3 Top Dividend Stocks for 2014

AbbVie, Chevron, and Textainer Group Holdings: One Fool's take on three top dividend stocks for 2014.

Jan 24, 2014 at 7:03PM

If you're looking for the top dividend stocks for 2014, you aren't alone. In the wake of persistently low interest rates, income investors have flocked to dividend stocks. Here are three that may just prove to be the top dividend stocks for 2014.

AbbVie (NYSE:ABBV) was spun off from Abbott Laboratories (NYSE:ABT) at the beginning of 2013. The biopharmaceutical company boasts not only an impressive drug portfolio including blockbuster anti-inflammatory drug Humira, but also a great deal of opportunities in the hepatitis C market. Even though Humira will come off patent in 2016, AbbVie is focused on future growth opportunities. The company is investing in proprietary technologies, allowing it to get a leg up on targeted cancer treatments.

AbbVie's dividend yields 3.2%. The payout ratio for the dividend is a mere 17%. That means just 17% of AbbVie's earnings go to paying its dividend, which leaves ample room for further growth. The company's forward P/E ratio of 15 also appears attractive. Our Motley Fool CAPS community has crowned AbbVie a 5-star (out of 5) stock. Keep your eye on AbbVie -- it's likely to be one of the top dividend stocks for 2014.

Chevron (NYSE:CVX) achieved record profit in late 2012, but since then it has slumped due to lower margins from its refineries. Chevron plans to boost its oil and gas production by more than 20% by 2017 from 2010 levels, mainly by developing deepwater oil fields, boosting shale production, and increasing its number of liquefied-natural-gas (LNG) plants. LNG projects in the Gulf of Mexico and Australia will likely power the company's future growth.

Chevron's dividend yields 3.4%. The payout ratio for the dividend is 31%, leaving plenty of room for growth and some wiggle room in case margins continue to suffer for a while. Chevron has increased its dividend by more than 50% over the past five years. The California-based oil giant's forward P/E ratio of 10 is especially enticing. Chevron definitely looks like one of the top dividend stocks for 2014.

Textainer Group Holdings (NYSE:TGH) owns, manages, and leases a fleet of marine cargo containers. In fact, it's one of the world's largest intermodal container leasing companies. Some of Textainer's competitive advantages include massive economies of scale, high fleet utilization, and a stable customer base. And we haven't even started talking about its incredible dividend.

Textainer Groups Holdings' dividend yields 5.1%, which the company has more than doubled over the past five years. The payout ratio for the dividend is 52%, which still leaves some room for further growth. The company's forward P/E ratio of 10 appears extremely attractive. Without a doubt, Textainer Holdings looks like one of 2014's top dividend stocks.

Looking for more great dividend stocks? Check out a recent article by longtime Fool contributor Selena Maranjian, who called out her top dividend stocks for 2014.

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Fool contributor Nicole Seghetti has no position in any stocks mentioned. Follow her on Twitter @NicoleSeghetti. The Motley Fool recommends Chevron and Textainer Group. 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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