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World’s best dividend-paying stocks

World’s best dividend-paying stocks

We are looking for companies whose dividends are not only high, but also consistent with profits and are steadily paid over the years. 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 dividend and the investment’s overall risk level. Here we come to help you.

Usually our reviews are limited to a single country or region, but this time it’s a summary list of the best companies from all over the world, and the selection criteria are way more strict. To make the list, a company must meet the following conditions:

— The dividend is steadily paid at least for the last 10 years. Usually the threshold in our reviews is 7 consecutive years of dividend payment. But the difference between 7 and 10 years may be critical: ten years ago the world experienced the financial crisis of 2008, and if the company continued to pay dividends over the period, it can be considered particularly reliable.

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

The company has 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 regional rankings. That also means that companies with dividend yield above 33.3% are excluded from consideration, but such companies are in any case extremely rare.

— The company has a market cap of at least $150M.

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

As a result, we’ve got a selection of really interesting companies with high investment attractiveness. Not only all of them have very high dividend yields (10–17%), but their P/E ratios are also quite low (3–8), so they are unlikely to face a significant drop in share prices.

Despite the sample being really international (data on dozens of countries have been used), most of the companies that made it to the list turned out to be from the US. There are also companies from Canada and Hong Kong, one in each country. Most companies have already been featured in our reviews, which indicates their stable performance..

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. BP Prudhoe Bay Royalty Trust

An industrial landscape of the BP’s Alaskan branch

 Symbol: BPT

— Exchange: New York Stock Exchange (NYSE)

 Country: USA

 Currency: USD

 Market cap: $442M

— Annual turnover: $45M

 P/E ratio: 5.7

— Dividend yield: 17.3%

 Payout ratio: 99%

 Consecutive years of dividend payment: 29

— Share price change YoY: −6%

Description. An US royalty fund providing oil and gas services. The trust receives a percentage royalty of the average daily production of oil from BP’s working interests in the Prudhoe Bay Field on the North Slope of Alaska. The trust started operation in 1989 and pays annual dividends ever since, which is the absolute record among companies in this review.

Chart. Since 2012, the company’s shares demonstrate a negative trend. However, However, technical analysis suggests that the bottom actually was hit as early as 2016. The company pays dividends 4 times a year. Their size decreased as the share price fell, but it still remains impressive.

Pros. Highest dividends in this review with the longest record of consecutive payment, low P/E ratio.

Cons. Worst payout ratio in this review (still quite decent considering the dividend size).

2. Tomson Group Ltd

One of the Tomson’s properties

 Symbol: 0258

 Exchange: Hong Kong Stock Exchange

 Country: Hong Kong

 Currency: HKD

 Market cap: $806 M

 Annual turnover: $526M

— P/E ratio: 5.0

 Dividend yield: 12.9%

 Payout ratio: 65%

 Consecutive years of dividend payment: 10

 Share price change YoY: +30%

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. In 2016-2017, the stock experienced a twofold price increase, setting a new historical maximum. Then it has rolled back a bit but still remains higher than in previous years. 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 dividend trend, low P/E ratio.

Cons. No significant disadvantages were found.

3. TICC Capital

TICC Capital office

 Symbol: TICC

 Exchange: NASDAQ

 Country: USA

 Currency: USD

— Market cap: $318M

 Annual turnover: $69M

 P/E ratio: 5.9

 Dividend yield: 12.6%

 Payout ratio: 74%

 Consecutive years of dividend payment: 14

— Share price change YoY: −7%

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

Chart. The company’s shares were relatively high in 2012–2013, but then in 2014–2015 they halved, and now are climbing back again slowly. The company pays dividend quarterly. The dividend yield used to be very stable, but was somewhat lowered in 2017. However, given the share price, the dividends remain huge.

Pros. Huge and stable dividends, low P/E ratio.

Cons. No significant disadvantages were found.

4. Alliance Holdings GP (LP), Alliance Resource Partners (LP)

Alliance’s workers

 Symbols: AHGP, ARLP

 Exchange: NASDAQ

— Country: USA

— Currency: USD

— Market cap: $1.5B, $2.4B

— Annual turnover: $1.9B, $1.9B

— P/E ratio: 7.4, 4.7

— Dividend yield: 12.0%, 11.1%

— Payout ratio: 89%, 52%

— Consecutive years of dividend payment: 12, 18

— Share price change YoY: −18%, −24%

Description. Two limited partnerships operating as parts of Alliance Resource family of companies (est. 1971). The companies produce mostly steam coal. It’s common for mining and energy enterprises to have a complex structure, where industrial businesses, management companies and investment partnerships are present as separate entities. All of them are traded as separate companies. It’s also common for limited partnerships to pay steady dividends but show high volatility in terms of stock prices. However, their success depends mostly on the whole family, or even the entire industry.

Chart (AHGP, similar for ALRP). Alliance Holdings shares saw an all-time high in 2014, followed by a dramatic decline caused by the crisis in the mining industry in general. In 2016, the crisis eased, and the company’s shares rose again. The company’s dividends depend on the share price, although until early 2016 they remained very high. Then the dividends declined, but rolled back as early as 2017.

Pros. Large size, huge and stable dividends with a great record of consecutive payment (especially for ARLP), low P/E ratio.

Cons. Overall hazy prospects of coal industry.

5. Dividend 15 Split

Bank of Montreal

— Symbol: DFN

— Exchange: Toronto Stock Exchange

— Country: Canada

— Currency: CAD

— Market cap: $331M

— Annual turnover: $61M

— P/E ratio: 7.6

— Dividend yield: 11.1%

— Payout ratio: 85%

— Consecutive years of dividend payment: 14

— Share price change YoY: +1%

Description. A fund that invests in 15 high dividend Canadian stocks. At the moment its portfolio includes, among others, 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, do not exceed the range of 10–12 CAD. The company pays an annual dividend of $1.20 a share monthly.

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

Cons. No significant cons were found.

6. Chimera Investment

Statue pictured on Chimera Investment’s logo

— Symbol: CIM

— Exchange: NYSE

— Country: USA

— Currency: USD

— Market cap: $3.5B

— Annual turnover: $952M

— P/E ratio: 5.8

— Dividend yield: 10.7%

— Payout ratio: 62%

— Consecutive years of dividend payment: 10

— Share price change YoY: +11%

Description. A major investor in real estate. The сompany invests both in real estate development and in real estate-related securities.

Chart. In 2013–2016, the stock was traded between $14 and $17, but in 2017 the price has increased significantly. The company pays dividends 4 times a year. The dividends are quite stable at about $2 per share.

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

Cons. No significant disadvantages were found.

7. AGNC Investment

AGNC is the real estate investor

— Symbol: AGNC

— Exchange: NASDAQ

— Country: USA

— Currency: USD

— Market cap: $8.0B

— Annual turnover: $1.1B

— P/E ratio: 5.0

— Dividend yield: 10.6%

— Payout ratio: 53%

— Consecutive years of dividend payment: 10

— Share price change YoY: +14%

Description. A major real estate investor. The company invests in both purely commercial and state-subsidized mortgage-backed securities on a leveraged basis.

Chart. The company’s shares are quite stable: even in 2015 they sank only a third. By mid-2017, they mostly rolled back and now fluctuate in the range of $20–22. Since the end of 2014, the company pays dividends monthly. Their size has since declined slightly, but is still very high relative to the share price.

Pros. Huge dividends, excellent payout ratio, low P/E ratio, large company size.

Cons. No significant disadvantages were found.

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