Last week was a great week to be a dividend investor. Not only did two of my top stocks declare fresh dividends, but both companies also raised those payouts. The ability to enjoy a rising dividend is one reason why I much prefer the income from my dividend stocks than the fixed rate I could be earning on a bond.
But not all dividend-paying stocks are equal. Some companies pay unsustainably high dividends, which is why it is important to double check the company's ability to actually pay its dividend, even if a raise would suggest investors have nothing to fear. With that in mind, let's drill down a bit deeper into the two companies that just gave me a raise.
A gushing of income growth
Oil and gas production company, ConocoPhillips (NYSE: COP ) , announced that it was providing investors with a 4.5% raise this week. The company's CEO, Ryan Lance, pointed out that "[a] compelling dividend is a key part of our offering to shareholders and this increase is aligned with our commitment to target consistent dividend growth over time." This is actually the first raise investors have seen in a while because the company has been in the process of a major three-year repositioning program in which it shed billions of dollars in assets, including its refining arm Phillips 66 (NYSE: PSX ) .
Top 10 Gold Companies To Watch In Right Now: Littelfuse Inc.(LFUS)
Littelfuse, Inc. designs, manufactures, and sells circuit protection devices for use in the automotive, electronic, and electrical markets in the Americas, Europe, and the Asia-Pacific. The company offers electronic circuit protection products, such as fuses and protectors, positive temperature coefficient resettable fuses, varistors, polymer electrostatic discharge suppressors, discrete transient voltage suppression diodes, TVS diode arrays and protection thyristors, gas discharge tubes, and power switching components, as well as fuseholders, blocks, and related accessories under PICO II, and NANO2 SMF, TECCOR, SIDACtor, and Battrax brand names. It offers its electronic circuit protection products for use in wireless telephones, consumer electronics, computers, modems, telecommunications equipment, telephones, data transmission lines, and alarm systems. The company also provides automotive fuses that are used in automobiles, trucks, buses, and off-road equipment to protec t electrical circuits and the wires that supply electrical power to operate lights, heating, air conditioning, radios, windows, and other controls, as well as offers fuses for the protection of electric and hybrid vehicles. It markets its automotive fuse products under ATO, MINI, MAXI, MIDI, MEGA, MasterFuse, JCASE, and CablePro brand names. In addition, Littelfuse manufactures various low-voltage and medium-voltage circuit protection products, such as power fuses that are used in the protection from over-load and short-circuit currents in motor branch circuits, heating and cooling systems, control systems, lighting circuits, and electrical distribution networks to electrical distributors and their customers in the construction, original equipment manufacturers, and industrial maintenance and repair and operating supplies markets. Littelfuse sells its products through direct sales force and manufacturers? representatives. The company was founded in 1927 and is headquartered in Chicago, Illinois.
Advisors' Opinion:- [By Rich Smith]
Littelfuse (NASDAQ: LFUS ) has signed an agreement to acquire Key Safety Systems' Hamlin subsidiary for $145 million in cash, Littelfuse announced Monday.
Top High Dividend Companies For 2014: Sonic Corp.(SONC)
Sonic Corp. operates and franchises a chain of quick-service drive-in restaurants in the United States. As of October 03, 2011, the company operated and franchised approximately 3,500 drive-ins. It also leases signs and real estate. The company was founded in 1953 and is headquartered in Oklahoma City, Oklahoma.
Advisors' Opinion:- [By Wallace Witkowski]
Sonic Corp. (SONC) �shares rose 3.4% to $19.90 on moderate volume. The company reported adjusted earnings of 13 cents a share on revenue of $126.7 million. Analysts surveyed by FactSet expected a consensus of 13 cents a share on revenue of $127.4 million. The drive-in chain also forecast full-year earnings to rise about 14% to 15%, or about in-line with the analyst consensus of 83 cents a share.
