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Here are 2 Dividend Stocks to Buy, One to Sell

Structure depends on strategy; strategy is determined according to events - Sun Tzu

NEW YORK (TheStreet) -- Long-time readers of my articles know I believe every buy-and-hold portfolio needs dividend stocks. The right dividend stocks for growth and to mitigate the ups and downs caused by daily headlines. The surest path I know to wealth creation is buying above-average yield companies that are likely to increase their dividends year after year.

Be careful, though -- simply buying the highest-paying stocks can cause your portfolio to step in what's known as a dividend trap. That's a stock that appears attractive at first but you quickly find out why when the company's management decides to reduce or eliminate its dividend payments.

I present my latest dividend stars that should appreciate and pay you while you wait within minimal concern that the dividend flow will dry up.

BGFV Dividend Yield (TTM) Chart

Big 5 Sporting Goods (BGFV - Get Report) operates as a sporting goods retailer in the western United States. Big 5 Sporting Goods Corporation was founded in 1955 and is headquartered in El Segundo, California. It has a market cap of $264 million and trades an average of 240,000 shares a day.

Price To Book: 1.4

Payout Percentage: 40%

Dividend Amount: 10 cents

This company is the beneficiary (or current victim depending on your point of view) of last year's gun control scare. The shares took a considerable hit after reporting earnings on April 30th, and I think are poised to recover. In fact, Big 5 is now a small 9 future earnings multiple. Moreover, the dividend yield tops 3.3%. For my exact entry and profit target's, I wrote a Real Money Pro post that you can use as a guide.

Fears of nationwide gun control regulation resulted in a significant spike in firearm and related sales. Since the changing of the tide, the year-ago quarterly comparable sales may at first glance give the inattentive an impression that the company is on hard times.

That's a problem with one-off sales spikes. Once revenue normalizes, new investors are hard to find because either stock scanners filter them out or potential shareholders shy away because of declining year-over-year expectations. Investors willing to dig deeper will quickly realize this company is a long-term buy that will pay you to leave it in your portfolio.

CAB Revenue (Quarterly) Chart

Large inventory levels at Big 5, Cabela's (CAB - Get Report), and Dick's Sporting Goods (DKS) are and will continue to create headwinds through this quarter, but should be worked through by this fall. This sets up the key holiday shopping season as one that will once again enjoy pricing power and exceed the previous year's period.

In the meantime, enjoy the dividend while you wait.

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