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) Chart MSFT 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 Chart MSFT Payout Ratio TTM data by YCharts

F Dividend Yield (TTM) Chart F Dividend Yield (TTM) data by YCharts

Ford ( F)

Price To Book: 3.5

Earnings Payout Percentage: 20%

Background: Ford Motor produces cars and trucks. The company and its subsidiaries also engage in other businesses including Ford Motor Credit Company. Ford trades an average of 37 million shares per day with a market cap of $68 billion.

Here's a fact you may not know, based on market cap: Ford is bigger, or at least more valuable than General Motors ( GM). GM has a valuation of $51 billion.

I've always viewed GM as the larger company, and I'm correct based on revenue. GM outsells Ford by about $10 billion a year, but even that difference is narrowing. What's even more startling is Tesla Motors ( TSLA) with a valuation of $22 billion.

To put the numbers in perspective, currently Ford sells more Focuses in about a week than total Tesla sales for a year. Adding insult to injury, unlike Telsa, Ford is profitable. Either Ford is heavily undervalued or Tesla is overvalued. I'm thinking both.

The bigger concern for now is Toyota Motors ( TM) as they go toe-to-toe fighting for bragging rights for the number one-selling car in the world. The previously mentioned Ford Focus was named the number one-selling car in 2012, but Toyota disputes the methodology in the count.

There's no debate the stock is rewarding investors. About a year ago I wrote several articles describing Ford as a bargain in the $10 area. So far so good, but Ford has massive upside, in my opinion. It may not feel comfortable buying a stock near its 52-week high but revenue and earnings growth justify a price far north of $20 a share.

The best part is that while waiting for $20 or more investors receive 40 cents a year in dividends for a yield of 2.3%. Admittedly, 2.3% is on the low side to make the list, but Ford is such a compelling stock right now that it makes the cut.

F Payout Ratio TTM Chart F Payout Ratio TTM data by YCharts

GLW Dividend Yield (TTM) Chart GLW Dividend Yield (TTM) data by YCharts

Corning ( GLW)

Price To Book: 1

Earnings Payout Percentage: 27%

Background: Corning manufactures optical fiber, cable and photonic products for the telecommunications industry and high-performance displays and components for television and other communications-related industries. Corning trades an average of 10 million shares per day with a market cap of $21 billion.

Corning is the clear leader in its space, with the next largest competitor having revenue less than 30% of Corning's.

Corning is essentially a stock you can buy, throw in the back of the drawer and forget about it, only to get reminded you own it four times a year when the dividend check arrives. The dividend is an attractive 2.7%. Unless you think display screens are going the way of the horseless carriage, Corning should have a strong future -- a future that likely belongs in your portfolio.

The stock appreciated 12% in the last year, and the average analyst target price is $16.44. Also, based on the float the short interest is unimportant and not a worry. The small amount of short interest is 2.2%.

GLW Payout Ratio TTM Chart GLW Payout Ratio TTM data by YCharts

At the time of publication the author had no position in any of the stocks mentioned.

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

Robert Weinstein is an active trader focusing on the psychological importance of risk mitigation, emotion and financial behavior of market participants. Robert co-founded the investing blog StockSaints, where he writes a journal about his trading activity and experiences.

In addition to TheStreet, Robert also contributes to Real Money Pro, providing real-time trading ideas for stocks, options and futures.

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