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TheStreet Open House

3 Big Dividend Payers With Rising Share Prices

NEW YORK (TheStreet) -- Finding top dividend stocks trending higher in price is the standard you should set for investing. This is especially true when the Federal Reserve is buying $85 billion in paper a month and effectively removing savings accounts from viable investing options.

While you may think it's not easy to find high-yielding stocks also soaring in price, I have a list of three for you.

I have a few rules that any given company's stock must pass before I allow it on the list. To make the cut of separating the zeros from the heroes, they must meet, at a minimum, the following criteria:

  • A stock must be highly liquid and trade with a small bid-ask spread to avoid slippage.
  • The company must have a history of dividend payments and increases in payments.
  • The company needs to demonstrate the ability to continue paying the current dividend or more.
  • The stock chart must be in a bullish uptrend; there is no point in looking for an oversized yield if the shares are expected to drop as much or more in the next year.

How can you take advantage of the following list of dividend stocks? Make sure the industry and the company matches your investment objectives. Use your current professional knowledge as applicable to garner a market edge when entering or exiting a position.

Remember, your greatest edge is your ability to limit investments to industries you already understand.

MSFT Dividend Yield (TTM) ChartMSFT Dividend Yield (TTM) data by YCharts

Microsoft (MSFT)

Price To Book: 3.5

Earnings Payout Percentage: 34%

Background:Microsoft develops, licenses and supports a range of software products and services for various computing devices worldwide. The company also provides cloud computer services and is growing their wireless phone services after buying Nokia's (NOK) phone division. Microsoft trades an average of 53 million shares per day with a market cap of $271 billion.

Ok, for many Microsoft reminds people of a stock their grandparents would buy, but who doesn't like a chart moving from the bottom left to the upper right? Another tech stock I like and wrote extensively about is Yahoo! (YHOO).

Between Yahoo! and Microsoft, it's close to a toss-up with a slight edge to Yahoo!. But Yahoo! doesn't pay a dividend, so it's not on the list. While Yahoo! has an enormous stake in Alibaba and a fantastic CEO from Wisconsin, Microsoft has a much better history of executing well.

Apple (AAPL) competes with Microsoft in the tablet, phone and OS space and is one of my favorite stocks. On Wednesday, I wrote Carl Icahn Is Smarter Than You describing why Apple remains a strong investment even after bouncing over $90 off its lows.

Apple can easily make this list, but since I already give it full coverage I'll just mention it here in the context of Microsoft.

Another often overlooked competitor is Oracle (ORCL). Oracle's database software competes with Microsoft's SQL and pays a dividend, but not enough to make my list.

Steve Ballmer may not be the most popular CEO. However, not only has Microsoft grown under his leadership, but Microsoft didn't disappoint or reduce when other companies were busy cutting or eliminating their dividends in 2009 and 2010.

This stock currently has an annualized dividend of $1.12, yielding 3.5%. The latest dividend increase announcement solidifies my confidence in Microsoft that much more.

After retracing a spike higher from the dividend announcement, Microsoft has a strong base of support in the $31.50 area and appears ready to trek up for another test of the $36 resistance level.

MSFT Payout Ratio TTM ChartMSFT Payout Ratio TTM data by YCharts

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