Best Dividend Stocks For 2014
I have adapted many of the findings of James P. O’Shaughnessy’s book,What Works on Wall Street: A Guide to the Best-Performing Investment Strategies of All Time to my own investments. One of these strategies includes, at the end of each calendar year, using screens derived from the two best performing strategies in O’Shaughnessy’s book to find potential value and growth opportunities for the year ahead.
For those who have not read What Works on Wall Street: A Guide to the Best-Performing Investment Strategies of All Time, O’Shaughnessy used a systematic, fundamental approach, compiling 45 years of S&P Compustat market data to research the performance of many different long term investment strategies. As expected, he concluded that some produced significantly greater returns than the S&P 500 while others produced less.
The two top performing strategies in his book, as mentioned, are O’Shaughnessy’s Cornerstone Growth and Cornerstone Value strategies. In his research, these two strategies yielded the strongest and most consistent long term returns and, since the publications of his book, have continually been used by investment firms, mutual funds, and portfolio managers.
As O’Shaughnessy found that December is the best month to rebalance a long term portfolio, I have adapted these strategies for use as a starting point for finding potential growth and value in the coming year.
Beginning with value stocks, below are ten dividend stocks worth considering for your 2014 portfolio.
Best Dividend Stocks For 2014: Torch Energy Royalty Trust(TRU)
Torch Energy Royalty Trust, a grantor trust, holds net profits interests, to receive payments from the working interest owners. Its working interest owners include Torch Royalty Company, Torch E&P Company, Samson Lone Star Limited Partnership, and Constellation Energy Partners LLC. The trust is entitled to receive 95% of the net proceeds attributable to oil and natural gas produced and sold from wells on the underlying properties, including Chalkley Field in Louisiana; the Robinson?s Bend Field in the Black Warrior Basin in Alabama; Cotton Valley Fields in Texas; and Austin Chalk Fields in central Texas. Torch Energy Royalty Trust was founded in 1993 and is based in Wilmington, Delaware.
Best Dividend Stocks For 2014: McDonald’s Corporation(MCD)
McDonald?s Corporation, together with its subsidiaries, operates as a worldwide foodservice retailer. It franchises and operates McDonald?s restaurants that offer various food items, soft drinks, coffee, and other beverages. As of December 31, 2009, the company operated 32,478 restaurants in 117 countries, of which 26,216 were operated by franchisees; and 6,262 were operated by the company. McDonald?s Corporation was founded in 1948 and is based in Oak Brook, Illinois.
- [By Quickel]McDonald’s, is just such a solid stock with the combination of growth, safety and income. We believe that MCD should be headed to $110 this year, which will not be as strong as some of our other targets. Yet, we also will be picking up a solid 2.8% yield that is attractive. Further, MCD has done a great job dealing with currency issues and has not seen a slowdown despite issues in Europe and China. We believe that MCD will continue to offer growth and value this year, and we like it to offset value and growth plays with income investing.
Target: $105, $110
Best Dividend Stocks For 2014: John Bean Technologies Corporation (JBT)
John Bean Technologies Corporation provides technology solutions for the food processing and air transportation industries in the United States and internationally. It operates in two segments, JBT FoodTech and JBT AeroTech. The JBT FoodTech segment offers industrial food processing solutions and services used in the food processing industry. Its product offerings include freezer solutions for the freezing and chilling of meat, seafood, poultry, ready-to-eat meals, fruits, vegetables, and bakery products; protein processing solutions that portion, coat, and cook poultry, meat, seafood, vegetable, and bakery products; in-container processing solutions for fruits, vegetables, soups, sauces, dairy, and pet food products, as well as ready-to-eat meals in various packages; and fruit processing solutions that extract, concentrate, and aseptically process citrus, tomato, and other fruits. This segment markets its solutions and services to multi-national and regional industrial fo od processing companies. The JBT AeroTech segment provides ground support equipment for cargo loading, aircraft deicing, and aircraft towing; gate equipment for passenger boarding, and on the ground aircraft power and cooling; airport services for the maintenance of airport equipment, systems, and facilities; military equipment for cargo loading, aircraft towing, and on the ground aircraft cooling; and automatic guided vehicles for material handling in the automotive, printing, warehouse, and hospital industries. This segment markets its solutions and services to airport authorities, passenger airlines, airfreight and ground handling companies, and military forces. John Bean Technologies Corporation sells and markets its products and services through direct sales force, independent distributors, and sales representatives. The company is based in Chicago, Illinois. John Bean Technologies Corporation operates independently of FMC Technologies, Inc. as of July 31, 2008.
