The close of Q2 brings means its time to update to the dividend lists I maintain here at Dividend Ladder. After all of the back and forth most stocks have maintained a very similar HPR rating compared to the first quarter of 2013. The HPR (Historical Performance Rating) score is a system I created to rate dividends stocks based on performance and dividend fundamentals. You can read more about it here.
The top 50 list has many of the known favorites. Microsoft managed to creep into the bottom of this list as well as Access National. Access National was my lender when I purchased my house last year and I hadn’t really considered them as an investment. They could be worth a deeper look.
A couple of fun facts about the top 50 HPR stocks:
Avg P/E Ratio: 16.6
Avg Yield: 2.9
Avg 5yr Dividend Growth %: 14.3
Avg 3yr Income Growth %: 26.4
Avg Payout Ratio: 46.1
Avg 1yr Return: 30.5
Not a bad group to own as a whole but this is all based on what these stocks have done, not what they will do.
Top Rated Stocks
The top 4 rated stocks for July are:
1. Shaw Communication (SJR)
Shaw continues to be highly rated. Strong yield, cash flow, dividend growth and income growth. The only concern I have is around future growth. Many analyst believe the competition could start creeping in.
2. Leggett & Platt (LEG)
LEG is just barely holding onto this position. It’s really pushing the limits with just 7% dividend growth (my minimum for a top score) and a payout ratio of 66%. It does get a few bonus points for its 40+ years of consecutive dividend growth.
3. Alliant Energy (LNT)
This utility company has been on a wild ride so far this year. I don’t expect that to end anytime soon. It has a solid yield around 3.6% and very strong income growth.
4. Exxon (XOM)
Most every veteran dividend investor is very familiar with this dividend payer. Exxon has a 2.6% yield with just at 26% payout ratio and strong income growth.
Each of those 4 stocks has an HPR rating of 99+. There are a bunch at 98 so I won’t try to pick one and make this a top 5 list.
REITs
I’ve also updated the list of REITs with new dividend and performance data. This list has 159 REITs that yield 2%+ and are currently trading above $5 per share. This group needed the update the most after of the wild ride REITs have been on over the last few months.
Here’s a quick look at the group as a whole:
Avg Yield: 5.6
Avg 2yr Dividend Growth: 9.3
Avg 1yr Return: 19.4
Avg YTD Return: 7.9
The REIT averages are a little better than I expected them to be. While many REITs have suffered through a recent sell off and are approaching more attractive valuations we are still in a stock picker’s market. These stock’s short term performance will be closely tied to what happens with the 10 year Treasury yield over the next few months.
