10 Dividend Yield Stocks With Upside

NEW YORK (TheStreet) -- Meredith (MDP), Telecom Corporation of New Zealand (NZT) and CenturyLink (CTL) are among the ten stocks that are likely to generate attractive returns and have upsides ranging between 12% to 21%, as per analysts polled by Bloomberg.

These 10 high-yielding dividend stocks spread across varied sectors not only have a strong track record of dividend payouts but also have raised their latest quarterly distributions. The companies' strong outlook for 2011 supports robust cash flows.
10. Archer Daniels Midland ( ADM) engages in procuring, transporting, storing, processing, and merchandising of agricultural commodities and products. The company operates in three main segments: Oilseeds Processing, Corn Processing, and Agricultural Services.

The company recently raised its quarterly dividend by 6.7% to 16 cents per share. With its 36th consecutive annual dividend increase, the company has raised its distribution by almost 12.6% every year over the past decade. Archer has a current dividend yield of 1.8%. As compared to S&P 500's P/E ratio of around 23, the company's PE ratio was much lower at 11.7 also lower than the food and beverage industry's average P/E.

Heading into 2011, Archer has finalized contracts for corn sweetener shipments, which will see prices rising by 25%, further boosting margins for corn sweetener operations. Besides its strong market presence in the U.S., the company forecasts robust demand from Mexico, as the country sometimes imports high-fructose corn syrup and ships higher-priced sugar back to the U.S.

Of the 13 analysts covering the stock, 77% recommend a buy, while the remaining suggest a hold. There are no sell ratings on the stock. Data from Bloomberg has analysts forecasting the stock to gain almost 12% from current levels to $41 over the next 12 months.

9. Avon Products ( AVP) is a global manufacturer and marketer of beauty and related products with operations divided into three product segments: Beauty, Fashion, and Home. The company sells its products to consumers through direct-selling channels spread across six regions worldwide.

Avon recently raised its quarterly dividend by 4.5% to 23 cents per share. With its 22nd consecutive annual dividend increase, the company has raised its distribution by almost 9.1% every year over the past decade. Meanwhile, the company's dividend to free cash flow ratio stands at 49%, beating peers like The Estee Lauder ( EL) and L'Oreal 30% and 40%, respectively. Avon currently has a dividend yield of 3.2%.

Avon expects profit margins to rise to 14% from 12% recorded in 2010. The company has a P/E ratio of 16, which is below the consumer non-durables industry average P/E of 20.7 of and S&P 500's P/E of around 23.

Of the 19 analysts covering the stock, 32% recommend a buy, while 47% suggest a hold. On average, analysts polled by Bloomberg expect the stock to gain almost 12.7% from current levels to $31 over the next 12 months.

8. Partner Communications ( PTNR) is an Israel-based mobile network operator with products and services operating under the orange brand. The company's global system for mobile communications (GSM) services covers almost 98% of the Israeli population.

For 2010, the company paid dividends of $344 million overall. Currently, Partner has a dividend yield of 8.8%. The company's board of directors recently approved a cash dividend distribution of 54 cents per share for 2010 fourth quarter leading to a total payment of $85 million. The dividend, payable on March 28, 2011, will be paid to shareholders as of record March 16, 2011.

The company has reaffirmed its existing dividend policy for 2011 and targets a minimum 80% dividend payout ratio of annual net income. Meanwhile, as per the amendment to the Telecommunications Law effective Feb. 1, 2011, restrictions on subscriber exit fines is likely to increase the churn rate of post-paid subscribers.

Of the five analysts covering the stock, 40% recommend a buy, while 40% suggest a hold. On average, analysts polled by Bloomberg expect the stock to gain almost 12.9% from current levels to $20.7 over the next 12 months.

7. J.B. Hunt Transport Services ( JBHT) is a holding company engaged in providing a range of transportation services across the U.S., Canada and Mexico. The company's business is divided into four main segments: Intermodal (JBI), Dedicated contract services (DCS), Full-load dry-van (JBT), and Integrated capacity solutions (ICS).

