5 Big Dividend Payers With Rising Share Prices

NEW YORK (TheStreet) -- Top yielding stocks trending higher in price is the gold standard in investing. One of the motivating reasons people self-direct their portfolio is to outperform the big money managers.

We all know it's not easy to find high yielding stocks that are also increasing in price, but here is a list of stocks doing just that.

I begin by reviewing companies I already either trade or follow and have a large dividend. I add in a screen for large yield stocks and add the ones that meet the following criteria:
  • Easy to get in and out of with lots of liquidity, and trade with a small bid-ask spread to avoid slippage
  • The company must have a solid history of dividends with the earnings to pay them
  • I must believe the company will continue paying the current dividend or more
  • The chart pattern must be moving from the bottom left to the top right; 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 does an investor use this list of dividend stock ideas? This should be your starting point, not an end-all for your research. Make sure the industry and the company is a match for your investment objectives. Use your current professional knowledge as applicable to garner a market edge when entering or exiting a position.

    AEP Chart AEP data by YCharts

    American Electric Power (AEP)

    Background: American Electric Power is a public utility holding company which owns, directly or indirectly, all of the outstanding common stock of its domestic electric utility subsidiaries and varying percentages of other subsidiaries. Substantially all of the operating revenue of AEP and its subsidiaries is derived from the furnishing of electric service.

    The company trades an average of 3.7 million shares per day with a marketcap of $21 billion.

    52-Week Range: $35.85 to $43.96

    Book Value: $30.95

    Yield: 4.32%

    American Electric is in a strong bull trend. The moving averages are moving higher and the market is rewarding investors. Trend followers relish this pattern and as the price moves higher, I expect more investors will try to climb on for the ride.

    The trailing 12-month price-to-earnings ratio is 14, and the mean fiscal year estimate price-to-earnings ratio is 14.3, based on earnings of $3.05 per share this year.

    Investors are receiving $1.88 in dividends for a yield of 4.32%. Examining the dividend history of a company is a great way to help understand what we may expect in the future. Of course, the past doesn't guarantee future dividends, but it does paint a useful picture.

    The three-year average amount they have distributed to shareholders per year is $1.73. Over the last five years, the dividend has grown by an average of 4.3% per year.

    Revenue year-over-year has increased to $15.12 billion in fiscal 2011 year compared to $14.43 billion in the previous year. The last reported short interest is tiny. Short interest is 1.5%.

    AEP Dividend Chart AEP Dividend data by YCharts

    PM Chart PM data by YCharts

    Philip Morris International (PM)

    Background: Philip Morris is the leading international tobacco company, with products sold in over 160 countries. They own seven of the top 15 brands in the world and have a strong mix of international and local products that seek to appeal to a wide array of adult smokers. Philip Morris trades an average of 3.9 million shares per day with a marketcap of $154.7 billion.

    52-Week Range: $60.45 to $93.15

    Yield: 3.34%

    One of the cardinal requirements for a stock to make my cut is to have an uptrending chart. This bullish chart shows a steady climb with occasional share-adding dips.

    The mean fiscal year estimate price-to-earnings ratio is 17.8, based on earnings of $5.18 per share this year.

    Shareholders receive $3.08 annually in dividend payments. The yield based on a recent price is 3.34%. In the last three years, the average dividend paid per year was $2.50 per share.

    The last reported short interest is tiny. Short interest is 1.1%, which is little more than a rounding error for some companies.

    PM Dividend Chart PM Dividend data by YCharts

    PPL Chart PPL data by YCharts

    PPL (PPL)

    Background: PPL is an energy and utility holding company. PPL controls more than 12,000 megawatts of generating capacity in the U.S., sells energy in key U.S. markets and delivers electricity to customers in Pennsylvania and the UK. PPL trades an average of 4.6 million shares per day with a marketcap of $17.4 billion.

    52-Week Range: $26.13 to $30.27

    Book Value: $18.90

    Yield: 4.81%

    Based on estimated earnings of $2.34 per share this year, the forward price-to-earnings ratio is 12.8. Considering the trend over a longer period it's about time this company received some overdue price respect. I believe a price target short of $35 is too conservative, especially with the yield.

    Shareholders receive $1.44 annually in dividend payments. The yield based on a recent price is 4.81%. Over the last five years, the dividend has grown by an average of 4.9% per year.

    Shares have moved significantly higher in the last month, with a 5.1% improvement. PPL released earnings on July 08, 2012, and the closing price was $29.13. Based on a recent price of $29.81, shares are up 2.3%. The shares are only about 40 cents below the 52-week high.

    Currently, the short interest based on the float is small and not a very big concern. The short interest is 3.3% and one of the more bearish indicators. It costs a lot to hold PPL short so keep an eye on the short interest. If short interest climbs much higher, I would become concerned of what may lie under the hood that needs a closer look.

    PPL Dividend Chart PPL Dividend data by YCharts

    CVX Chart CVX data by YCharts

    Chevron (CVX)

    Background: Chevron is the fifth-largest integrated energy company in the world. The company was founded in 1879 and is headquartered in San Ramon, Calif. Chevron trades an average of 6.3 million shares per day with a marketcap of $224 billion.

    52-Week Range: $86.68 to $113.64

    Book Value: $66.25

    Price to Book: 1.71

    Yield: 3.17%

    The trailing 12-month price-to-earnings ratio is 8.5, the estimated fiscal year estimate price-to-earnings ratio is 9, based on earnings of $12.69 per share this year.

    The company currently pays a rich $3.60 per share in yearly dividends for a yield of 3.17%. Over the last five years, the dividend has increased by an incredible average of 9.0% per year. If you bought shares five years ago, your yield after adjusting for reductions in cost basis from dividends would be well over 10%.

    No short interest to speak of. The only ones feeling like the well went dry are the short sellers. The short interest is 1.1%.

    CVX Dividend Chart CVX Dividend data by YCharts

    PFE Chart PFE data by YCharts

    Pfizer (PFE)

    Background: Pfizer is a research-based, global pharmaceutical company that discovers and develops innovative medical products. Pfizer has three business segments: health care, animal health and consumer health care. The company was founded in 1849 and is headquartered in New York City.

    Pfizer trades an average of 34.8 million shares per day with a marketcap of $179.3 billion.

    52-Week Range: $17.05 to $24.49

    Price to Book: 2.24

    Yield: 3.68%

    Technically, the chart looks very strong with the moving averages climbing higher. As the moving averages move higher, so do the support levels.

    The mean fiscal year estimate price-to-earnings ratio is 10.8, based on earnings of $2.21 per share this year. I believe the shares are undervalued and will likely remain that way until after the elections, and we have a better understanding of what to expect for the next few years.

    The company currently pays 88 cents per share in dividends for a yield of 3.68%. In the last three years, the average dividend paid per year was 77 cents per share.

    PFE Dividend Chart PFE Dividend data by YCharts

    I use Zacks.com, WSJ.com, Tradestation, and Reuters for my data. P/E is generally adjusted P/E based on an average number of shares.

    At the time of publication, the author held no positions in any of the stocks mentioned.

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

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