This article is part of our Rising Star portfolio series.
As I explained in a recent article, I look for dividends as a way to play stocks. Ideally, I'm looking for the dividend as a catalyst to fuel stock price growth. So with that, here are three dividend stocks I'm following and that you can follow, too, using our free watchlist service.
1. Frontier Communications
I've highlighted Frontier as a watchlist stock before because of its undervaluation and its massive yield, which is currently 8.5%. The company is still in the process of reinvesting in operations that it acquired from Verizon
- Add Frontier to your watchlist.
This U.K. telecom giant pays a 5.1% yield and offers a play on consolidation in the industry. The company's 45% stake in Verizon Wireless could start to pay big dividends soon, leading Vodafone to fatten its own payout. Verizon owns the other 55% of Verizon Wireless. The speculation is that Verizon will need cash to fund its own infrastructure build-out and dividend, and cash from its joint venture would allow it to continue on firmer footing. Other analysts see a takeover of some sort: Verizon of Vodafone or vice versa, or either partner snapping up the joint venture. But with AT&T
- Add Vodafone to your watchlist.
3. Fortune Brands
The company behind Jim Beam and Maker's Mark just sold off its golf division, Acushnet, to Fila and a group of investors for $1.2 billion. With the divestiture, Fortune has just two divisions remaining: its spirits business and its home and security unit. While the company pays a dividend of 1.2%, that's pocket money while waiting for the company to spin off its home and security division later this year. A variety of strategic investors, including Diageo
- Add Fortune Brands to your watchlist.
So add the three dividend stocks above to your watchlist and keep tabs on them in the coming weeks. Interested in any of these stocks or have another to share? Join me on my discussion board and follow me on Twitter (@TMFRoyal).