Top Three 2009 Dividend Stocks

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Back in December, David Peltier, Portfolio Manager of the Dividend Stock Advisor, recommended two safe dividend stocks and one to avoid for 2009. Click on this video to see if David still likes these stocks and how to buy them.

Peltier said that 2008 was a rough year and many 'safe' companies slashed their dividends. So for 2009, he is looking for companies that have raised their dividend every year and have ample cash to cover it.

First on his list is Diebold(DBD). The company has raised its dividend 55 consecutive years which is unprecedented. It makes ATM and voting machines and can cover its dividend 2.5 times with its annual earnings making this company a safe payout.

Winner or Loser?

Diebold did not disappoint. The company raised its quarterly dividend to 26 cents a share giving it a 4.6% yield. Its fourth quarter results were mixed with EPS in line with estimates but with revenue falling 6%. But nevertheless, Diebold can still cover its dividend 2.1 times with expected 2009 earnings. Some analyst say the company's 2009 revenue guidance shows a lack of visibility and there is a concern over product demand. Shares are down about 20% year-to-date

Next is manufacturing company, Dover(DOV) which has also raised its dividend 53 consecutive years. The company uses 27% of its earnings to cover its dividend so even if earnings were cut in half during this recession it could still cover its payout. Peltier is also a fan of Dover's A-rated balance sheet.