In its latest quarterly dividend, the company raised its dividend by 8.33% to 13 cents per share. With its eighth consecutive annual dividend increase, the company has raised its distributions by almost 14.9% every year during the past five years. Currently, J.B. Hunt has a dividend yield of 1.3%.

For the period September-December 2010, the company beat analysts' estimates and increased its profit to $57.9 million, or 46 cents per share, as compared to $41.7 million, or 32 cents per share in the year ago quarter.

Of the 28 analysts covering the stock, 71% recommend a buy, while the remaining suggest a hold. There are no sell ratings on the stock. Analysts polled by Bloomberg expect the stock to gain almost 13.5% from current levels to $46.7 over the next 12 months.

6. Hasbro ( HAS) engages in providing children's and family leisure time and entertainment products and services. The company's operations are divided in three segments -- U.S. and Canada, International and Entertainment and Licensing.

The company raised its latest quarterly dividend payment by 20% to 30 cents per share. With its eighth consecutive annual dividend hike, the company has raised its distribution by almost 14.7% every year over the past decade. The company currently has a dividend yield of 2.7%.

Hasbro has a strong line-up for 2011 and 2012, and is focusing on strategic broadcasting media association with Discovery, Universal Pictures, Electronic Arts, and Mediaset. Furthermore, its aggressive entry into emerging markets augurs well for investors. Meanwhile, Goldman Sachs estimates $300 million in incremental transformers revenue at a 30%-35% contribution margin.

Among the 17 analysts covering the stock, 59% recommend a buy, while the remaining rate a hold. There are no sell ratings on the stock. Analysts polled by Bloomberg expect the stock to gain an average 15.2% from current levels to $51.85 over the next 12 months.

5. CenturyLink ( CTL), operating through its subsidiaries, is an integrated communications company offering a range of communication services. The company's subsidiaries operate more than 7 million telephone access lines spread across 33 states.

Having a stable dividend payout history since 1991, the company recently made a dividend payout of 72.5 cents per share. CenturyLink currently has a dividend yield of 7%. CenturyLink's merger with Embarq is enabling significant investments in broadband services and is improving shareholder returns through healthy dividends, analysts say. Furthermore, the merger with Qwest will lead to similar synergies.

Heading into 2011, the company estimates operating revenue to narrow by 4%-5% from 6.5% in 2010. Meanwhile, for 2011 first quarter, revenue is expected to range from $1.68 to $1.70 billion and diluted earnings per share are foreseen between 66 cents and 70 cents.

Of the 20 analysts covering the stock, 55% recommend a buy, while 40% rate a hold. On average, analysts polled by Bloomberg expect the stock to gain 15.3% to $47.2 from current levels over the next 12 months.

4. Nu Skin Enterprises ( NUS) is a global direct-selling company developing and distributing anti-aging personal care products under its Nu Skin brand and nutritional supplements under its Pharmanex brands. The company operates across 50 markets worldwide.

Nu Skin recently raised its quarterly dividend by 8% to 13.50 cents per share. With its 11th consecutive annual dividend increase, the company has increased its dividend distribution by 6.8% every year during the past five years. With strong free cash flow per share of 2.15 times, the company has a strong dividend payout. Currently, Nu Skin has a dividend yield of 1.8%.

For 2011 first quarter, the company expects revenue in the range of $380-$390 million with earnings per share of 50 cents-53 cents. Additionally, increased dividend payout would commence from the first quarter of 2011.

Of the 11 analysts covering the stock, 73% recommend a buy, while the remaining suggest a hold. There are no sell ratings on the stock. On average, analysts polled by Bloomberg expect the stock to gain almost 15.6% from current levels to $36 over the next 12 months.

