1Dividend Advisor

Dividend Advisor

Table of Contents

Letter from the Editor

May 2014 in Review

Notable May Dividend Changes

June 2014 Preview

June Economic/Earnings Calendar

Dividend Stock of the Month

Best Dividend Stocks List

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Dividend.com

June, 2014

A Letter from the Editor

Investing is Only as Hard as You Make It “Everything should be made as simple as possible, but not simpler.”

--Albert Einstein

I’m often amazed at the number and scope of complex investment vehicles and techniques in today’s world. Some of these things sound more like terms from an engineering technical manual, rather than financial products that people would be willing to sink their hard-earned money into:

• Structured reverse convertible securities

• Collateralized mortgage obligations

• Cumulative redeemable preferred income equity replacement securities

• Floating rate trust preferred securities

I could go on, but you probably get the idea. The complex terms that make up these instruments are usually designed to do one thing: confuse investors into purchasing or using something they know little about.

In fact, investors are often purposely kept in the dark about the nature of the products being sold to them. Brokers and issuers are incentivized to do so. “No need to look under the hood,” they’ll tell you. “She purrs like a kitten. Honest!”

The Case for Simple

I’ve always been one for simplicity. I have one laptop for both work and home use. I keep my email at “Inbox zero” at all times. I also plan each workday out ahead of time, budgeting the right amount of time

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A Letter from the Editor

for each task. Simple.

… But Not Too Simple

There’s a fine line between simplicity and over-simplicity. A simple portfolio is good, but if you sink all of your funds into just a couple of stocks, you put yourself at serious risk (and managing risk is a very important part of investing). The actual mix of securities you choose, along with the number of individual securities you own, will vary depending on a variety of factors, including:

• Risk tolerance

• Investing experience and acumen

• How much time you have to dedicate to your investments

• And so on

These are uncomplicated factors that shouldn’t take you more than a few moments to consider.

Why Complicate Things?

In short, investing should be quite simple: consistently put your money to work in quality high-yielding stocks, scaling into positions over time to create a diversified portfolio of a size that’s manageable for you. Then monitor your holdings regularly, sometimes trimming positions when needed. Why would anyone want to make it more complicated than that?

Tom ReeseEditor & Co-Founder, Dividend.com

3Dividend Advisor

May 2014 in Review

M&A Activity Heats Up

Big-Name M&A Activity

During the month of May, several major acquisitions were announced, including AT&T’s plan to purchase DirecTV for $48.5 billion. The company noted that this deal requires the renewal of DirecTV’s contract with the NFL for its Sunday Ticket plan.

After several rumors about a possible merger, tobacco company Reynolds American announced that it is in the late stages of agreements to acquire its competitor Lorillard. This deal would combine the second and third largest tobacco companies in the world.

Hillshire Brands reported on May 12 that it was in talks to acquire Pinnacle Foods for $4.3 billion. Just two weeks later, Pilgrim Pride Corp announced that it has made an offer to purchase Hillshire Brands for $6.4 billion. Before the end of May, Tyson Foods joined the bidding war and made an offer to acquire Hillshire Brands for $6.8 billion.

Apple announced on May 28 that it has agreed to acquire Beats Music and Beats Entertainment for $3 billion. This marks Apple’s largest acquisition in its history.

After submitting offers to acquire British drug company AstraZeneca, Pfizer removed its $119 billion offer and reported that it does not intend to make any more offers on the company.

Treasury Yields Hit Hard

Treasury yields plunged in mid-May and continued to fall. After remaining flat for several months, the 10-year yields fell under 2.45% in May – the lowest in 11 months. The fall was primarily due to weak data in the German bond market and increased bond buying from institutional investors. ‘

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May 2014 in Review

Despite U.S. economic data that has been generally positive, reports from the U.S. Treasurys sent yields falling and caused the S&P 500 to dip in mid-May. Although yields have yet to recover, the S&P rebounded to new highs.

Small Caps Stumble

The Russell 2000 continued to fall in May as investors moved towards less risky stocks. After the index plunged below its 52-week high by more than 10% in the middle of the month, it was able to make a rebound towards the end of May.