Top High Dividend Companies For 2014: National Bank Holdings Corp (NBHC)
National Bank Holdings Corporation (NBH), incorporated in June 2009, is a bank holding company. Through Bank Midwest, N.A. (Bank Midwest), NBH�� primary business is to offer a range of traditional banking products and financial services to both its commercial and consumer customers, located in Kansas, Missouri and Colorado. The Company offers an array of lending products to cater to the customers��needs, including, but not limited to, small business loans, equipment loans, term loans, asset-backed loans, letters of credit, commercial lines of credit, residential mortgage loans, home equity and consumer loans. It also offers traditional depository products, including commercial and consumer checking accounts, non-interest-bearing demand accounts, money market deposit accounts, savings accounts and time deposit accounts and cash management services. As of December 31, 2011, it operated a network of 103 full-service banking centers, with the majority of those banking centers located in the Kansas City region and Colorado. On October 21, 2011, the Company acquired selected assets and assumed selected liabilities of Community Banks of Colorado, a state chartered bank based in Greenwood Village, Colorado, from the FDIC, which included 36 full-service banking centers in Colorado and four in California.
Lending Activities
NBH�� loan portfolio includes commercial and industrial loans, consumer loans, commercial real estate loans, residential real estate loans and agricultural loans. As of December 31, 2011, approximately 61.5% of the Company�� total portfolio was variable rate loans, approximately 38.5% of the total loan portfolio was fixed rate loans and less than 1.6% of its total loan portfolio was unsecured. As of December 31, 2011, of the loans it had originated, approximately 35.1% were variable rate loans and approximately 64.9% were fixed rate loans.
The Company originates commercial and industrial loans and leases, including working capital loans, equi! pment loans and other commercial loans and leases. As of December 31, 2011, approximately 98.2% of its commercial and industrial loans were secured. As of December 31, 2011, it had $372.0 million in commercial and industrial loans and leases outstanding, comprising approximately 16.3% of its total loan portfolio. During the year ended December 31, 2011, it originated and closed $26.7 million of commercial and industrial loans, which was approximately 18.8% of total loans originated for portfolio investment during that period.
The Company offers a range of consumer loans, including loans to banking center customers for consumer and business purposes, to meet customer demand and to increase the yield on its loan portfolio. As of December 31, 2011, it had $74.3 million in consumer loans outstanding, comprising 3.3% of its total loan portfolio. Its real estate loans consist of commercial real estate loans and residential real estate loans. Commercial real estate loans (CRE) loans, consist of loans to finance the purchase of commercial real estate, loans to finance inventory and working capital that are secured by commercial real estate and construction and development loans. Its CRE loans include loans on 1-4 family construction properties, commercial properties such as office buildings, strip malls, or free standing commercial properties, multi-family and investor properties and raw land development loans.
Residential real estate loans consist of loans secured by the primary or secondary residence of the borrower. These loans consist of closed loans, which are typically amortizing over a 10 to 30 year term. It also offers open-ended home equity loans, which loans are secured by secondary financing on residential real estate. As of December 31, 2011, it had a total of $522.4 million in outstanding residential real estate loans, comprising 22.9% of its total loan portfolio. Agricultural loans consist of loans to farmers and other agricultural businesses to finance agricultural produ! ction.
Source of Fund
NBH�� offers a range of deposit products to the customers, including checking accounts, savings accounts, money market accounts and other deposit accounts, including fixed-rate, fixed maturity retail time deposits ranging in terms from 30 days to five years, individual retirement accounts, and non-retail time deposits consisting of jumbo certificates greater than or equal to $100,000. As of December 31, 2011, the Company�� deposit portfolio was comprised of 13.4% non-interest bearing deposits and 55.0% time deposits. Its deposits are primarily obtained from areas surrounding its banking centers.
Financial Products and Services
In addition to traditional banking activities, the Company provides other financial services to the customers. It includes Internet banking, wire transfers, automated clearing house services, electronic bill payment, lock box services, remote deposit capture services, courier services, merchant processing services, cash vault, controlled disbursements, positive pay and cash management services (including account reconciliation, collections and sweep accounts).
The Company competes with UMB, Commerce, US Bank, Bank of America, Valley View, Capitol Federal, Central Bancompany, CCB Financial Corp, Enterprise Financial Services Corp, Wells Fargo, FirstBank, JPMorgan Chase, U.S. Bank, Bank of the West, KeyBank, Alpine Bank, Compass Bank, Vectra Bank, First National Bank of Colorado and Zions Bank.
