4 Dividend Stocks You've Never Heard of

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

By Todd Shriber

NEW YORK ( StreetAuthority) -- One mistake novice income investors make is assuming that the best dividend stocks are the ones they're most familiar with, or the ones most talked about on CNBC or in the mainstream financial press.

Sure, well-known dividend stocks such as Dow components Coca-Cola ( KO), Exxon Mobil ( XOM) and Procter & Gamble ( PG) have proven their mettle as dependable dividend payers. Each has a multidecade streak of raising dividends and rewarding shareholders. P&G, for example, touts an uninterrupted string of dividends dating back to the 19th century and a streak of dividend increases for more than 50 years.

That's all good, but if the financial crisis taught investors anything, it's that not all dividends are completely safe. Stinging dividend cuts during the crisis from the likes of General Electric ( GE) and the major banks proved as much. Those companies had one thing in common: They were perceived to be strong dividend stocks by the investing public, in part because they were ''known'' entities.

Remember, income investing isn't a popularity contest. In fact, there are dependable dividends for the taking among plenty of obscure stocks. These four in particular caught my eye.

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1. BancFirst Oklahoma ( BANF)

Alright, I know what you're thinking: ''A bank stock on a list of dependable dividend payers?''

Hear me out...

BancFirst Oklahoma should not be lumped in the same heap as the big money center banks. This is a community bank with less than 90 branches in 50 Oklahoma counties as of late January. Community banks typically don't engage in trading, complex mortgage securities or any of the fare that was so problematic for big banks during the financial crisis.

BancFirst won't win any yield contests with a current yield of 2.8%, but consider the following: The bank didn't cut its dividend during the financial crisis. If we say the crisis started in 2007 and lasted until the end of 2009, then BancFirst's dividend jumped almost 28% during that time. From 1996 through today, this dividend has increased nearly seven-fold. With a history of increasing dividends like this, you may be buying a 2.8% yield now, but you could wind up with a much higher yield based on your original cost down the road.

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2. North European Royalty Trust ( NRT)

If you're familiar with oil royalty trusts, then chances are you're familiar with a name like BP Prudhoe Bay Royalty Trust ( BPT), not North European Royalty Trust. North European Royalty Trust isn't even based in Europe. It's based in New Jersey, and holds oil and gas lease rights for Exxon and Royal Dutch Shell ( RDS.A) in Germany.

No one is going to confuse Germany with Saudi Arabia or Canada when it comes to oil abundance. But there are oil dividends and then there are oil dividends. NRT's current payout is $2.84 per unit, good for a yield of 8.8%. Add to that, the trust has sharply outperformed Prudhoe Bay, Exxon Mobil and the U.S. Oil Fund ( USO) year to date, and you've got an anonymous, yet compelling investment opportunity.

Be advised: NRT's quarterly payout fluctuates. (For example, it was 55 cents in the first quarter, 73 cents in the second and 71 cents in the third.)

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3. National Bankshares ( NKSH)

Like BancFirst, National Bankshares is a community bank operating far away from the spotlight of a big city. That's a good thing. Its 3.6% yield isn't jaw-dropping, but it's certainly better than what you'd get with Treasuries or most major bank stocks. The Virginia-based bank started paying a dividend in May 2000, and the twice-yearly payout has been uninterrupted since then -- in fact, it has more than doubled.

The stock has languished year-to-date, tumbling almost 17%, though most of that decline was absorbed during August and September. A payout ratio of roughly 41% shows the bank isn't being strained by its dividend.

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4. Collectors Universe ( CLCT)

Simply put, Collectors Universe grades your old baseball cards and comic books so you can figure out how much they're worth. It's not the sexiest business to be in, but it works: the company pays about $0.33 in quarterly dividends and currently yields about 8.8%. Collectors Universe is up more than 10% year-to-date, easily outpacing the flat performances of the S&P 500 and the Nasdaq, the stock's home index. That outperformance has continued in the past month as Collectors Universe is up almost 17% compared with a 12% gain for the Nasdaq. The company paid its first dividend in 2006 and the payout has risen nearly five-fold since then.

Risks to Consider: All of these stocks have market caps that land them in the small-cap universe. If small-caps fall out of favor, then all four of these names could be exposed, regardless of what sector they're in. Specific to Collectors Universe, the payout ratio is a red flag, at almost 200%. With BancFirst and National Bankshares, the biggest risk might be that they're painted with the same brush as larger, riskier bank stocks.

Action to take: Either of the bank stocks mentioned here jibe well with a conservative investment thesis. Those looking for energy exposure and the tax benefits of owning trust units should consider Northern European Royalty Trust. Collectors Universe is speculative fare, given the high payout ratio, but it could work out well for those with the stomach for risk.

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This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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