by Bryan Perry | March 14, 2012 6:00 am
The stock market took a bit of a hit a week ago Tuesday, perhaps ending some of the joy, albeit short term, that investors felt as they watched their portfolios rise earlier in the month.
As always, a great play to take some of the heartburn out of the ups and downs of the market, are solid dividend stocks. Why not keep one eye on market-beating dividend yields while you keep your other (wary) eye on the bouncing indexes?
Here are 12 stocks you can play in both the “Aggressive High” and “Conservative Yield” categories.
AGIC Convertible & Income Fund (NYSE:NCV), Yield 11%: This fund is starting to act up as confidence transfers from pure fixed income to that of convertible debt when the economy shows clear signs of improvement. During 2009, when this sentiment shift occurred, shares of NCV vaulted more than 100%. This year could show a repeat performance.
E-TRACS 2x Leveraged Long Wells Fargo Business Development Co. ETN (NYSE:BDCL), Yield 16%: My channel-checks in the BDC sector this past week suggest that business conditions continue to exhibit upward momentum. We get spoiled by capital gains from certain asset classes, but the yields these securities throw off are enviable.
SandRidge Permian Trust (NYSE:PER), Yield 9%: Energy assets paused and are back on the uptrend that’s supported by global demand. Domestic onshore oil and gas exploration and production is the best way out of the Middle East. It creates high-paying jobs in the U.S. while simultaneously developing alternative sources of energy. Do both! Are you listening Mr. President? And this isn’t Rick Santelli on the phone.
SandRidge Mississippian Trust (NYSE:SDT), Yield 9%: Here’s something you didn’t know about me: My dad dated both of the original Doublemint twins back in the 1940s. They all grew up together on the Chicago’s North Shore in the same neighborhood. The gum’s tagline was “Double your pleasure, double your fun.” I won’t go there, but Dad could pick ‘em! SandRidge has just as hot a hand in the oil patch.
Two Harbors Investment (NYSE:TWO), Yield 15%: There’s a rising enthusiasm surrounding a fat 40 cent dividend payment about to trade ex-dividend around March 22 that you don’t want to miss. The stock has potential price gains in the current market where investors can ride the recovery for distressed mortgages in a company that uses analytical hedges that are too hard to pronounce.
Cheniere Energy Partners LP (NYSEAMEX:CQP), Yield 8%: The company secured yet another major contract with KOGAS of Korea, the largest importer of liquefied natural gas (LNG) in the world. LNG is America’s newest export commodity, and we have arguably the world’s largest supply of it. From the standpoint of getting LNG to foreign markets, Cheniere Partners has a virtual monopoly in its ownership of the Sabine Pass Terminal in southwest Louisiana. With this issue, CQP moves to the Conservative portfolio.
Lorillard (NYSE:LO), Yield 4%: Following a heady Q4 2011 earnings report and a 19% hike in the dividend, shares of LO are set to make a quantum move up by year-end. With the analyst community just now getting on board with this name, I expect a steady rise in money flow into LO.
Franklin Templeton Limited Duration Income Trust (NYSEAMEX:FTF), Yield 7%: It’s my view that interest rates have bottomed for the current economic cycle and that bond yields will rise as the economy tacitly improves in 2012. In such a scenario, floating-rate corporate debt with short maturities will be a smart place to have capital positioned. Not only are investors getting a very attractive yield in the corporate debt market, but they’re also removing the risk of principal erosion if rates push higher.
Nuveen Floating Rate Income Opportunity Fund (NYSE:JRO), Yield 7%: It’s so nice when a sector just doesn’t run away from you and offers several opportunities for new money to get involved. Such is the case for floating-rate corporate debt. Balance sheets are strengthening as the economy improves, and investors get interest tied to the one-month London Interbank Offered Rate (LIBOR) that currently stands at 0.24%. This sector is set to be a huge winner in the next year.
New York Community Bancorp (NYSE:NYB), Yield 7%: While missing estimates by a penny, the company’s nonperforming loan portfolio fell by 37%, a huge improvement in its asset base. NYB lets investors collect the highest dividend yield available among all major bank stocks. The recent good news from the labor and housing markets is major positive for future demand for lending, and it’s why we’re seeing the sector rally.
PPL (NYSE:PPL), Yield 5%: Despite putting the smack down to earnings estimates in the latest quarter, besting estimates by 12.90%, shares of PPL have been hit as a source of funds for more risk-on assets by fund managers. The stock now trades roughly 10% off its 52-week highs, presenting an opportunity for those seeking a utility holding that’s hitting on all cylinders.
Verizon (NYSE:VZ), Yield 5%: After pulling back two points from its 52-week high following a slight earnings miss due to Apple royalties, VZ shares have found some love at the $38 level. The introduction of the iPhone 4S and the new iPad are music to Verizon’s ears as data plans are set to pad profits big time from wider usage of mobile devices.
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