Are These 5 Dividend Paying Stocks Really Worth A Look?

Posted on April 15, 2012 by Lee

Many of the best dividend paying stocks featured in news articles every day, but when is the right time to buy them? A recently published article, “5 Dividend Stocks That Are Worth A Look”, written by Jamie Smith, is a good example of one of these articles. The issue I have with many articles like this one is that all the author does is look at a few company fundamentals, but stops short of determining whether or not the dividend paying stocks being written about represent a good value to buy right now.

Here is an excerpt from the article, where you can see a little bit of what the author is looking for in dividend paying stocks:

This company has a good balance sheet and is continuing to pay down debt. In the fuel industry, the dividend is safe and is likely to continue the trend of increasing year over year. In the current environment, crude oil prices and gas prices are more …

As you can see, the article has a quick review of company fundamentals, a mention of the macro environment, and on to the next stock. This is a formula followed by most financial writers, and while they are correct to examine these factors, they need to take the next step, and show their readers when these stocks represent a good historical value, and some of the reasoning around why they are recommending their latest list of dividend paying stocks at whatever price they are quoting.

An easy first level screen for dividend paying stocks is to look at their current dividend yield vs. their historic dividend yield levels. Dividend yields track inversely with stock prices – given the same dividend payout per share, when stock prices are high, dividend yields are low, and when stock prices are low, dividend yields are high. It has been shown that many dividend stock yields tend to move between high and low levels over time, even when companies are raising their dividends. So all things being the same, it is better to buy high quality dividend paying stocks when the dividend yield is high, and the price relative to the dividend payout is low.

Let’s look at the five stocks Jamie Smith highlights in the above article, and see if any of them pass this very simple dividend stock screen. First up is Chevron (CVX). As you can see in the first dividend chart for Chevron, the stock is in the sell zone right now based on it’s dividend yield.

Just for reference the upper band represents 3% annualized dividend yield for Chevron, while the bottom band is at 4.9% dividend yield. As you can see, as the Chevron dividend payout has increased over time, the upper and lower dividend yield bands adjust to the new payout level.

Sometimes a better way to visualize this dividend yield history is to just plot the dividend yield between constant upper and lower bands as shown in this stock dividend yield chart for Chevron:

In this picture you can see only Chevron’s dividend yield plotted, without the price of the stock shown. It is easy to see here that Chevron’s yield is currently too low to consider buying the stock. Based only on this valuation, the right price to buy this stock with the current dividend payout is not the low 100’s as suggested by the author, but actually in the mid-60’s.

The second stock in the article is Eaton (ETN). Here is the dividend yield chart for Eaton Corporation with the buy band set to 3.5% dividend yield, and the sell band targeting 2% dividend yield.

Eaton is actually close to being a buy right now, my target for an initial buy would be around $43.50 at current dividend levels.

Next is General Dynamics (GD). The sell area is 1.5% dividend yield, and the buy level is when General Dynamics dividend yield hits 3.2%.

This is another stock that is close to a level that could be a good value. Right now the price I would use for an initial buy for General Dynamics is around $63.75, about $5 per share lower than where it closed on Friday.

Fourth in the list from the article is Microsoft (MSFT). A couple of things stand out in the dividend yield chart for Microsoft:

First, Microsoft has been trading in a range since 2005, and second, the Microsoft dividend yield has caught up to the stock price, making it a good buy today.

The last stock from the article is Wal-Mart (WMT). While the share prices for Wal-mart have been flat for over a decade, you can see that the dividend yield has been moving up as they regularly increase the dividend payout:

At current prices, Wal-mart is actually yielding 2.7%, well above the 2% buy level I show in this chart. Using this valuation metric for dividend paying stocks, Wal-mart is a buy at today’s prices.

While there are many good ways to value dividend paying stocks, sometimes using a simple screen like dividend yield vs. historic dividend levels is a good place to start filtering out stocks. Remember this as you read financial articles, so you do not make the expensive mistake of buying a stock that is priced too high. What tools or screens do you use to find dividend paying stocks to buy?

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Are All 3 Of These High Dividend Stocks Really Worth A Second Look?

Posted on March 4, 2012 by Lee

High dividend stocks always command attention from investors for a variety of reasons – current income, as a part of a portfolio strategy that looks tries to reduce investment volatility with dividend income, and as a means of compounding returns through reinvestment of dividends, are just a few of these reasons. When looking to add a stock to your investment portfolio that has a higher than market average dividend yield, it is a good idea to understand why the yield is high, and how it compares to historic dividend yields for the same company.

