This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Three Dividend Stocks to Consider

For the third straight year, the broader U.S. stock market averages jumped out of the gate with sizable gains in January. In fact, the S&P 500's 5.04% increase in January 2013 was its best monthly start since 1997.

That said, I believe there are places where investors can still selectively put new cash to work. This is especially true for companies that consistently increase their dividends. I believe the market always pays a premium for growth and the dividend yield offers a cushion if we see a near-term pullback from recent highs.

I have identified three consumer stocks with a long track record of boosting their dividends each year during that month of February that I believe are attractive to purchase ahead of the next likely increase. Adding in the benefit of the dividend, I believe these stocks have the potential to generate double-digit investment returns in 2013, with relatively lower risk the broader market averages.

First up is Coca-Cola (KO - Get Report), which is currently trading around $37.41. The company has raised its annual dividend 50 consecutive years and I believe that management will extend the streak to 51 years around the same time it announces quarterly results on Feb. 12.

Coca-Cola currently pays a quarterly dividend of $0.255 a share, which equates to a yield of 2.7%. The company has a solid balance sheet and can comfortably cover the payout 2.1x with expected 2013 earnings of $2.17 a share. Management has delivered 9% average annual earnings growth over the past three years and the consensus analyst estimates call for that pace of profit expansion to continue for the next three years.

Up next is Colgate-Palmolive (CL - Get Report), which is currently trading around $109.00. The stock recently set an all-time high, after management delivered solid quarterly results on Jan. 31. The company also has a long track record of consistently boosting its dividend each February and I believe another increase is in the cards in the coming weeks.

Colgate-Palmolive currently pays a quarterly dividend of $0.62 a share, which works out to a yield of 2.3%. This is higher than the average yield of the S&P 500 and the benchmark 10-year Treasury note and can also be covered 2.4x with expected 2013 earnings of $5.90 a share.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
CL $70.92 0.00%
KMB $125.19 0.00%
KO $44.80 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs