10 Dividend Stocks That Will Let You Retire (Update2)

10. H.J. Heinz (HNZ)

Company profile: H.J. Heinz, with a $17 billion market value, is an international maker of packaged foods, including ketchup, condiments, sauces, frozen food, soups, beans, pasta meals, and infant nutrition items. International sales account for 60% of its revenue.

Heinz reported last Friday that in its fiscal third quarter just ended, sales grew 7% to $2.92 billion and earnings to 88 cents per share, up from 84 cents per share a year ago. The company also said it expects fiscal 2012 earnings of $3.32 to $3.34 per share from continuing operations, excluding special items.

Investor takeaway: Its shares are down 0.8% this year, but have a three-year annualized return of 21%. Over 10 years, its annual average return is 6%. The stock has a dividend yield of 3.58%.

S&P has it rated "strong buy" with a $60 price target, a 12% premium to the current price. Analysts give its shares seven "buy" ratings, three "buy/holds," nine "holds," one "weak hold," and one "sell," according to an S&P survey.

9. Progress Energy (PGN)

Company profile: Progress Energy, with a market valuation of almost $16 billion, is one of the largest regulated utilities in the U.S. and in the midst of trying to get even bigger in a merger with another firm on this list Duke Energy (DUK). S&P said it expects the merger will be approved and conclude early this year. Duke and Progress filed a new merger plan Wednesday, their third attempt to get state and federal approval for the $26 billion deal, according to a report in the (Charlotte (N.C.) Observer.If approved, they now hope to close on it by mid-year.

Investor takeaway: Its shares are down 5% this year, but have a three-year average annual return of 18% and a 10-year return of 5.7%. The stock has a 4.71% dividend yield.

Analysts give its shares 17 "hold," ratings and one "weak hold" primarily due to the pending merger. But Morningstar says the company's aim is to take advantage of growth opportunities at its regulated utilities during the next decade and so "merger or no merger, we think this strategy should produce more consistent returns and turn Progress into a classic income stock."

8. Xcel Energy (XEL)

Company profile: Xcel Energy, with a $13 billion market value, has utility operations in eight states, stretching from northern Minnesota to Texas, and it serves 3.4 million electric customers and 2 million natural gas customers. It bought two natural gas power plants in 2010, which should help operating margins given the cheap price of that gas.

Investor takeaway: Its shares are down 4% this year, but are up 18% annually on average over the past three years. Over 10 years, it's 4.4%. The stock has a 3.93% dividend yield. Analysts give its shares five "buy" ratings, two "buy/holds," 10 "holds," and one "weak hold." It's expected to earn $1.78 per share this year and that will grow by 6% in 2013.

7. Kraft Foods (KFT)

Company profile: Kraft, with a market value of $67 billion, is the second-largest packaged food company in the world and the biggest in North America. However, the company's management has plans to break it up into a global snacks business and North American grocery brands. Its products include snacks, beverages, cheese, and convenience meats, and its brands include Nabisco, Oscar Mayer, Maxwell House, Jell-O, Chips Ahoy and Kool-Aid.

Investor takeaway: Its shares are up 3.3% this year and have a 21% annual rate of return over the past three years. Over 10 years, it's 2.4%. The stock has a dividend yield of 3.01%. Analysts give its shares 10 "buy" ratings, four "buy/holds," and six "holds," according to an S&P survey.

6. Duke Energy (DUK)

Company profile: Duke, with a $28 billion market value, and already one of the nation's largest multistate holding companies of regulated electric and gas utilities, with operations in the Carolinas, Indiana, Ohio, and Kentucky, is awaiting federal regulatory approval to merge with Progress Energy, as mentioned above. Duke and Progress filed a new merger plan Wednesday, their third attempt to get state and federal approval for the $26 billion deal.

Investor takeaway: Its shares are down 4% this year, but up an average 20% annually over the past three years and, over 10 years, the average annual return is 4%. Its shares carry a 4.79% dividend yield. S&P says it views the merger as "moderately positive," and that it will cause the earnings per share growth rate to rise to 5% annually. Analysts give its shares one "buy/hold" rating, 17 "holds," and one "weak hold."

Those same analysts expect to earn $1.43 per share this year, a 1% increase. Its management recently reaffirmed its 4% to 6% long-term target earnings per share growth rate.

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