In a recent article, “3 Dividend Stocks Worth A Second Look”, written by Dividendinvestr (a.k.a. Serkan Unal), he writes about three solid high dividend stocks that he believes are a good buy right now. Here is a small excerpt:

It may sound counterintuitive but investors looking for high-dividend yielding stocks may be better off choosing stocks that pay more modest dividends. Point in fact, the two sectors of the S&P 500 that pay the highest yields – utilities and telecoms …

While I like the fundamentals for each of these companies, a closer look reveals that only one of the three meets a very basic criterion to buy it right now.

Let’s first take a look at a popular dividend stock – Southern Company (SO). The author does a good high level review of some of the stocks fundamentals, including pointing out that the annual dividend yield is currently 4.3%. But look at this historical chart of Southern Company’s dividend yield:

It’s easy to see what the recent popularity has done to this stock’s yield – it has been driven down to 4.3%. In fact, the stock’s price is so high relative to the dividend payout, the yield hasn’t been this low in over a decade. It’s better to wait to buy stocks like this when the market doesn’t like them so much, and they represent a good value both in terms of when the entry price is low, and the corresponding dividend yield is high.

The next of the high dividend stocks analyzed in the article is Johnson & Johnson (JNJ). This is also a popular dividend stock – it is run by a top rate management team, and it has been very friendly to investors over time, raising the dividend annually for decades. Here is a historic dividend yield chart for JNJ:

Just by looking at this chart, you can see why Johnson & Johnson belongs on a list of high dividend stocks – it is trading at a price that allows its dividend yield to be in the top of its historic range.

The last stock examined in the article is Philip Morris. This is probably the most popular of the high dividend stocks owned by income investors. Trading in the mid-$80 range right now, this stock yields 3.7% annually. Let’s look at the historic yield for Philip Morris:

It is obvious this stock has become too popular lately, and we need to wait for the price to correct to a lower level, driving up its dividend yield at the same time, before it is the right time to take a second look at this stock.

Looking at historic dividend yields for a company is just one way to evaluate whether or not a stock is currently priced at a level that is a good value. What criteria do you use to evaluate high dividend stocks before you buy them?

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High Dividend Stocks – 5 Cheap Stocks Considered For Purchase

Posted on February 23, 2012 by Lee

Most high dividend stocks investors recognize that finding the right stock, at a low enough price, is the ultimate objective of dividend investing. It is not enough to just have a portfolio filled with solid dividend paying stocks, you have to buy them when they are cheap, relative to their dividend, in order to maximize your potential gains – not just from the increased dividend yield that these stocks will pay out, but also in terms of potential capital gains.

In a recent article published on Motley Fool, Russ Krull highlights 5 fundamentally strong dividend stocks that are considered cheap by his criteria. Since with all things being equal, cheap stock prices mean high dividend stocks as measured by yield, I definitely needed to see more, and investigate whether or not any of these stocks were ready to be added to my portfolio:

The Motley Fool – Results from a screen looking for dividend-paying bargains.

www.fool.com/investing/general/…/cheap-dividend-stocks.asp…

As is normally the case, I like to review high dividend stocks ideas relative to their historic yields. Many times it is easy to see a pattern of high and low yield extremes that make it easier to determine whether a stock is trading at the right price to be considered a “Buy” for your portfolio.

Let’s take a look at some of the stocks from this article, and see how they look vs. their historic yields. First up, 3M (MMM).

As you can see from theis 3M historic dividend yield chart, 3M needs to have a dividend yield around 3% or higher before being at the right price to buy it. Since it is only at 2.7% right now, it doesn’t look like this one is too “cheap”, or put another way, it is not ready to be on a list of high dividend stocks.

Next, here is a dividend chart for AFLAC (AFL):

As you can see from the AFLAC dividend chart, it is also trading below the yield that should be considered the minimum level to consider buying this stock. In fact, the yield needs to go up about 1% from where it is right now before this stock would be cheap enough to add to a portfolio.

Finally, let’s look at Walgreens (WAG). Using the current yield as a measure of value, this is one of the high dividend stocks that should be considered for a portfolio.

The chart above tells the story of Walgreens dividend yield, and makes it easier for an investor to be more certain that they are getting a “cheap” stock to add to their investments.

