by Jim Woods | May 30, 2012 11:06 am
When income is hard to come by, investors look to traditional stocks that historically throw off a lot of cash. High-profile dividend stalwarts such as Coca-Cola (NYSE:KO), Exxon Mobil (NYSE:XOM) and Procter & Gamble (NYSE:PG) get a lot of love and attention from income investors, but these are just some of the stocks delivering shareholders attractive yields.
Flying under the radar are stocks with much lower profiles than the aforementioned Dow components, but with similarly stable business models that also have proven to be solid dividend performers.
If you’re an income-oriented investor, then stable, dependable yield is much more important than huge spikes higher in the share price. There’s nothing wrong with share price appreciation, of course — but it’s not the defining attribute for those who’d rather date dull but dependable dividend divas. And if that description fits you, I’ve got five under-the-radar dividend divas ready for your immediate attention:
Bemis Company (NYSE:BMS) doesn’t make the food you eat, the coffee you drink or the batteries you buy. Bemis Company does make the plastic packaging those items are wrapped in, however.
As the leading company in the flexible packaging products space, Bemis is one of those stalwart industrial firms that nobody has ever heard of, but that nearly everyone has indirectly purchased — even if they weren’t aware of it.
The ubiquity of Bemis’ packaging products is present throughout many industrials, and for many years, it has allowed the company to pay consistent dividends — not just for a few years, or even for a few decades. Rather, Bemis has kept shareholders smiling by paying dividends since 1922. Owners of BMS shares are getting an annual dividend yield of 3.3%.
Although BMS shares haven’t burned up the equity charts in terms of share price performance, the stock is up a respectable 6% over the past two years. If you want a steady performer offering a good dividend yield, wrap your mind around the possibilities in BMS.
Much like Bemis, Cintas (NASDAQ:CTAS) is one of those companies that you do business with each week and don’t even know it. That’s because Cintas is the maker of uniforms for a wide variety of companies whose employees are required to wear what’s known in the industry as “corporate identity” clothing. Employees — such as those from restaurant behemoth McDonald’s (NYSE:MCD) — wear uniforms provided by Cintas, and that’s just one of thousands of well-known businesses that get their corporate identity wear from this under-the-radar dividend diva.
As for those dividends, the company has provided a well-fitting payout since 1984, and although the annual dividend yield is on the low side when compared to the other stocks in this list, CTAS shares still boast a respectable 1.4% yield. That yield might not be stellar, but when you consider that over the past two years, CTAS shares have surged nearly 44%, the stock becomes tailor-made for those looking to build an income portfolio that also provides a little extra share-price upside.
When your vehicle breaks down, the fix usually involves some new parts, and many of the parts used to repair cars throughout North America are sold by automotive repair distribution giant Genuine Parts (NYSE:GPC). The company operates the wildly successful NAPA brand automotive retail stores, but it’s not just retail sales that keep the engine purring at Genuine Parts. The company also provides parts and accessories to industrial dealers such as those in the commercial truck, farming and industrial areas.
Genuine Parts is like many low-profile firms in that you might not recognize the name, but you’ve probably done business with it if you’ve ever had to repair your vehicle.
For income investors, GPC shares have been keeping the fiscal motor running since 1948, paying dividends ever since. The annual dividend yield on this diva is 3.2%, which puts it right up there with the big boys on this list. Like Cintas, GPC shares also offer some outstanding upside — the stock has driven higher by nearly 53% during the past two years.
There’s a demographic reality in the country, and it is that the baby boom generation is aging rapidly. That means an increased demand for elderly care services such as health care facilities, nursing homes, senior housing and hospital and skilled nursing services.
Enter HCP, Inc. (NYSE:HCP). The company is a hybrid real estate investment trust, or REIT, that invests primarily in properties serving the healthcare industry. The company also invests in what’s known as mezzanine loans and other debt instruments related to the financing of these properties.
The great thing about HCP is it’s in a growth industry, but it’s not merely a growth stock. Rather, it’s an income play that is well positioned not just in terms of growth in the health care business, but also because of its dividend growth potential. This REIT currently boasts an impressive yield of 4.9%, easily the best on our list of under-the-radar dividend plays. Moreover, the shares are up nearly 29% during the past two years, and that’s growth any income investor can embrace.
A growing global economy always is in need of good, old-fashioned steel to fashion new buildings and new cities. Nucor Corp. (NYSE:NUE) provides the raw steel and steel products that go into building the world. And despite the chatter surrounding a Europe-induced global recession, there’s still massive growth taking place all over the world, especially in places like China, India, Brazil — and yes, even the United States. This means robust demand for steel, and this translates into plenty of revenue that Nucor can fabricate into fiscal girders strong enough to support income investors’ portfolios.
Nucor’s dividend record is impressive, as the company has dolled out hardened payouts since 1973. The stock also comes with a sturdy 4% dividend yield, which should appeal to just about every income investor. Nucor’s shares haven’t been stalwart performers of late, as fears of a global growth slowdown have hurt the stock. However, NUE still is a strong dividend performer, and at current price levels, now might be a very good time to build a position in this high-yielding dividend payer.
As of this writing, Jim Woods did not hold a position in any of the aforementioned securities.
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