5 Dividend Stocks to Help Feather Your Easter Basket

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Dividend stocks - 5 Dividend Stocks to Help Feather Your Easter Basket

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It’s no secret anymore that hedge funds, who pretty much rule the momentum of daily market swings, endured a very rough first quarter of performance on a collective basis as per several recently released reports.

The shift out of last year’s leaders — Internet, biotech and 3-D printing companies — has been nothing short of dramatic, with many of these former hot names down 30%, 40% and even 50%, in some cases, from their 52-week highs.

Clearly, these sectors were over-owned as professional fund managers chased performance all last year and now have been forced to rapidly liquidate to reduce exposure on the way down.

As a result, the bullish tone exhibited in the post-Yellen testimony on Capitol Hill just three weeks ago gave way to a massive rotation out of high-beta growth stocks into dividend-paying value stocks with price/earnings ratios that actually represent growth at a reasonable price. As expectations for high P/E equities to deliver outsized returns have dramatically fallen off, money has moved into market sectors that offer reliable returns and steady growth.

Here are five names that allow dividend investors to profit from this compelling income opportunity.

The LNG Revolution Marches On (CQH)

I’m recommending several stocks to my subscribers that put us on the cutting edge of the liquefied natural gas (LNG) curve, which is going to take off next year when one of my favorites, Cheniere Energy Partners L.P. (CQP), sends their first LNG shipments out overseas. They’re sold out for 20 years, and just spun off a sister stock, Cheniere Energy Partners L.P. Holdings (CQH), based on the new LNG plant they’re building in Corpus Christi, Texas.

I had a really good discussion with Cheniere about CQH recently, and the stock looks like a home-run. CQH owns a 55.9% limited partner interest in CQP; at present, its only business will consist of owning these CQP units, so its financial and operating results will depend on the performance of Cheniere Energy Partners. Hence, the dividend will be generated from CQP units, but investors in CQH will own shares in a limited liability company rather than a master limited partnership (MLP).

This latest Cheniere stock allows investors to piggyback this exciting LNG story, which is only going to get better, especially if Russia falls into a sanction issue with the rest of Europe. In that case, countries like Germany would need to get their gas and LNG from somewhere else, or at least part of it. That’s just going to be a boon to the U.S. LNG makers and transport companies. So I remain a huge bull on the natural-gas export theme and find it prudent to leverage up exposure in this space as opportunities arise. I expect CQH to make a big run after paying its first dividend, so I recommend that income investors get in beforehand.

Two More Up-And-Coming Energy Plays (GLOG, KYE)

Speaking of LNG, GasLog Ltd. (GLOG) is on a tear lately, up nearly 65% for the year-to-date. This LNG shipper has just a 1.7% dividend, but those kind of capital gains are hard to ignore. Unlike many of the nat-gas plays I recommend, this is a non-U.S. company, based out of Monaco — but it’s been prudent to put on select European companies with strong fundamentals as the European Central Bank gets ready to ramp up fiscal stimulus. GasLog just acquired three additional LNG carriers from Methane Services Ltd., bringing its fleet total to 14 ships in operation and seven ships on order, so GLOG shares could have an even brighter future ahead.

Besides the two stocks I just named, those looking to profit from energy without directly owning any MLPs will also want to consider Kayne Anderson Energy Total Return Fund (KYE). Shares of KYE bottomed out in the mid-$25 range and now have come up with the rest of the MLP sector as energy prices improved. KYE is a collection of the leading energy-related MLPs, some of which are underperforming; the shares pay quarterly and just traded ex-dividend, so there’s no particular hurry to add this name. But my rating for the stock is on the rise.

Profit from the Emerging-Markets Comeback (PVD) (SDIV)

Another theme that I’m interested in is emerging markets, which are finally starting to show signs of life. On my watch list is A.F.P. Provida S.A. (PVD), an asset manager based out of Chile. Stocks with exposure to just about any emerging market were hammered in recent months, but over the long term I’m bullish on South America in particular due to the boom in commodities…and the fact that Brazil is hosting both the FIFA World Cup in 2014 and the Summer Olympics in 2016 doesn’t hurt, either.

The company’s full name is “Administradora de Fondos de Pensiones Provida,” and as the name implies, Provida primarily focuses on Chilean pension funds, although it also holds a stake in other pension-fund administrators based out of Peru, Ecuador and Mexico. U.S. life insurance giant Metlife (MET) owns a 64% stake in Provida after making a $2 billion deal with previous stakeholder Banco Bilbao Vizcaya Argentaria S.A. (BBVA) back in February 2013.

In my Cash Machine advisory, we owned PVD from August 2010 through January 2012, when I opted to take our 44% profits off the table as my preference was shifting more in favor of U.S. equities at that time. Soon it might be time to take another look at Provida and its hefty 10%+ dividend yield.

Global X SuperDividend ETF (SDIV) could be another way to play the recent rebound in emerging-market stock indexes – and this exchange-traded fund (ETF) is also a recent beneficiary of the market rotation into dividend stocks as a search for value. It’s a good proxy for some overseas exposure, and it’s all about income: the fund is based on the Solactive Global SuperDividend index, which tracks the 100 highest-dividend-yielding global equities.

SDIV’s top holdings include Australian retailer David Jones Ltd., Brazilian companies Banco do Brasil S.A. and Terna Participações S.A., and Ford Otomotiv Sanayi A.S., the Turkish auto maker. So bullish sentiment for Europe and the more-developed emerging markets make this fund a good candidate to monitor for now and possibly to add to one’s portfolio in the near future.

 

 

 

 

 


Article printed from InvestorPlace Media, https://investorplace.com/2014/04/dividend-stocks-bbva-met-cqp-cqh-glog/.

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