As you can see from the above charts, only one of the three stocks that we quickly evaluated from Russ Krull’s article met the criteria of being “cheap enough” for us to consider buying.  The rest need to come down in price and/or increase their dividend payouts before they can be counted amongst the high dividend stocks that can be added to our income investments. What are the criteria that you use to find high dividend stocks to buy?

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Are these 5 Utilities With 4% Or Better Yields a good buy?

Posted on February 21, 2012 by Lee

Utility stocks are a favorite amongst dividend investors looking for safe, consistent passive income from their investment portfolio. The good news is that even conservative regulated utilities can be an excellent value, and provide good growth potential, when they are bought at the right price. Purchased at the right price, utilities can be high dividend yield stocks.

In a recent article titled, “5 Utilities with 4% Or Better Yields”, Chuck Carnevale from F.A.S.T. Graphs analyzes 5 utility stocks with nice current yield levels –

Utility stocks have long been coveted by investors seeking above-average yield and stable prices. Currently, many high-quality regulated utilities offer bond-like characteristics, but with yields higher than what is available from the 30-year treasury.

The article is very well written and researched regarding individual company fundamental indicators, but as is often the case, the current value of the stocks being discussed is not really considered when making the recommendations. High dividend yield stocks need to be viewed in the context of their historical dividend yields, as just one of several good measures of a stock’s value. Let’s take a look at some of the stocks in this article, and see if they look like good deals right now.

First, Scana Corporation is shown with a current dividend yield of 4.3%. Historically, Scana Corporation dividends are low (i.e. the price is too high) when the yield is around 4% – see the chart below.

It looks like Scana Corporation (SCG) would be a better buy when the yield is around 6%.

Next, Southern Company (SO) is mentioned in the article. The dividend yield is also currently around 4.3%, which is also in the historically low range for this stock (i.e. does not qualify for a list of high dividend yield stocks).

In this dividend yield chart for Southern Company, you can see that it is better to wait to take a position in this stock until it is yielding 6.5% – 7%.

Dominion Resources (D) is next on the list. In this case the stock is also trading near it’s historical low dividend yield levels.

As you look at this historic yield chart for Dominion Resources, you can easily see that the yield should be over 6% before considering buying this stock.

So far, we are 3 for 3 in liking the analysis of the stocks in the article, but not liking the value of the stocks with the price they are trading at right now. A look at the last utility stock, Consolidated Edison (ED), gives us the same picture.

In this historic Yield chart for Consolidated Edison, it is again easy to see that a yield of around 8% is the place to purchase this stock, not the 4.2% sell area that the stock is currently trading at.

In summation, it is important to do your homework, and understand the fundamentals of companies that you are considering owning. It is also important to understand the value of the stocks you are examinig, so you know when great companies are at the right value to consider buying them. This means if they pay regular dividends, you should look at the historic yield levels as one of the measures of value that you consider before stepping in and buying the stock, targeting those periods of time when they are high dividend yield stocks.

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Are These Five Safe, High Dividend Stocks Ready To Buy?

Posted on January 11, 2012 by Lee

High Dividend Stocks – Safety Matters, But So Does Price

High dividend stocks need to be examined to make sure their dividends are safe. This is no different than for any other dividend paying stock, but with high dividend yielding stocks, extra homework is required. The reason for this is because the yield is usually higher than yields on other stocks for one or more reasons. For instance, a stock could have had a bad quarter, causing the price to get reduced in the stock market, thus driving up its yield.

In a recent article published on January 10, 2012, Carla Pasternak highlights five high dividend stocks with safe dividends. Some very good points are made towards the end of the article, where she highlights the usefulness of evaluating a dividend payment vs. the free cash flow that a company generates. I personally like this method better than more traditional measurements of dividend safety, like the popular dividend payout ratio.

While I agree with her analysis regarding the safety of the dividends for the five companies that she lists, what is missing from this article is an evaluation of whether or not any of the stocks listed are a good value to buy right now. Here is a small excerpt from the article:

These companies have ample earnings to cover their high dividend yields.

www.thestreet.com/_…/five-safe-high-dividend-yielding-stock…

Let’s take a look at a few of the five highlighted high dividend stocks, and see whether they are a good value relative to their historic dividend yield. First up is Brookfield Infrastructure Partners (BIP). As you can see in the chart below, when Brookfield Infrastructure is yielding 5%, it is not a good value historically, but when it gets to 7.9%, that is the time to buy.

Brookfield Infrastructure Partners (BIP) dividend yield

Based on this, while BIP’s dividend may be safe, the stock is not priced low enough to consider buying it right now.