May’s Key Earnings Reports

Several big-name companies reported earnings in May. Here is an overview of some of the results.

Company Yield Date Results

ConocoPhillips 3.48% May 1 Reported lower profits, but beat estimates. Revenue increased, and beat estimates. Shares rose.

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May 2014 in Review

Company Yield Date Results

Exxon 2.73% May 1 Earnings and revenue both dropped from last year. The company beat earnings estimates but missed on revenue.

Kellogg Company 2.71% May 1 Earnings increased and beat estimates, while revenue fell and missed estimates. Shares fell but recovered

Kraft 3.59% May 1 Beat earnings estimates, but missed on revenue.

Pfizer 3.51% May 5 Both profits and revenue declined. Missed on revenue, but beat earnings estimates. Shares remained flat.

Disney 1.03% May 6 Beat on both earnings and revenue. Shares rose after hours.

Cisco 3.07% May 14 Earnings and revenue declined, but beat estimates. Shares soared after hours and opened higher the following day.

Macy’s 2.13% May 14 Earnings rose, but investors were left disappointed with sales.

Kohl’s 2.88% May 15 Both profits and sales were down and missed analysts’ estimates. Shares plummeted, but have begun to recover.

Wal-Mart 2.53% May 15 Earnings rose, while revenue dipped. Both earnings and revenue missed estimates. Shares plunged.

Lowe’s 1.54% May 21 Both earnings and revenue increased. Earnings beat estimates, but revenue missed. Shares rose in the next few days.

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May 2014 in Review

Company Yield Date Results

Target 3.09% May 21 Revenue increased, but profits fell. Missed on earnings estimate, beat on revenue. Shares dipped but recovered by the end of the trading day.

Bank of Montreal 4.11% May 28 Both profits and revenue rose and beat estimates.

Earnings were mixed in the month of May. Several large retailers reported disappointing earnings for the quarter, blaming bad weather for the weak results. Despite a dip from retailer earnings releases, the market was able to rebound from these losses.

A Quick Recap of Last Month’s Good and Bad Scenarios

May’s Bullish Scenarios

1. Fed sees weakness and pledges to help Although no final decisions were made, the Fed discussed the monetary policy and how to best control interest rates.

2. Earnings turn from mixed to strong Earnings remained mixed as large retailers released weak results for the quarter.

3. Russia/Ukraine saga comes to an end During the month of May, Petro Poroshenko was elected as president, but the crisis continues. Poroshenko continues to promise near term government control.

May’s Bearish Scenarios

1. Second half of earnings season results in strong sell-offs Several retailers including DSW, Staples and Wal-Mart reported weak results, which caused major sell-offs in the market in May.

2. Valuations for many major names come under scrutiny Disappointing earnings releases in May sent shares of some big-name companies plunging.

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May 2014 in Review

3. The Russia/Ukraine conflict turns really ugly While little progress has been made between Russia and Ukraine, Poroshenko vows to fix the situation quickly.

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Notable May Dividend Changes

There were several big-name dividend payers that boosted dividends in May. Among the largest increasers were National Oilwell Varco (NOV), UBS (UBS), Anadarko Petroleum (APC), Southwest Airlines (LUV) and EnerSys (ENS).

JP Morgan (JPM) raised its dividend by over 5% in May. This increase may not seem like a significant raise, but it sets the company apart from other major banks including Bank of America (BAC) and Citigroup (C) who have be unable to raise dividends since the financial crisis.

For a complete list of payout changes, be sure to check out our Dividend Payout Changes tool.

IncreasesStock Symbol

Company NameOld Payout ($)

New Payout ($)

Percent Change

Yield

NOV National Oilwell Varco 0.26 0.46 +76.92% 2.25%UBS UBS AG (USA) 0.15 0.25 +66.67% 1.24%APC Anadarko Petroleum 0.18 0.27 +50% 1.07%VMI Valmont Industries 0.25 0.375 +50% 0.95%

