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World’s best dividend-paying stocks
22
Jun
World’s best dividend-paying stocks

 

We continue our series of reviews on reliable dividend stocks. Long-term investors seek dividend stocks as a source of passive, non-speculative income. But it is vitally important to find a balance between the size of the dividend and the investment’s overall risk level. That’s why we are looking for companies whose dividends are not only high but consistently paid over the years and also secured by stable profits.

Our reviews are usually limited to a single country or region but this time it’s a list of the best companies from all over the world. And this time the selection criteria are way more strict. To make the list, a company must satisfy the following conditions.

Stable dividend, paid at least for 10 years. Usually in the regional ratings, companies that repeatedly paid out dividends over seven years were included. But the difference between seven and 10 years can be critical: Nine years ago, the world experienced the Global Financial Crisis. If the company kept up its dividends payments through that it should be considered particularly reliable.

The dividend does not exceed the company’s profits. In other words, the company’s P/E multiplied by the dividend payout ratio does not exceed 100 percent.

A P/E ratio of at least 3. That means the company is not extremely undervalued. This is an additional requirement, which we did not use in the regional rankings.

A market cap of at least $150 million. 

If the company’s shares fell over the year, the slide was not more than 60 percent.

As a result, we’ve got a selection of some very interesting companies with high investment attractiveness. Not only do all of them pay very high dividend yields (10-11 percent), but their P/E ratios are also quite low (3-8), so they are unlikely to face a significant drop in share price.

Note that although we had compared companies from dozens of countries, most of the record holders appeared to be from North America, i.e. Canada and the United States. The only exception is one Hong Kong company.

The review is based on finance.google.com data. The stock charts use the currencies of the respective exchanges. The companies’ earnings and turnover are shown in US dollars. The percentage changes in stock prices are shown both in the trading currencies and in US dollars. The $ symbol stands for the US dollar only.

1. TICC Capital

TICC Capital office building

— Symbol: TICC

— Exchange: NASDAQ

— Country: USA

— Currency: USD

— Market cap: $356 million

— Annual turnover: $69 million

— P/E: 3.1

— Dividend yield: 11.4 percent

— Payout ratio: 35 percent

— Consecutive years of dividend payment: >13

— Share price change YoY: +29 percent

Description. An investment company primarily involved in corporate debt securities, both independently and with other financial organizations.

 

Chart. The company’s shares were relatively high in 2012–2013, but then in 2014–2015 they halved, and are now climbing slowly back up again. The company pays dividend quarterly, with a very stable yield that almost seems to operate independently of the share price. Only in 2016, when its shares dipped to a record low, did TICC halt dividend payments. However, the the usual schedule was quickly renewed.

Pros. Huge and stable dividends, reasonable dividend payout ratio, biggest five-year profit growth and lowest P/E in this review, overall positive trend.

Cons. No significant disadvantages were found.

2. Dividend 15 Split

Bank of Canada

— Symbol: DFN

— Exchange: Toronto Stock Exchange

— Country: Canada

— Currency: CAD

— Market cap: $296 million

— Annual turnover: $60 million

— P/E: 6.2

— Dividend yield: 10.8 percent

— Payout ratio: 67 percent

— Consecutive years of dividend payment: >13

— Share price change YoY: +8 percent

Description. A fund that invests in 15 high dividend Canadian stocks. At the moment its portfolio includes, several large banks such as Bank of Montreal and National Bank of Canada, the world’s largest international multimedia news agency Thomson Reuters, and Telus, Canada’s second-largest telecommunications firm. The fund is managed by Quadravest Capital Management..

Chart. The fund’s shares have remarkably low volatility: Since 2013 its price fluctuations, with rare exceptions, have not exceeded 10–12 CAD. The company pays an annual dividend of $1.20 a share monthly.

Pros. Huge and extremely stable dividends, low P/E, stable share price.

Cons. No significant cons were found.

3. Tomson Group Ltd

One Penha Hill — properties in Tomson’s portfolio

— Symbol: 0258

— Exchange: Hong Kong Stock Exchange

— Country: Hong Kong

— Currency: HKD

— Market cap: $908M

— Annual turnover: $527M

— P/E: 7.9

— Dividend yield: 10.5%

— Payout ratio: 83%

— Consecutive years of dividend payment: 10

— Share price change YoY: +113%

Description. An investment company focused on real estate and other large properties, as well as on entertainment industry. The company engages in film distribution and exhibition, concert organization, and golf clubs management. The company also owns a factory making consumer products of PVC, including toys and other leisure items).

Chart. The company’s shares has seen rapid growth in 2012–2013, hitting an all-time high recently. The company pays yearly dividend. The yield depends on the stock prices, but is consistently high, and the company increase its dividend almost every year.

Pros. Huge dividends, Positive share price and dividends trends.

Cons. No significant cons have been found.

4. Guggenheim Strategic Opportunities Fund

Guggenheim office

— Symbol: GOF

— Exchange: New York Stock Exchange

— Country: USA

— Currency: USD

— Market cap: $391 million

— Annual turnover: $32 million

— P/E: 7.6

— Dividend yield: 10.4 percent

— Payout ratio: 78 percent

— Consecutive years of dividend payment: >9

— Share price change YoY: +18 percent

Description. An investment fund focused mainly on fixed income securities: income funds, corporate and government bonds, preferred shares, etc. The fund also diversifies risks by investing in ordinary shares. The fund is managed by the renowned investment agency Guggenheim.

Chart. The fund’s share price hit an all-time high in 2013 but in 2015 lost almost half its value, before bouncing bouncing back in 2016. The company pays an extremely stable annual dividend of $2.16 monthly.

Pros. Huge and extremely stable dividends, low P/E, good share price trend in 2016.

Cons. Two-fold five-year profit decline.

5. Canoe EIT Income Fund

Canoe’s IPO on the Toronto Stock Exchange

— Symbol: EIT.UN

— Exchange: Toronto Stock Exchange

— Country: Canada

— Currency: CAD

— Market cap: $817M

— Annual turnover: $169M

— P/E: 5.8

— Dividend yield: 10.0%

— Payout ratio: 58%

— Consecutive years of dividend payment: >18

— Share price change YoY: +13%

Description. An income fund, focused on providing investors with a stable and high dividend income. The fund invests in real estate, securities and other assets from many countries and industries to minimize risks and fluctuations in profits. The fund’s portfolio includes assets from such industries as telecommunications, energy, medicine, retail and others.

Chart. The fund’s shares are highly stable and traded in the range of 10-12.5 Canadian dollars. The dividends are paid monthly, providing investors with steady yield of $1.2 apiece each year.

Pros. High and stable dividends with good payout ratio and long history of dividend payment, low P/E.

Cons. No significant cons have been found.

6. Annaly Capital Management

Annaly's IPO

— Symbol: NLY

— Exchange: New York Stock Exchange

— Country: USA

— Currency: USD

— Market cap: $12 billion

— Annual turnover: $2.3 billion

— P/E: 4.8

— Dividend yield: 9.6 percent

— Payout ratio: 47 percent

— Consecutive years of dividend payment: >19

— Share price change YoY: +18 percent

Description. An investment company focused on securities and derivatives related to mortgage lending. The company invests both in residential and commercial real estate.

Chart. The company's shares were relatively high in 2011, but almost halved by the end of 2013. In 2014—2016, the stock price of the company fluctuated around $10, but now are heading up north.  The company pays dividends quarterly. The dividend yield depends on the share price but has been relatively high.

Pros. Stable profits and good dividends with longest dividend payment history of all the companies reviewed, low P/E.

Cons. No significant cons were found.

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