Next on the list of high dividend stocks to look at is  – Alliance Resource Partners (ARLP). Alliance Resource Partners dividend yield is currently at the high end of its historic range of 5.1%:

The time to buy this stock is when its yield is high, or put another way, when its price is low, which is around 9% for alliance Resource Partners.

The last stock from the list of high dividend stocks in the article that we will examine is Eli Lilly. Again the stock has a dividend that can be supported by current earnings and cash flow, but this high yield stock is different than the first two we looked at. Take a look at the picture below:

As you can see, the current Eli Lilly dividend yield is trading near its historic high end (the stock price is low), which makes it a good value by this metric.

As you can see from the pictures above, it is important to consider whether a high dividend stock is trading at a good value, in addition to making sure the dividend looks safe.

What financial metrics and ratios do you look at when analyzing dividend paying stocks?

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The Best Dividend Stocks Need To Be Bought For The Right Price

Posted on January 5, 2012 by Lee

The best dividend stocks are those that have a sustainable dividend payout, increase their dividends over time, and still grow their underlying businesses to deliver maximum value for their shareholders. In an article published on January 4, 2012, Patrick Martin lists 5 dividend stocks that he believes are very safe for investors to own in an article titled, “5 Dividend Stocks for the Lazy Investor”.

Indeed the stocks he lists are industry leaders within their business segments, each with good fundamental characteristics. On this level, you could say that his picks are amongst the best dividend stocks around. Here is a small excerpt from the article:

Another reason I like investing in high-quality dividends is that you can find them fairly easily. Lots of companies you know well pay hefty yields and should continue to do so in the future. I have four such stocks on my watchlist. …

As I’ve pointed out in the past, it is just not enough for a company to be a market leader with great fundamentals to warrant being on a list of the best dividend stocks you are buying for your portfolio. The fact is that stocks need to be bought for the right price in order to represent a good value when they are added to your portfolio.

One way to measure value is to look at the dividend yield of a stock, and to compare it to high and low yields from the past. In many cases, stocks that are considered to be fundamentally the best dividend stocks, and usually are number 1 or 2 in segment market share for their industry, will tend to cycle between high and low extremes in dividend yield over a period of years.

Here are a couple of examples from the article referenced above.

First, let’s look at Johnson & Johnson. This company certainly belongs on a list of best dividend stocks based in its fundamentals, and has a strong track record of raising the dividend payout every year. As you can see from the chart below, not only do they raise their dividend regularly, they are trading at the low end of their historic yield range, which makes them a good value right now based on that metric:

In this diagram, the lower line represents where JNJ would have to trade to be at their high dividend range of 3.5%, while the upper line represents where they would have to trade at in order to be at its low yield range of 1.6%.

Another stock from the list in Patrick’s article is Philip Morris (PM). This company is another one included on many lists of best dividend stocks, and for good reason – their fundamentals are sound, and they are very shareholder friendly. You can see from the chart below that they also raise the dividend payout regularly:

The big difference with the Philip Morris dividend yield is that it is currently at the high end of its historic range – indicating that this stock is not a good value at this time. In the case of Philip Morris, I like the buy area at a dividend yield of 6%, and a sell zone around 4% dividend yield. Just to emphasize the point, Philip Morris is one of the best dividend stocks out there, but the price needs to come down, or put another way the dividend yield needs to move up, before it is a good buy to add to your income portfolio.

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A Dividend Paying Stock At The Wrong Time – General Mills

Posted on January 4, 2012 by Lee

Many times when I post comments to this blog, I point out stocks in other people’s articles that don’t meet my criteria to buy them at the current time. Many times it is because a high dividend stock that is touted by the author I am reviewing does not have a high enough dividend yield to warrant an immediate buy signal. I’d like to use this post to go over an analysis that was written today by “Dividend Monk”, which I think was thorough enough on the fundamentals, and goes the extra step of pointing out that while the company and dividend safety are great, the price of the stock isn’t quite right yet to start taking a position in the stock.

