Yield seeking continues to be one of the favorite pastimes of investors, this year. Many have turned to the stock market to provide the income they need to support their retirement or other cash flow needs.
But as the market has powered higher, it has become harder to find quality dividend stocks. Many of the higher-yielding situations are stocks that have been declining because of poor fundamentals, which could lead to capital losses far in excess of the dividends paid out.
Now more than ever, investors need to seek quality opportunities that provide high levels of cash flow in the form of dividends.
Fortunately, we can use our stock-picking tool, Portfolio Grader, to find dividend stocks with high-quality fundamentals.
Vector Group (VGR)
Vector Group (VGR) is usually thought of as a tobacco stock. The company does make cigarettes under 188 different brands and private-label arrangements, but there is more to this company than just tobacco.
Vector Group recently increased its ownership in real estate broker Douglas Elliman Realty and now reports that company as part of its overall operations. Real estate now represents 44% of revenues, and that should increase going forward as the company expands away for the declining tobacco business.
The real estate operations just reported a 37% year-over-year increase in sales and should be the driver of future growth for Vector Group. Portfolio Grader noticed the improved condition of the company back in March and upgraded VGR stock to an “A.” VGR stock yields 7.74% and is a “strong buy” at the current price.
Air Industries Group (AIRI)
Next on our list of high-quality dividend stocks, Air Industries Group (AIRI) makes products for the aerospace industry, including things like landing gears, engine mounts and flight controls. Its products are used in a wide variety of military and commercial aircraft. AIRI also makes electromechanical devices that are used in military aircraft like the Blackhawk UH-60 helicopter and the F-36 Joint Strike fighter planes.
Air Industries has been looking to grow by acquisition and has completed two deals so far this year. It purchased Woodbine Products, an aerospace components company earlier this year and just announced that the company is buying Eur-Pac Holdings, a company that specialized in packaging and supplies.
Management just raised the dividend back in March, which prompted AIRI stock to be upgraded to an “A.” The stock yields 5.76% and remains a “strong buy” at the current price.
Ferrellgas Partners (FGP)
Ferrellgas Partners (FGP) is in the propane business. It distributes propane under the Blue Rhino name though its portable tank exchange program and a network of dealers and outlets.
Ferrellgas also supplies propane to agricultural and industrial customers and sells propane appliances and fittings. The company has been moving to diversify away from the propane markets and recently purchased Sable Environmental, a fast-growing fluid logistics provider operating in the Eagle Ford Shale fields.
FGP stock was upgraded to an “A” two weeks and ago and remains a “strong buy.” At today’s price, FGP stock yields 7.49%.
The search for yield becomes more difficult as stock prices work higher. Make sure you avoid the low-quality dividend traps that can hurt your portfolio performance. Use Portfolio Grader to find the high-yielding dividend stocks that also have high-quality fundamentals.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth,Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of this newsletters.