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1 Great Dividend You Can Buy Right Now

Sean Williams
August 3, 2012

Dividend stocks are everywhere, but many just downright stink. In some cases, the business model is in serious jeopardy, or the dividend itself isn't sustainable. In others, the dividend is so low it's not even worth the paper your dividend check is printed on. A solid dividend strikes the right balance of growth, value, and sustainability.

Today, and one day each week for the rest of the year, we're going to look at one dividend-paying company that you can put in your portfolio for the long term without too much concern. This isn't to say these stocks don't share the same macro risks that other companies have, but they are a step above your common grade of dividend stock. See last week's selection.

After actually taking a week and some change off for vacation (yes, even I get vacation), this week I want to focus on why ATM and security product maker and servicer Diebold (NYSE: DBD  ) should be a go-to name for income seekers.

Pop quiz, hot shot...
What publicly traded company has the longest streak of consecutive annual dividend increases? Think you know the answer?

If you said Johnson & Johnson (NYSE: JNJ  ) you are absolutely incorrect. Johnson & Johnson has raised its dividend in each of the past 50 years, which is an amazing feat. However, considering that the products it supplies are in the ever-growing health-care field, increasing levels of cash flow, and thus higher quarterly payouts, should be expected with the kind of stability J&J shareholders are privy to.

For those of you that chose 3M (NYSE: MMM  ) , give yourself a pat on the back, because you're slightly less wrong than those of you who chose J&J. 3M recently bumped its dividend higher for the 54th straight year. Again, somewhat expected for a conglomerate that supplies everything from consumer goods to display and graphic solutions.

To end this game sooner rather than later, the correct answer is Diebold, with 59 years of consecutive annual payout increases!

Diebold, your own personal ATM
I can only imagine at least half of you out there are scratching your heads and thinking, "Who is Diebold?" Diebold is the company behind many of the ATMs you use, in addition to designing and installing the pneumatic tubes you use at drive-thru banking windows, security products ranging from safes and vaults, digital surveillance systems, and various project management services.

The reason Diebold looks so attractive now, as if 59 consecutive annual dividend increases isn't enough to pique your interest, is that it recently fell after slightly dropping the high end of its previous earnings forecast. Earlier this week, Diebold reported that its profits jumped 27% as revenue from its Latin America/Brazil region rocketed higher by 30%. However, a delay in orders for voting machines from Brazil until 2013 caused the company to slightly reduce its sales and earnings forecast. In response, investors clubbed the stock.

As for me, I see this as an excellent buying opportunity. Let's take a quick glance at how Diebold stacks up next to its peers.



Price/Cash Flow

Forward P/E

Dividend Yield

Diebold 2.3 7.4 10.0 3.5%
Tyco International (NYSE: TYC  ) 1.8 10.0 13.3 1.8%
NCR (NYSE: NCR  ) 4.2 12.5 10.1 0%

Source: Morningstar.

Really, all three companies have something to offer, but neither Tyco nor NCR have the entire package that Diebold can bring to the table.

Looking at Tyco, the company's growth is its Achilles' heel. Shareholders are thrilled that the company is growing 3%-5% organically, but until the company is broken into its individual components