Welcome to the fourth 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'll 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.
Let's take a look at where those same 20 companies stand today.
|
Company |
Sector |
Dividend Yield |
|---|---|---|
| American Capital Agency (Nasdaq: AGNC) | Real Estate | 19.0% |
| Chimera (NYSE: CIM) | Real Estate | 17.1% |
| Hatteras Financial (NYSE: HTS) | Real Estate | 14.5% |
| Annaly Capital (NYSE: NLY) | Real Estate | 14.3% |
| MFA Financial (NYSE: MFA) | Real Estate | 13.8% |
| Portugal Telecom (NYSE: PT) | Telecommunication Services | 12.1% |
| Cheniere Energy Partners LP | Energy | 11.7% |
| Frontier Communications | Telecommunication Services | 10.7% |
| Cellcom Israel | Telecommunication Services | 10.3% |
| Inergy, L.P. | Energy | 10.2% |
| Veolia Environnement | Utilities | 9.7% |
| BP Prudhoe Bay Royalty Trust | Energy | 9.6% |
| YPF S.A. | Energy | 9.0% |
| CenturyLink | Telecommunication Services | 8.4% |
| Pengrowth Energy Corporation | Energy | 8.4% |
| Nokia Corporation | Information Technology | 8.2% |
| Terra Nitrogen Company, L.P. | Materials | 8.2% |
| Southern Copper | Materials | 8.1% |
| Windstream | Telecommunication Services | 7.8% |
| Hospitality Properties Trust | Real Estate | 7.6% |
Sources: Yahoo! Finance and Capital IQ, a division of Standard & Poor's.
With the European sovereign-debt crisis still dominating headlines, we see the effect on Portugal Telecom, whose stock price has dropped a quarter of its value since July. That has led to a tempting 12.1% dividend yield. We see a similar price drop in the 9% yields of Spanish telecom Telefonica (NYSE: TEF) and France Telecom, both possible future members of this report. Each also sport forward P/E ratios under 8.
For those interested in non-financial stocks in Europe, these types of "necessity" providers could prove useful for exploration. My fellow Fool Alex Dumortier gives more color on Telefonica and possible value in Europe.
Meanwhile, back in the states, interest-rate policy is a large macro factor. As the Federal Reserve wraps up its two-day policy meeting today, investors in mortgage REITS (of which the first five companies in the table above are) are tuning in. The item on the agenda these days is "Operation Twist" -- a possible move by the Fed to lower longer-term interest rates and simultaneously raise short-term interest rates. Since the mortgage REITs make their money on the spread between short and long-term interest rates, this is quite pertinent.
This ends our fourth issue of The Big Dividend Report. To keep track of all our analysis on any of these companies, including future issues of The Big Dividend Report, add them to MyWatchlist.
