Three Dividend Stocks You Must Buy: AT&T Inc. (NYSE:T), PPL Corporation (NYSE:PPL), Southern Copper Corp (NYSE:SCCO)

Page 1 of 2

I wish that I had a dollar for every horrifying story I read about the fiscal cliff and its effect on the general appeal for dividend stocks. I have read so many by now that I wish I would have decided to backpack across South East Asia just to avoid them.  Ultimately, fiscal cliff fears surrounding dividend stocks were completely blown away. Dividend stocks still stand strong and income investors remain on the hunt for the next addition to their portfolios. Well for the scary story writers, they too have settled down on to their routine business of creating the next fad story.

AT&T Inc. (NYSE:T)

I consider investing in high dividend yielding stocks as a safe bet, because of two reasons. One, these companies have a strong cash flow to distribute dividends and secondly they have secure future revenue inflows. One more thing which I like about them is their performance in the long horizon. Keeping these in mind, I have screened three high dividend yielding stocks PPL Corporation (NYSE:PPL)AT&T Inc. (NYSE:T) and Southern Copper Corp (NYSE:SCCO). These stocks have consistently declared high dividend and helped the portfolios of its investors by providing stable cash returns. Let’s discuss them in detail:

Name of Company Forward Dividend Yield Payout Ratio 5 Year Average Dividend Yield
PPL Corporation 4.70% 51.00% 4.20%
AT&T Incorporated 5.10% 141.00% 5.60%
Southern Copper Corporation 2.40% 72.00% 6.20%

Source: Yahoo Finance

PPL

The recently settled Kentucky and Pennsylvania rate cases of PPL’s subsidiaries, Louisville Gas and Electric Company and Kentucky Utilities Company, has resulted in an increase in revenue from electricity and natural gas by ~$99.7 million. Louisville Gas’s base electric and natural gas rates have increased by ~4.8% and ~7.3% while Kentucky Utilities’s base electric rate has increased by ~5.8%. The return on equity (ROE) is ~10.25% of the base rates and the increased rates are implementedfrom the starting of 2013. I estimate ROE for the next few years from these subsidiaries to be around their authorized levels, but expect a double-digit growth in the base rate till 2015.

Additionally, with the disclosure of 4Q12 results in mid February, 2013 the company will give more details about two important factors. The first one is the hedged position of outputs for the year 2014. The company has hedged ~60% of its output for FY14 thereby providing clarity about its future cash flows. This hedged position will be up to ~90% of output. The second important factor is its outlook towards the UK business. The continued strong results of its UK segments shall drive PPL’s share price over the next twelve months. Along with that, I view the recent balance report of OFGEM, the UK Utility Regulator, about the gas distribution companies as a positive sign for the electricity distribution companies as well. I expect that its UK division shall contribute around 50% to the next year’s EPS.

AT&T

The company recently announced its results for 4Q12. Its consolidated revenue for the quarter was up by ~2.7% year-over-year (y/y), but its profit was down by ~3.9% y/y. Yet, it maintained an increase in EPS by ~10.2% y/y. The increment in EPS was mainly because of extensive share buybacks in4Q12, i.e. ~126 million shares. The company presented a mixed result for the quarter but after considering its guidance for the year 2013, I believe it will post a decent year with its consolidated revenue growth up by ~2%.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

Top 6 Cities For The Ultra Rich to Live in Comfort

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!