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12 Dividend Stocks for 2012

http://www.fool.com/investing/dividends-income/2012/01/05/12-dividend-stocks-for-2012.aspx

Matt Koppenheffer
January 5, 2012

Here's a novel idea: As we dive headlong into the new year, why not invest in companies that actually give you their profits?

With decades upon decades of research and scholarly thought sunk into the theory around stocks and the stock market, it can be easy to get lost in layers of abstraction. What's the stock's price-to-earnings ratio? What does a discounted cash flow model say it's worth? Is the stock in a confirmed uptrend that's taking it over the 30-day moving average?

Go ahead and shake your head like an Etch A Sketch to clear that all out. At the end of the day, a stock is an ownership stake in a business. What is that ownership stake really worth to you if the company withholds all of its profits?

What follows are 12 companies that do share their profits and are all on my watchlist for the year ahead.

Flowers Foods (NYSE: FLO  ) . If you've ever found yourself chowing down on Nature's Own, Whitewheat, Country Hearth, Sunbeam, Roman Meal, or Aunt Hattie's bakery products, there's a good chance you've ingested a Flowers Foods product. Cost pressures have been a challenge of late for the food industry, but this is a company that's performed well over time, maintained a reasonable balance sheet, and grown its dividend.

Aflac (NYSE: AFL  ) . We all know the Aflac duck from the iconic TV ads, but there's also a lot that's ducky about Aflac for investors. As I outlined last fall, this is a well-run company with a solid business and, right now at least, an attractive valuation.

Clorox (NYSE: CLX  ) . Around this time last year I called out Clorox as one of the consumer staples to buy in 2011. For all of 2011, the stock's total return was 8.8% -- not bad at all when you consider that the S&P 500 was flat. I'm going back to the well this year and recommending the stock again, except perhaps this time around I should take my own advice and add it to my personal portfolio.

Owens & Minor (NYSE: OMI  ) . I dig companies that you might not think of on a day-to-day basis, but provide very essential services. Owens & Minor fits that bill in a big way. As a distribution and logistics provider for a wide swath of medical gear for hospitals and other health-care providers, the company is a very key piece of the health-care puzzle. The stock yields 2.9% today, but the company's grown its payout around 14% per year over the past five years.

Avon Products (NYSE: AVP  ) . OK, I'll admit the Avon brand seems a bit dated these days. However, the bulk of the company's business -- and profits -- today is outside of the U.S. and in particular in Latin America and Central and Eastern Europe. The debt load may scare some investors off, but the company's profits are more than enough to handle it. In addition to the geographic exposure, I am also a big fan of the 5.3% dividend yield, the low valuation multiples, and a trailing return on capital of nearly 17%.

Exelon (NYSE: EXC  ) . I've hemmed and hawed about Exelon and I've noted in the past that I wasn't crazy about its merger with Constellation Energy. However, when it comes to solid dividends, you can't do too much better than utilities, and so I may end up following fellow Fool Jim Royal's lead and finally taking the bait on this nuclear generation giant.

Hasbro (NYSE: HAS  ) . As a current owner of chief Hasbro rival Mattel, I'm a big believer in the great brands in the toy industry. And, boy, does Hasbro have brands. Playskool, Transformers, G.I. Joe, Milton Bradley, and Nerf are just a few of the many iconic brands in the company's portfolio. So why don't I own this stock yet? That's a very good question.

Molex (Nasdaq: MOLX  ) . Selling electronics connectors is Molex's business, which may alone be enough to put you to sleep. But when you consider that these essential little bits of technology represent a $45 billion industry and show up in everything from mobile phones to tablet computers and automobile safety electronics, you can understand why Molex is a business worth owning. There is no net debt on Molex's balance sheet and the stock yields a cool 3.4%.

National Presto (NYSE: NPK  ) . The first question with National Presto might be how a stock with a 1.1% dividend yield makes it into a list of buy-worthy dividend stocks. But consider this -- for going on five years now, the company has added a hefty special dividend on top of its regul