3. Windstream ( WIN) is a telecommunications service provider offering phone, high-speed Internet and digital television services. The company also offers a range of Internet protocol-based (IP) voice and data services and phone systems and equipment to businesses and government agencies.

The company recently announced a 25 cents per share quarterly dividend, which it has been paying since the end of 2006. The upcoming ex-dividend date is March 29, or payment on April 15. With a current dividend payout ratio of 57%, the company estimates the ratio to range between 52% and 59% for 2011. Windstream currently has a dividend yield of 7.9%.

Looking ahead, the company expects 2011 revenue to range between $4.01 billion and $4.14 billion. For the upcoming year, Windstream plans to focus on completing the integration of Q-Comm and Hosted Solutions and invest capital for its growth strategy.

Of the 20 analysts covering the stock, 40% recommend a buy, while the remaining suggest a hold. There are no sell ratings on the stock. Analysts polled by Bloomberg expect the stock to gain almost 16.7% from current levels to $14.45 over the next 12 months.

2. Meredith ( MDP) is a media and marketing company with two business segments: National and Local media. Magazine publishing, brand licensing, television broadcasting, integrated marketing, interactive media, and video production are some activities Meredith engages in.

The company raised its latest quarterly dividend by 11% to 25.5 cents per share, or $1.02, on annual basis. Meredith intends to initiate a share repurchase program with 1.1 million shares currently authorized for the same. The company currently has a dividend yield of 2.66%. Announcing its 17th consecutive annual dividend increase, Meredith has improved its dividend payout by 11% every year over the past decade.

Heading into 2011, the company forecasts earnings between $2.6 and $2.8 per share. For the third quarter, earnings per share are expected to range from 60 cents to 65 cents. The company's P/E ratio and the media industry's average stand at 12.4, which is much lower than the P/E ratio of S&P 500's 23, providing further room for gains.

Of the 7 analysts covering the stock, 57% recommend a buy, while the remaining rate a hold. There are no sell ratings on the stock. Analysts polled by Bloomberg expect the stock to gain an average 20% to $42 in value from current levels.

1. Telecom Corporation of New Zealand ( NZT) is a telecommunications service provider offering a range of telecom products and value-added services in New Zealand and Australia.

The company will pay a dividend of 13.3 cents per ADR share on Mar. 18, with an ex-dividend date of Feb. 22. Similarly, it has also decided to pay a supplementary dividend of 2.3 cents per share. The company has been paying quarterly dividends since 2002. Currently, the telecom company has a dividend yield of 6.6%.

NZT has reaffirmed its EBITDA guidance for 2011, 2012 and 2013. For 2011, the range is pegged between $1.28 and $1.33 billion, while adjusted net earnings for the year are estimated to range between $246 and $275 million. The company's P/E ratio stands at 3.4, which is much lower than the telecom industry's average P/E ratio of 20.4 and S&P 500's P/E of around 23, affording further room for gains.

Analysts covering the stock (two) recommend a buy. Data from Bloomberg has analysts forecasting an average 21% gain from current levels to $9.55 over the next 12 months.

>To see these stocks in action, visit the 10 Dividend Stocks With Upside portfolio on Stockpickr.

More from Opinion

Micron Falls on Soft Guidance: 5 Key Takeaways

Micron Falls on Soft Guidance: 5 Key Takeaways

Tuesday Turnaround: Fed Up With the Fed Yet?

Tuesday Turnaround: Fed Up With the Fed Yet?

10 Tech Stocks That Have Gotten a Lot Cheaper Over the Last 3 Months

10 Tech Stocks That Have Gotten a Lot Cheaper Over the Last 3 Months

Oracle Gains on Better-Than-Feared Results and Guidance: 5 Key Takeaways

Oracle Gains on Better-Than-Feared Results and Guidance: 5 Key Takeaways

Monday Madness: Johnson & Johnson Is Still Making Headlines

Monday Madness: Johnson & Johnson Is Still Making Headlines