The stock being reviewed in this article is General Mills (GIS). This is a well known food company that markets brands like Cheerios breakfast cereal, Yoplait yogurt, and Green Giant packaged vegetables. Here is a quick excerpt from the article regarding some of the financials that need to be reviewed before making an investment in a high dividend stock:

Overall, I think a high single digit rate is an accurate reflection of EPS growth, which is reasonable when combined with a 3+% dividend yield to produce low double-digit returns. Operating cash flow growth is negative over this period. …

I won’t go through the fundamentals here, I would invite you to go read “Dividend Monk’s” article to get a pretty good review of the fundamental indicators a dividend paying stock should be evaluated with. Instead, I would like to focus on the historic dividend yield of General Mills, and the author’s conclusion that the price needs to drop a little before it would be a good time to buy the stock – or put another way, the dividend yield would have to be higher.

First, let’s take a look at General Mills historic dividend yield chart:

General Mills Dividend Yield History Chart

I’ve drawn lines on the chart to show the high and low dividend yield range for General Mills. It is very common for a dividend paying stock to oscillate between high and low dividend yield values over a period of years. These extremes will tend to repeat themselves in generally the same areas over time, especially for larger more established companies. In this case, I have the buy zone for GIS set at around 3.9% yield, and the sell zone set around 2.5%.

Keep this in mind as we review the second chart I like to review for any dividend paying stock I am considering:

General Mills Historic Dividend Price Levels

In this chart, you see the historic stock price for General Mills, along with bands above and below the stock price that represent the where the stock price would have to be in order to be a buy at a 3.9% dividend yield (the lower band), or a sell at a 2.5% dividend yield (the upper band). The reasons these bands have been moving up over time is because this dividend paying stock has been increasing its dividend payout to shareholders.

Note that in the first chart, even though the dividend payout has been increasing, this dividend paying stock still stayed within the upper and lower dividend yield bands.

In summary, I agree with Dividend Monk’s conclusion that this is a solid dividend paying stock, but the price does need to come down before it represents a good value to start accumulating in a dividend stock portfolio.

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High Dividend Stocks – Is This Really The Worlds Best Dividend Portfolio?

Posted on January 2, 2012 by Lee

The beginning of the year brings us a multitude of “best high dividend stocks to own for 2012″ lists to mull over, so my next few posts will look at a few of these, and try to sort out the good ideas from the ones that need to be tossed out. Given the current state of the global economy, it is very important to do your homework in order to find dividend stocks with a high and safe yield. As I go through stocks from these lists, I will highlight some of the factors that are important to evaluate for people trying to figure out how to find a good dividend stock.

While looking at articles on high dividend stocks on January 1, 2012, I came across one that Jim Royal published titled, “The World’s Best Dividend Portfolio” on Motley Fool, a respected financial website. The headline is a real eye catcher, here is an excerpt:

In June, I invested my money equally in a selection of 10 high-yield dividend stocks. Those names offer triple the yield of the average S&P 500 stock. You can read all the details. Now let’s check out the results so far. …

Let’s take a look at a few of the authors dividend stock picks for this list, and see what we can find. The first stock on the list is Southern Company (SO). As a measure of value, I like to buy high dividend stocks when they are at the high end of their historic dividend yield range, and consider selling them when they are at the low end of their dividend yield range (amongst other factors).
Historic dividend yield levels for Southern Company
For Southern Company, it currently trades near the low end of its historic dividend yield range, which is around 4.2%, so right now it does not represent a good value. Put another way, if you bought the stock today, you are buying it when the price is already very high relative to its dividend payout, which means it is not a good value.  It is important when screening for high dividend stocks that the stocks you find actually have high dividends based on their individual trading histories.

Another stock from this list that jumped out at me was Frontier Communications (FTR). With a yield of over 15%, it is easy to want to own FTR – no wonder it is on lists of high dividend stocks. However, as I highlighted in a previous post on Frontier Communications dividend safety, I don’t believe Frontier’s dividend is safe right now. They pay more in dividends than they currently earn in profits. Now to be fair, this stock is listed by many authors as a turn-around opportunity, but until it does turn around, I consider it too speculative.

The last stock to discuss from this list is Exelon Corporation. This looks like a good candidate to add to our list of high dividend stockshigh dividend stock in for a number of of reasons. First, Exelon is currently near the high range of its historic dividend yield range.
Historic dividend yield chart for Exelon
Exelon also has a history of raising their dividends, which is depicted in the chart below by the increasing levels in the Buy and Sell zones on the chart.
Finally, Exelon has a payout ratio based on profits of ~58%, which gives the dividend a margin of safety. Of the three stocks from the list in the article I evaluated, this is the one I would focus on doing more homework on. The other two do not pass my sniff test.