Best Dividend Stocks For 2014: TECO Energy Inc.(TE)
TECO Energy, Inc., an electric and gas utility company, through its subsidiaries, engages in the generation, purchase, transmission, distribution, and sale of electric energy. It provides retail electric service to approximately 672,000 customers in West Central Florida with a net winter system generating capability of 4,684 megawatts. The company also engages in the purchase, distribution, and marketing of natural gas. It serves approximately 336,000 residential, commercial, industrial, and electric power generation customers in Florida. In addition, the company owns mineral rights, owns or operates surface and underground mines, and owns interests in coal processing and loading facilities. TECO Energy, Inc. was founded in 1899 and is headquartered in Tampa, Florida.
Best Dividend Stocks For 2014: S&P GSCI(GD)
General Dynamics Corporation, an aerospace and defense company, provides business aviation; combat vehicles, weapons systems, and munitions; military and commercial shipbuilding; and communications and information technology products and services worldwide. Its Aerospace group designs, manufactures, and outfits various large and mid-cabin business-jet aircraft; provides maintenance, repair work, fixed-based operations, and aircraft management services; and performs aircraft completions for aircraft. The company?s Combat Systems group offers tracked and wheeled military vehicles, weapons systems, and munitions. Its product lines include wheeled combat and tactical vehicles; battle tanks and infantry vehicles; munitions and propellant; rockets and gun systems; and axle and drivetrain components and aftermarket parts. This group also manufactures and supplies engineered axles, suspensions, and brakes for heavy-load vehicles for military and commercial customers. The company Advisors’ Opinion:
- [By Dave Friedman]The shares closed at $62.77, up $1.59, or 2.6%, on the day. They have traded in a 52-week range of $55.46 to $78.27. Volume today was 2,338,444 shares, against a 3-month average volume of 2,440,760 shares. Its market capitalization is $22.71 billion, its trailing P/E is 8.95, its trailing earnings are $7.01 per share, and it pays a dividend of $1.88 per share, for a dividend yield of 3.10%. About the company: General Dynamics Corporation is a diversified defense company. The Company offers a broad portfolio of products and services in business aviation; combat vehicles, weapons systems and munitions; shipbuilding design and construction; and information systems, technologies and services
Best Dividend Stocks For 2014: Smith & Nephew SNATS Inc.(SNN)
Smith & Nephew plc develops, manufactures, markets, and sells medical devices in the orthopaedics, endoscopy, and advanced wound management sectors worldwide. The company operates in three segments: Orthopaedics, Endoscopy, and Advanced Wound Management. The Orthopaedics segment offers reconstruction implants, including hip, knee, and shoulder joints, as well as ancillary products, such as bone cement and mixing systems used in cemented reconstruction joint surgery. This segment also provides trauma fixation products consisting of internal and external devices, and other products, including shoulder fixation and orthobiological materials used in the stabilization of fractures and deformity correction procedures; and clinical therapies products comprising bone growth stimulation, joint fluid therapies, and outpatient spine products. The Endoscopy segment develops and commercializes minimally invasive surgery techniques, educational programs, and value-added services for sur geons to treat and repair soft tissue and articulating joints. It offers specialized devices and fixation systems to repair damaged tissues; fluid management equipment for surgical access; digital cameras, digital image capture, scopes, light sources, and monitors to assist with visualisation; radiofrequency wands, electromechanical and mechanical blades, and hand instruments for resecting damaged tissues. The Advanced Wound Management segment provides initial wound bed preparation and full wound closure products. This segment?s products are targeted at chronic wounds associated with the older population, such as pressure sores and venous leg ulcers; and products for the treatment of wounds, including burns and invasive surgery. The company serves medical and surgical service providers. Smith & Nephew plc was founded in 1856 and is headquartered in London, the United Kingdom.
- [By Pat Racaniello]Smith and Nephew PLC (SNN) is another top pick in the medical devices segment, although this time it’s more focused on the orthopedic, endoscopy and wound management segments of the healthcare industry. The stock presents an excellent bargain with a last traded price of $46.38, near the 52 week low of $41.26, and a price earnings ratio of 13 times, compared to an industry average of nearly 23, near the 5 year price earnings low for both the industry and the company.
Fundamentally, the company is a solid bet with market leading technologies such as Legion/Genesis II surgery management system and the Anthology hip system. It has most recently acquired Tenet Medical Engineering and has some of the best margins in the industry, with the operating margin at 22% and net profit margin at 15%, both well ahead of industry counterparts. The lower than estimated EPS growth for the most recent quarter has made this an excellent buy.
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