We've just sorted through over 1300 dividend paying stocks that have a high dividend yield. We work to identify stocks with high yield, high dividend growth, income growth, low payout ratios and solid returns. We base our DSO rating on these dividend fundamentals. Six stocks that stood out from the rest to receive our top rating.
Each of these stocks has a dividend yield over 3%, a 5 year dividend growth rate over 5%, a 3 year net income growth rate over 10%, a payout ratio under 62% and a one year return over 10%. We added positions of JNJ and RPM to our portfolio this month. Each of these two stocks has raised their dividend for more than 35 consecutive years.
Sunoco Logistics Partners (SXL)
DSO Rating: 100/100
SXL is a limited partnership. They have been raising their dividend every quarter of each year since 2007 and currently have a dividend yield of 4.3%. Their 5 year dividend growth rate is 12% and their stock has risen over 29% in the last 12 months.
Sunoco Logistics Partners transports and sells crude oil in 17 states. They own and operate a diverse set of crude oil assets including pipelines. Please understand the tax implications of a limited partnership before investing.
Eli Lilly (LLY)
DSO Rating: 97/100
LLY has a dividend yield of 4.93. Their 5 year dividend growth rate is 5.22 however they have not raised their dividend since 2009 which keeps them from having a perfect 100 point score on our scale. Their payout ratio is 46% and their stock has risen over 13% in the last 12 months. They have an upcoming ex-dividend date of February 13th.
Eli Lilly manufactures and sells pharmaceutical products. Their products are sold in 125 different countries. They also have an animal health business unit that acquired rights to several Pfizer animal health products in 2010.
Alliance Resources Partners (ARLP)
DSO Rating: 100/100
ARLP has raised their dividend distribution every quarter of each year since April of 2007 and has increased their dividend for 9 consecutive years. They currently have a dividend yield of 4.6% and a 5 year dividend growth rate of 13.6%. Their next ex-dividend date is February 3rd, 2012. ARLP has risen by 10.3% over the last 12 months.
Alliance Resource Partners is a limited partnership that produces coal for US utility and industrial companies. They operate many underground mining sites in the mid west and east cost.
Avista Corp (AVA)
DSO Rating: 100/100
AVA has been paying dividends since 1899 and has raised their dividend for each of the last 9 years. They have a dividend yield of 4.3% and a 5 year dividend growth rate of 14.2%. Their payout ratio is 62% and their stock has risen 11.5% over the last 12 months.
Avista Corporation generates, transmits and distributes electricity and natural gas. They also operate Advantage IQ which provides energy management systems to help manage expenses for utility and telecom services.
RPM International (RPM)
DSO Rating: 100/100
RPM has been paying dividend since 1969 and has raised its dividend for 38 consecutive years. They have a dividend yield of 3.4% and a 5 year dividend growth rate of 5.8%. RPM as an investment has returned over 10% to investors in the last 12 months. Their payout ratio is 54%.
RPM International manufactures and sells specialty chemical products. Their products include paints, protective coatings, roofing products and sealants and are sold in over 150 countries.
Johnson & Johnson (JNJ)
DSO Rating: 100/100
JNJ is about to cross an amazing threshold of 50 years with consecutive dividend increases. Pretty amazing and it's one of the many reasons why I recently added to my JNJ position. They also have a dividend yield of 3.4% and a 5 year dividend growth rate of 9.1%. They have a payout ratio of 55% which all make for very solid dividend fundamentals.
Johnson and Johnson manufactures and sells healthcare products through its more than 250 companies. They are split into three different business units: Medical devices, Pharmaceutical and Consumer. JNJ is the top rated stock on our safe dividend list.
Disclosure: I am long JNJ, RPM.
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