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High Dividend Stocks – Timing Your Buy To get A Better Return On Investment

Posted on November 10, 2011 by Lee

High dividend stocks can be a gamble if investors don’t take the time to do a little homework up front. This post is going to focus on finding the right price to buy a dividend paying stock at. Lets focus on a couple stocks mentioned by Holly on gurufocus.com that are possibly buys right now:

Businesses such as these are most likely to sustain and grow their dividends. The highest yielding, most predictable stocks in Yacktman’s third-quarter portfolio are: Avon Products Inc. (AVP), Sysco Corp. (SYY), and Clorox (CLX), Johnson & Johnson …

 Her article goes through five of the dividend paying stocks owned by a large investment fund manager. High dividend stocks by my definition are those that are trading in the upper range of their dividend yield range. When you find fundamentally sound companies with a history of raising their dividends that are also trading in the upper end of their historic dividend yield range, it could be the right time to buy these stocks. Now let’s look at a few of the stocks from the article.

Clorox is a solid company that has a very strong record of increasing dividends over time. Right now, Clorox is trading in the upper end of it’s historical dividend yield range, as you can see in the chart below:

Historic-Dividend-Yield-Chart-For-Clorox-CLX-12-30-2011

So even though Clorox has a dividend yield of 3.6%, I count it amongst the list of high dividend stocks. Looking at Johnson & Johnson, the story is similar:

Historic-Dividend-Yield-Chart-For-Johnson & Johnson-JNJ-12-30-2011

Johnson and Johnson is trading at the high end of it’s long term yield range – or put another way the stock price is low relative to its dividend payments. With fundamentally strong stocks like JNJ, grabbing it when the yield is high gives you two distinct advantages. First, you get paid more in terms of dividend yield while you hold the stock. Second, since the price is low by this metric, you have a better chance of obtaining a good capital gain while you hold the stock.

Keep in mind that you need to do your homework to make sure stocks like these are able to maintain and grow their dividend over time. Using a screen like this will help you to find high dividend stocks that are also good values.

Do you have a stock screen that you use to find good dividend paying stocks?

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The Best Dividend Stocks Need To Be Bought At The Right Price

Posted on November 8, 2011 by Lee

It is important for every investor to remember that, when you are evaluating the best dividend stocks for your portfolio, they must be purchased at the right price to maximize their rate of return. Buying high quality dividend stocks when they are at a low price relative to their dividend conveys distinct advantages for smart investors. There are two primary reasons for this advantage.

First, if you buy the best dividend stocks when their price is low, by definition their dividend yield is high. I like to think of dividends as the way a stock pays you while you hold the stock. Since your dividend yield is calculated by dividing the current annual dividend payments by the price you purchased the stock at. If you buy your stock while the yield is high, you lock in a higher rate of dividend return than an investor who buys when the stock is at a higher price. This higher dividend yield will have a very favorable impact on your overall rate of return.

Second, buying a dividend paying stock, or any stock for that matter, when it is trading at a lower price gives you a margin of safety on your investment. This intuitively makes sense, after all, you are trying to buy low and eventually sell high. Buying dividend stocks when they are low priced is a powerful method of juicing the returns in your portfolio.

In a recent article, EFS Investment highlighted 7 of the best dividend paying stocks, and gave opinions on why 4 were Holds, while 3 were buys. Here is an excerpt:

Most investors invest in high-dividend stocks for strong income. In fact, a significant portion of long-term returns come from dividends. Besides, markets are highly volatile; stocks move up and down in unexpectedly high frequencies. …

After reviewing their choices, I found that only two of their stocks met my criteria for being at a low price relative to their dividend – and they were both in the “Hold” list.

The first one I like as a buy from their list is AT&T. This company currently has a dividend yield of 5.9%, which is above the 5.74% dividend yield that I consider to be a level to buy this stock at. See the chart below for a historical view of AT&T’s dividend yield:

The other stock from the EFS Investments list that is at a good price to buy right now is Coca Cola. Coca Cola is currently yielding 2.8% from its dividend payments. My buy level for Coca Cola is when it is yielding around 3%, so the current 2.8% yield is definitely in range to consider this stock a buy. Again, see the included chart for a historical view of Coca Colas dividend yield:

Even the best dividend stocks prices will fluctuate in the stock market. By paying attention to where the yield is relative to a stocks historic norms can give you an advantage in knowing when to buy a stock that you want to add to your portfolio.

Do you try to time your stock purchases to get in at a lower price? What stock price metrics do you look at before you buy a stock?

 

 

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