.2%||10/25|
|Chimera (NYSE: CIM )||Real Estate||18%||10/25|
|Hatteras Financial (NYSE: HTS )||Real Estate||15.9%||10/26|
|MFA Financial (NYSE: MFA )||Real Estate||15.5%||10/31-11/5|
|Cheniere Energy Partners (AMEX: CQP )||Energy||11.2%||10/31-11/10|
|Terra Nitrogen Company||Materials||9.5%||11/1-11/3|
|Portugal Telecom||Telecommunication Services||13%||11/3|
|Frontier Communications||Telecommunication Services||12.2%||11/3|
|Pengrowth Energy Corporation||Energy||8.1%||11/4|
|Cellcom Israel||Telecommunication Services||9.9%||11/8|
|Hospitality Properties Trust||Real Estate||7.6%||11/9|
|BP Prudhoe Bay Royalty Trust||Energy||7.2%||11/16-11/26|
|YPF||Energy||9.3%||No good estimate*|
Sources: Yahoo! Finance, S&P Capital IQ, and Earnings.com.
*YPF's last earnings data was given in a Form 6-K in August.
Last week, Nokia was the first of these big yielders to report earnings. There were some good points here. Nokia beat analyst estimates. Its feature phone (as opposed to smartphone) shipments increased by 8% over last year's quarter, to a whopping 89.8 million units. And although its smartphone shipments were down, this could be expected after it announced in February that it's ditching its Symbian operating system for Microsoft's Windows (due out this quarter). It still ranks third with 16.8 million units sold last quarter, close behind No. 2 Apple (17.1 million) and No. 1 Samsung (over 20 million).
With Nokia's 7.3% dividend yield, investors may be tempted here. But be careful. Let's not forget that Nokia posted a loss this quarter. And every big win by Apple's iPhone and Google's Android is pretty much a loss for Nokia, whose domination of the feature-phone market may be an obsolete skill set. A lot rides on its partnership with Microsoft.
For those looking for a value play, past earnings and free cash flows over the past five years make Nokia seem cheap if you believe it can fight on and keep paying hefty dividends. I think better values are out there (note that I'm long Apple).
Moving on to the next reporters, we should start to see earnings reports in the mortgage REIT space trickling in this week. Annaly, American Capital Agency, Chimera, and Hatteras are all on deck. Our last mortgage REIT, MFA Financial, is estimated to report next week. That week will have a lot of news as half of our companies could report, with Cheniere Energy Partners as the earliest possible reporter. Get a preview of the expected earnings season for mortgage REITs,
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