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NEW YORK ( TheStreet) -- One of my favorite strategies to park money overnight is through dividend capturing. When timed and executed properly, dividend capturing is a relatively low-risk method of enhancing yields through hedging techniques.
I haven't captured many lately because of market correction fears. There is a saying on Wall Street that you "shouldn't pick up nickels in front of a steam roller," and I believe it's true.
In my options newsletter, I warned for weeks that dividend capturing wasn't worth the risk because option premium was relatively small (for an overall market gauge, you can look at the
iPath S&P 500 VIX Short-Term (VXX) to measure fear).
Two companies that don't care what direction the market is headed are
U.S. Bancorp (USB - Get Report) and
WellPoint (WLP). Both companies are in the financial space, near 52-week highs and should have your attention.
U.S. Bancorp is a financial services holding company and provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses and institutions. If you
follow me on twitter, or read my bullish U.S. Bancorp articles including
"Rising Dividend Stocks That Don't Care About the Fiscal Cliff" you know I've been bullish on U.S. Bancorp before 2013.
USB data by
My optimism continues. The fundamentals are solid and the chart is a trend follower's dream. Even after the share price gains this year, the forward P/E ratio is only 10.9. I view short-sellers as the smart money on Wall Street.
Only 1% of the float is short, about as small of a short ratio as you will find and a clear indication that few professionals are betting the shares are overvalued. U.S. Bancorp lets you have your cake and eat it, too. The dividend yield is 2.6% and with a small payout ratio. Investors can expect future dividend increases based on historical adjustments.
From a technical perspective, the widely followed 200-day moving average is trending higher at a moderate and sustainable pace. Money continues to flow into the stock, elevating the shorter time period moving averages above the 200-day average.
Technically, this stock should be accumulated on dips until the trend is broken. Bullish trends often will make their biggest move at the end; leaving the impression US Bancorp has plenty of upside potential.