WAB Westinghouse Air Brakes Technologies 0.04 0.06 +50% 0.31%

LUV Southwest Airlines 0.04 0.06 +50% 0.93%AME Ametek Inc. 0.06 0.09 +50% 0.69%ENS EnerSys 0.125 0.175 +40% 1.04%RIG Transocean LTD 0.56 0.75 +33.93% 7.05%WDC Western Digital 0.30 0.40 +33.33% 1.89%AAON AAON 0.10 0.13 +30% 0.83%PSX Phillips 66 0.39 0.50 +28.21% 2.44%BRS Bristow Group 0.25 0.32 +28% 1.67%NLSN Nielsen Holdings N.V. 0.20 0.25 +25% 2.10%M Macy's 0.25 0.3125 +25% 2.15%LII Lennox International 0.24 0.30 +25% 1.42%OMC Omnicom Group 0.40 0.50 +25% 2.87%TSCO Tractor Supply Company 0.13 0.16 +23.08% 1.00%PL Protective Life 0.20 0.24 +20% 1.86%

AGII Argo Group International Holdings Ltd Ord 0.15 0.18 +20% 1.53%

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Notable May Dividend Changes

Stock Symbol

Company NameOld Payout ($)

New Payout ($)

Percent Change

Yield

MAS Masco Corp. 0.075 0.09 +20% 1.69%MNRO Monro Muffler 0.11 0.13 +18.18% 0.96%KEY KeyCorp 0.055 0.065 +18.18% 1.94%DCI Donaldson Company 0.14 0.165 +17.86% 1.63%MAR Marriott International, Inc. 0.17 0.20 +17.65% 1.35%CVG Convergys Corporation 0.06 0.07 +16.67% 1.26%FELE Franklin Electric 0.0775 0.09 +16.13% 0.81%TEL TE Connectivity Ltd. 0.25 0.29 +16% 2.00%POOL Pool Corp 0.19 0.22 +15.79% 1.30%PEP PepsiCo 0.5675 0.655 +15.42% 3.05%STT State Street Corp 0.26 0.30 +15.38% 1.86%SWY Safeway 0.20 0.23 +15% 2.69%CSC Computer Sciences 0.20 0.23 +15% 1.49%NOC Northrop Grumman 0.61 0.70 +14.75% 2.33%ARG Airgas Inc. 0.48 0.55 +14.58% 2.08%JOY Joy Global Inc. 0.175 0.20 +14.29% 1.37%FMBI First Midwest Bancorp 0.07 0.08 +14.29% 2.01%GNTX Gentex Corp 0.14 0.16 +14.29% 2.19%NWL Newell Rubbermaid 0.15 0.17 +13.33% 2.30%BHI Baker Hughes 0.15 0.17 +13.33% 0.97%BG Bunge Ltd. 0.30 0.34 +13.33% 1.80%CAH Cardinal Health 0.3025 0.3425 +13.22% 2.00%AXP American Express 0.23 0.26 +13.04% 1.17%MMC Marsh & McLennan Corporation 0.25 0.28 +12% 2.25%TIF Tiffany & Co. 0.34 0.38 +11.76% 1.57%FDS Factset Research Systems 0.35 0.39 +11.43% 1.43%PPS Post Properties 0.36 0.40 +11.11% 3.15%IVZ Invesco Ltd. 0.225 0.25 +11.11% 2.80%SWX Southwest Gas Corp. 0.33 0.365 +10.61% 2.80%TWX Time Warner 0.2875 0.3175 +10.43% 1.80%HPQ Hewlett Packard 0.1452 0.16 +10.19% 1.90%

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Notable May Dividend Changes

Stock Symbol

Company NameOld Payout ($)

New Payout ($)

Percent Change

Yield

NTAP NetApp Inc. 0.15 0.165 +10% 1.85%VIAB Viacom 0.30 0.33 +10% 1.55%CBT Cabot Corp 0.20 0.22 +10% 1.55%

HY Hyster-Yale Materials Handling, Inc. 0.25 0.275 +10% 1.29%

BAH Booz Allen Hamilton Holding Corporation 0.10 0.11 +10% 1.84%

WRB WR Berkley Corporation 0.10 0.11 +10% 1.00%SEMG SemGroup Corp 0.22 0.24 +9.09% 1.42%AIZ Assurant, Inc. 0.25 0.27 +8% 1.62%HAS Hasbro Inc. 0.40 0.43 +7.5% 3.19%HST Host Hotels & Resorts Inc. 0.14 0.15 +7.14% 2.76%