Advisors' Opinion:- [By Shauna O'Brien]
On Tuesday, Goldman Sachs reported that it has downgraded National Bank Holdings Corp (NBHC) to “Sell.”
The firm has cut its rating on NBHC from “Neutral” to “Sell,” and has given the company a $21 price target. This price target suggests that the stock will remain flat at its current price of $20.94.
An analyst from the firm commented: “While we believe that NBHC can grow EPS longer term as it leverages its $400mn of excess capital (above 10% tier 1 leverage), with shares trading at 1.1x TBV, we see limited upside in the near-term without any strategic M&A.”
Looking ahead, the firm has maintained its FY2013 EPS estimate of 26 cents. For FY2014 and FY2015, estimates have been maintained at 57 cents and $1.88.
National Bank Holdings shares were mostly flat during pre-market trading Tuesday. The stock is up 10% YTD.
Top High Dividend Companies For 2014: ALJ Regional Holdings Inc (ALJJ)
ALJ Regional Holdings, Inc. (ALJ), incorporated on June 22, 1999, operates through its majority-owned subsidiary, KES Acquisition Company (KES), which owns and operates a steel mini-mill near Ashland, Kentucky (the Mill). As a mini-mill producer of bar flats, the Company recycles steel from scrap, a process designed to result in lower production costs than those of integrated steel mills, which produce steel by processing iron ore and other raw materials in blast furnaces. Bar flats are produced to a variety of specifications and fall primarily into two general quality levels: merchant bar quality steel bar flats (MBQ Bar Flats) for generic types of applications, and special bar quality steel bar flats (SBQ Bar Flats), where more precise customer specifications require the use of various alloys, customized equipment and special production procedures. In October 2013, ALJ Regional Holdings, Inc. announced that it has acquired Faneuil, Inc. Effective April 16, 2014, ALJ Regional Holdings Inc acquired Floors-N-More LLC.
The Mill manufactures over 2,600 different bar flat items, which are sold to volume niche markets, including original equipment manufacturers (OEMs), cold drawn bar converters, steel service centers and the leaf-spring suspension market for light and heavy-duty trucks, mini-vans and utility vehicles. The Mill was specifically designed to manufacture wider and thicker bar flats, up to three inches in thickness and 12 inches in width, that are required by these markets. In addition, the Mill employs a variety of specially designed equipment, which is necessary to manufacture SBQ Bar Flats to the specifications of the Mill�� customers. Pursuant to a Management Services Agreement (the Management Agreement) with Pinnacle Steel, LLC (Pinnacle), the operations of the Mill are managed by Pinnacle.
The Mill recycles steel by melting steel scrap in a 50-ton electric arc furnace. The molten steel is then taken to the ladle metallurgy facility where a variety of alloys are! added to make different grades of steel in accordance with customer specifications. The refined molten steel is then poured into a continuous caster to produce continuous strands of steel with cross-sectional dimensions ranging from approximately 20 to 72 square inches. The Mill can utilize up to four continuous strands in producing certain sizes. The strands are cut to produce billets of specified length which are reheated to approximately 2,300 degrees Fahrenheit and fed through a series of roll stands to reduce their size and form them into steel bar sections. These sections emerge from the rolling mill, are uniformly cooled on a cooling bed, and are cut to lengths specified by the customer. The cut bar flats are stacked into bundles ready for shipment.
The production capacity of the Mill for finished products is approximately 200,000 short-tons per year. During the fiscal year ended September 30, 2009 (fiscal 2009), the Mill had production capacity of 200,000 tons and sold 125,866 tons of finished goods, or 63% of its rolling capacity. ALJ transports its products by common carrier, generally shipping by truck and by rail. The Mill has railroad sidings at its facilities.
The Company competes with Nucor Corporation, Gerdau Ameristeel, Gautier Steel, Steel Dynamics and Mittal Steel.
Advisors' Opinion:- [By cody56]
The performance for the third quarter was driven the the partnerships largest holdings ALJ Regional Holdings (ALJJ) and Bank of America (BAC). In the letter the partnership discusses its belief that its holdings have a high probability of outperformance.
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