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Three Dividend-Paying Stocks to Buy on the Dip

DD Dividend Yield Chart DD Dividend Yield data by YCharts

E. I. du Pont de Nemours (DD - Get Report)

Background: DuPont is involved in science and technology in a range of disciplines including high-performance materials, specialty chemicals, pharmaceuticals and biotechnology.

Price To Book: 4.1

Earnings Payout Percentage: 35%

Over the last couple of months, DuPont had a brilliant run. Shares moved from under $50 to over $57. The stock has moved lower since, setting up a marvelous support level that can be bought.

Investors are receiving $1.80 in dividends for a yield of 3.4%. Unlike GE and Wells Fargo, DuPont didn't lower the dividend amount in 2009, although the rate remained the same from 2007 until 2012. It didn't take long before the rate was increased again, in May 2013 the payout rose to 45 cents a share.

Short interest is near the higher end of my comfort level for a dividend-paying stock. At 2.8% of the float, investors should keep a close eye on the short interest level. If it moves much beyond 4%, the market may be signaling it's time to exit or hedge your position with long dated options.

DD Payout Ratio TTM Chart DD Payout Ratio TTM data by YCharts

At the time of publication the author had no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Robert Weinstein currently blogs, mentors traders, and writes several weekly columns in Rocco Pendola's Option Investing newsletter from his home in northern Wisconsin. Robert tends to focus on the psychological importance of goals, risk mitigation, emotion, and relatively short term market exposure. With nearly 30 years of studying and investing experience, Robert has experienced the many ups and downs in the financial markets and uses the knowledge gained to maintain balance. Robert believes the best way to make money investing is to avoid losing it. The best way to avoid losing is to know what emotional traps lay in the path of investors and learning how to avoid them. Robert is a voracious reader of financial related books often completing more than one book a week while not trading or writing. Robert contributes to his blog at paid2trade.com on a regular basis with an emphasis on studying behavior finance.


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