BEPBrookfield Renewable Energy Partners LP Partnership Units (Bermuda)

0.3625 0.3875 +6.9% 5.24%

ESLT Elbit Systems Ltd. 0.30 0.32 +6.67% 2.09%AIN Albany International 0.15 0.16 +6.67% 1.71%EXPD Expeditors International 0.30 0.32 +6.67% 1.39%FLO Flowers Foods 0.1125 0.12 +6.67% 2.29%HFC HollyFrontier Corp 0.30 0.32 +6.67% 2.62%

CCOI Cogent Communications Group, Inc. 0.16 0.17 +6.25% 1.85%

AMT American Tower Corp 0.32 0.34 +6.25% 1.54%BAX Baxter International 0.49 0.52 +6.12% 2.79%ASMI ASM International N.V. (USA) 0.547825 0.58123 +6.1% 1.48%RLI RLI Corp 0.17 0.18 +5.88% 1.62%WMB Williams Cos. 0.4025 0.425 +5.59% 3.63%PAG Penske Automotive Group 0.18 0.19 +5.56% 1.63%SBRA Sabra Health Care REIT Inc. 0.36 0.38 +5.56% 5.29%TU Telus Corp 0.36 0.38 +5.56% 3.97%ACC American Campus Communities 0.36 0.38 +5.56% 3.95%JPM JP Morgan Chase 0.38 0.40 +5.26% 2.93%AWR American States Water 0.2025 0.213 +5.19% 2.91%SEAS SeaWorld Entertainment Inc 0.20 0.21 +5% 2.69%

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Notable May Dividend Changes

Stock Symbol

Company NameOld Payout ($)

New Payout ($)

Percent Change

Yield

STAG STAG Industrial, Inc. 0.105 0.11 +4.76% 5.29%CLX Clorox Co. 0.71 0.74 +4.23% 3.35%HNI HNI Corp 0.24 0.25 +4.17% 2.64%NI NiSource 0.25 0.26 +4% 2.78%ALV Autoliv Inc. 0.52 0.54 +3.85% 2.08%

PBA Pembina Pipeline Corp. Ordinary Shares (Canada) 0.14 0.145 +3.57% 4.26%

MSA Mine Safety Applications 0.30 0.31 +3.33% 2.33%ACE Ace Limited 0.63 0.65 +3.17% 2.53%MKSI MKS Instruments 0.16 0.165 +3.13% 2.29%PEGI Pattern Energy Group Inc 0.3125 0.322 +3.04% 4.37%CLNY Colony Financial Inc. 0.35 0.36 +2.86% 6.63%JCOM j2 Global Communications 0.2625 0.27 +2.86% 2.25%SFL Ship Finance International 0.40 0.41 +2.5% 8.51%POR Portland General Electric 0.275 0.28 +1.82% 3.36%MCHP Microchip Technology 0.355 0.3555 +0.14% 3.03%

Decreases

Stock Symbol

Company NameOldPayout ($)

NewPayout ($)

% Change Yield

OAK Oaktree Capital Group LLC 1.00 0.98 -2% 7.73%RGR Sturm, Ruger & Co., Inc. 0.54 0.49 -9.26% 3.60%SCCO Southern Copper 0.12 0.10 -16.67% 1.31%BAM Brookfield Asset Management 0.20 0.16 -20% 1.44%CZZ Cosan Ltd Ord 0.304431 0.1553 -48.99% 1.34%WLK Westlake Chemical Co. 0.252 0.126 -50% 1.31%VHI Valhi Inc. 0.05 0.02 -60% 1.34%

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Notable May Dividend Changes

Initiations

Stock Symbol

Company Name Payout ($) FrequencyPercent Change

Yield

PEGI Pattern Energy Group Inc 0.3125 Quarterly +0% 4.37%

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June 2014 Market Preview

Earnings will be slowing down in June, but there are still several large companies that will be releasing Q1 results including J.M. Smucker Company (6/5), Men’s Wearhouse (6/11), FedEx (6/18), Kroger (6/19), Darden Restaurants (6/20), KB Home and Lennar (6/23), Walgreen Company (6/24), Accenture and ConAgra Foods (6/26), and several others.

Important economic data that will be released in June will include the Employment Situation (6/6), FOMC minutes (6/18), Existing Home Sales (6/23), and New Home Sales (6/24).

Some Historical Perspective

As far as returns, June tends to be average when compared to the entire year. Over the past 80 years, June returns have averaged 0.7%.

Although June returns have been positive on average over the long term, in the last 10 years it has been one of the worst performing months. In 2013, total return for the S&P 500 in June was 1.18%, while it was 3.99% in 2012.

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June 2014 Market Preview

The summer months have a history of producing weak returns for investors, but this does not mean that there will not be a chance for upside this month.

What Could Go Right in June

Editor’s Note: We find it very useful when looking ahead to identify the things that could go right in the markets (bullish events) versus those that could go wrong (bearish events). The following are not predictions, simply potential scenarios that could play out over the next month to push the markets higher or lower.

1. Unemployment numbers continue to improve

Applications for unemployment benefits fell to a 7-year low in May to 300,000.

The total number of people receiving benefits also declined to 2.63 million – the lowest since November 2007. May employment data indicated that unemployment fell to 6.3% in April from 7.5% in the year prior.

Unemployment has been trending downward and there is a good chance that numbers will improve. The Employment Situation for May will be released on June 6 and will determine if the upside is continuing.

2. Investors complacent with monetary policy and continue to chase yield

The FOMC minutes will occur on June 18 and will provide investors with data on the current monetary policy. The data, which has an enormous amount of influence on the market, may leave investors confident with the market.

If investors are pleased with the data, there is a possibility for a strong market upside. This could however,

(Source: YCharts)

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June 2014 Market Preview

have the opposite effect if investors are unhappy after the Fed minutes.

3. Strong real estate numbers

Increases in the real estate industry are a possibility in June although housing growth has remained sluggish. Positive numbers in Existing Home Sales and Housing Starts could result in an upside for real estate investment trusts (REIT) and stocks in the financial sector.

Although a large amount of growth in the sector is unlikely, it would not be surprising to see at least minimal growth in home sales. Big-name homebuilders KB Home and Lennar will be reporting earnings on June 23.

What Could Go Wrong in June

1. Volatility returns

The VIX index dropped to its lowest point in over a year in May, but will that trend continue into June? The index fell following reports that the Fed will be doing its third monthly asset purchase plan.

While many investors have expressed that they are confident that the market will not be taking any major swings anytime soon, there are also several bearish investors that believe that we are due for a volatility spike.

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June 2014 Market Preview

2. Real estate numbers worsen

Real estate data can have a huge effect on financial stocks and on real estate investment trusts (REITS). Data from the Housing Starts on June 17 and Existing Home Sales on June 23 is a key indicator for this industry.

In May’s Existing Home Sales report, the data showed a 1.3% increase in April, but this was only the second gain in nine months. The data also revealed that there was a 0.5% gain in single family homes sold – the first gain in 2014.

The housing recovery has been improving, but has missed expectations as far as growth. If disappointing numbers are released in June, it could be bad news for some investors.

3. Stocks start to slip into summer slump

Although the S&P 500 has averaged a 0.7% return over the last 80 years, it has averaged a loss of 1.18% in the last 10 years. The summer months are typically the worst preforming months for the market compared to the rest of the year. In the last 50 years, the S&P 500 gained an average of 1.3% during the May–October period, compared to its average gain of 7.1% during the rest of the year.

S&P 500 June Returns

2003 1.13%2004 1.80%2005 -0.01%2006 0.01%2007 -1.78%2008 -8.55%2009 -0.43%2010 -5.20%2011 -1.83%2012 3.99%2013 -1.56%

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June 2014 Calendar of Economic Events

The following calendar contains key events for dividend investors to pay attention to in June 2014. Events colored in RED and GREEN indicate particularly important events.

Date Event(s)

June 2 Data: Jobless Claims, PMI, ISM; Construction Spending

June 3 Data: Motor Vehicle Sales, Factory Orders

Earnings: ABA

June 4 Data: International Trade; MBA Purchase Applications

Earnings: BF-B, PVH

June 5 Data: Jobless Claims

Earnings: SJM, JOY, COO

June 6 Data: Employment Situation

Earnings: KMG

June 9 Earnings: PBY

June 10 Earnings: SAIC, NCS

June 11 Data: MBA Purchase Applications; EIA

Earnings: HRB, MW

June 12 Data: Jobless Claims; Retail Sales

June 13 Data: PPI; Consumer Sentiment

June 16 Data: Industrial Production

June 17 Data: Housing Starts

Earnings: BOBE

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May 2014 Calendar of Economic Events

June 18 Data: FOMC Minutes

Earnings: FDX, JBL

June 19 Data: Jobless Claims

Earnings: KR

June 20 Earnings: DRI

June 23 Data: Existing Home Sales

Earnings: FINL, KBH, LEN

June 24 Data: New Home Sales; Case-Shiller; Consumer Confidence

Earnings: WAG

June 25 Data: GDP; MBA Purchase Applications; Durable Goods

June 26 Data: Jobless Claims; Personal Income and Outlays

Earnings: ACN, CAG

June 27 Data: Consumer Sentiment

June 30 Data: Chicago PMI, Pending Home Sales

Earnings: AYI

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Dividend Stock of the Month

Chevron Corporation (CVX)Finding bargains in today’s market is almost impossible, but we believe we’ve found one in integrated oil producer Chevron Corp (CVX). If you’re looking for some energy exposure in your portfolio, or even just a good defensive name to weather the impending economic storm, consider these bullish factors:

• Valuation at around 11x 2015 earnings estimates is among the best in its industry. Following a rough period of sell-offs through late 2013 after peaking in mid-2012, the shares have since put in a solid bottom and are primed for growth once again.

• Yield around 3.4% is toward the high end of its historic range.

• Company has been aggressive with recent dividend raises.

• Slow and steady business model makes company resistant to economic and market fluctuations (good defensive name for uncertain times).

• Company is executing plan to expand to Asia, which could lead to big earnings growth in coming quarters.

So there you have it, our investment thesis for CVX in a nutshell. As long as its yield remains in the mid-3% range, the stock remains a strong buy, especially during periods of market pullbacks.

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Dividend.com’s Best Dividend Stocks List

The following list is our current group of “Buy” rated stocks. Dividend.com Premium members have access to real-time email alerts regarding this list and much more.

Stock Symbol

Company Name

DARS™ Rating

Dividend Yield

Current Price*

Price Reco.**

Ex-Div Date

Pay Date

ABBV AbbVie Inc. 3.5 3.11% 54.03 36.69 4/11 5/15 COP ConocoPhillips 3.5 3.47% 79.55 53.47 5/21 6/2 CVX Chevron Corp 3.5 3.50% 122.32 116.69 5/15 6/10 D Dominion Resources 3.5 3.50% 68.52 69.58 5/28 6/20 DLR Digital Realty Trust 3.5 5.78% 57.40 52.88 6/11 6/30 KRFT Kraft Foods Group, Inc. 3.5 3.56% 59.03 44.32 4/9 4/25 LMT Lockheed Martin 3.5 3.26% 163.15 73.14 5/29 6/27 MO Altria Group 3.5 4.65% 41.31 33.45 6/12 7/10 PFE Pfizer 3.5 3.51% 29.60 21.49 5/7 6/3 PG Procter & Gamble 3.5 3.20% 80.40 77.92 4/23 5/15 T AT&T 3.5 5.20% 35.39 35.28 4/8 5/1 TD Toronto-Dominion Bank 3.5 3.80% 49.48 40.65 7/7 7/31 VZ Verizon 3.5 4.26% 49.72 51.14 4/8 5/1

* Prices and yields listed as of May 30, 2014

Quick-Hit Investment Thesis for Each Stock

1. AbbVie Inc. (ABBV)

This pharma giant, recently spun off from Abbott Labs (ABT), offers a 3.27% yield and some strong growth potential. Still reasonably valued at around 14x 2015 earnings estimates, it makes a nice addition to portfolios looking for drug exposure.

2. ConocoPhillips (COP)

One of the top performing large-cap integrated oil plays of the past several years, COP also offers one of the best yields in its industry, at around 4%.

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Best Dividend Stocks List

3. Chevron (CVX)

Can you say “undervalued?” At just 10x 2015 estimates, CVX is probably one of the best current long-term bargains in a very bargain-starved market. The company has a few big LNG projects that could pay off handsomely in coming years, its yield of 3.4% is very solid for the integrated oil space, and oil analysts expect its spreads to widen in coming quarters, following a tough stretch of bad weather.

4. Dominion Resources (D)

This large-cap utility/energy play has been on our internal watchlist for a while, and we finally feel the time is right to pull the trigger. As one of the few large-cap utilities that’s actually growing, D has made big investments in alternative energy, and has steadily grown its dividend over the past few years – with plenty of room to continue to raise it. We like the company’s current yield around 3.3% as well as its continued growth potential. Look to purchase these shares during periods of pullbacks and your portfolio will thank you.

5. Digital Realty Trust (DLR)

Another former recommendation of ours, DLR fell on hard times beginning in late 2012, when it began a string of missed earnings reports. As a data center REIT, a lot of “hot” money (momentum traders) poured out of the stock as a result. Then came the Fed hinting at a taper in mid-2013, which negatively impacted all REITs, hitting DLR especially hard. With those headwinds behind it, DLR bottomed in late 2013 and has been rising ever since. We love this REIT’s business of operating data centers, the demand for which is projected to increase substantially in coming years. The company is reasonably valued at current levels, and with a 6.2% yield, DLR is once again our top pick in the REIT sector.

6. Kraft Foods (KRFT)

We liked Kraft (then known as KFT) before it split its domestic and international operations in 2013, so it’s only natural we like KRFT as well. With a solid 3.7% yield and tons of valuable packaged food brands under its umbrella, KRFT is a great name to sock away for years to come.

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Best Dividend Stocks List

7. Lockheed Martin (LMT)

Although Lockheed is known for its defense contracting, it’s actually quite a bit more diversified than many people realize. The company is also very well managed and has tripled its dividend payout since 2007. Its share price has also more than doubled since we began recommending it, so look for pullbacks to add shares.

8. Altria (MO)

Growth in the domestic tobacco sector is a thing of the past, but with a yield approaching 5%, income investors have a friend in this stable dividend stalwart. And should the economy turn south again, this name would likely once again become a must-own.

9. Pfizer (PFE)

Another great large-cap pharma play, Pfizer’s dividend raises over the past couple of years have kept pace with its share price gains, maintaining its yield well over the 3% line. The company’s diversified structure also makes it a potential break-up candidate in coming years.

10. Procter & Gamble (PG)

As long as its yield is above 3%, P&G makes a solid long-term buy. The company boasts 57 consecutive years of dividend increases (the fifth longest streak of any U.S. dividend stock), and as a consumer products staple, at least one of its products can be found in nearly every American home.

11. AT&T (T)

With a 5.2% yield, AT&T offers by far the best income opportunity of any Dow 30 component. The company also recently raised its dividend for the 30th straight year. Growth potential is limited outside of major acquisitions, which will always face regulatory approval issues (see: failed attempt to buy T-Mobile), but the company is well managed and is incredibly shareholder-focused.

12. TD Bank (TD)

Now more than five years removed from the financial crisis, many bank stocks are still pretty risky. That doesn’t apply to TD, however. The Canadian banking giant continues to reap rewards from its Commerce Bank acquisition several years ago, which gave it an instant foothold in the U.S. market.

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Best Dividend Stocks List

13. Verizon (VZ)

Like chief competitor AT&T, Verizon’s main draw is its massive dividend yield, which currently sits around 4.5%. We like the wireless space the company operates in, and its continued growth in the TV/Internet market promises to keep this company near the top of the communications space for several decades to come.

Additional NotesThe stocks in the list above are considered “Buys” at current price/yield levels. When we remove a name from the list, it is almost never a “Sell” call – it simply means we no longer advocate putting new money into the name (essentially a “Hold” call).

To view the current version of this list, please see our Best Dividend Stocks page.