Dividend of the Month Club (kiplinger) - get paid every month

12 Dividend Stocks for Every Month of the Year

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Whether you’re pulling in a paycheck or living off investments, dividends can be a great way to reel in some cash. But investors usually have to wait months between payments. Many companies dole out dividends in March, June, September and December. If all your payments land in that timetable, your income stream can dry up for long stretches.

To keep the cash flowing, we assembled a bundle of 12 stocks that pays dividends every month, generating income like a steady paycheck. We focused on firms with steady businesses, sturdy balance sheets and a commitment to uphold their payouts. Not all the stocks boast fat yields. But our lower-yielding picks feature strong profit potential, along with room to hike their dividends.

A portfolio of equal stakes in each stock would yield 3.3%. That beats the 2.1% yield of Standard & Poor’s 500-stock index and the 1.5% yield of 10-year Treasury bonds. Stocks can fall far more than bonds, of course. But if you stick with this lineup, the payments should roll in. Most of these firms should increase their dividends each year, too.

All data as of July 31. Price/earnings ration based on estimated earnings over the next 12 months. Sources: Nasdaq, Thomson Reuters, Yahoo

By DAREN FONDA, Associate Editor | August 2016

Great Stocks to Get Dividends Every Month

January: Cardinal Health

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Symbol: CAH

Price: $84

Yield: 2.2%

Annual dividend rate: $1.80

Price-earnings ratio: 15

Also pays in: April, July, October

Drug distributor Cardinal runs a high-volume, low-profit-margin business that faces heavy pressure from rivals. But Cardinal is taking measures to fire up its growth.

The firm recently acquired Johnson & Johnson’s Cordis unit, which makes stents and other cardiology devices. Cardinal expects Cordis to bolster the firm’s international sales and boost annual earnings by more than 20 cents per share, or $65 million. Moreover, Cardinal has teamed up with CVS Health (its biggest customer) to buy generic drugs, helping Cardinal negotiate better deals that could lift its profits. Wall Street estimates that profits will climb 8% in the fiscal year that ends in June 2017. As the business improves, the shares should hit $97 over the next year, says Credit Suisse, which rates the stock “outperform.”

QUIZ: How Well Do You Know Dividends?

Great Stocks to Get Dividends Every Month

February: AbbVie

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Symbol: ABBV

Price: $66

Yield: 3.4%

Annual dividend rate: $2.28

Price-earnings ratio: 13

Also pays in: May, August, November

AbbVie produces Humira, one of the world’s best-selling drugs. Physicians are prescribing Humira for a growing array of illnesses, including rheumatoid arthritis, Crohn’s disease and psoriasis. Raking in more than $14 billion in annual sales, Humira accounts for more than half of AbbVie revenues and an even higher proportion of the firm’s profits, which are rising steadily.

Unfortunately, Humira’s starring role won’t last. Its U.S. patent expires at the end of 2016. But because Humira is a complex biotech drug, generic versions will likely take several years to gain traction in the marketplace and may not wind up being much less expensive than Humira. Meanwhile, AbbVie is expanding its roster of drugs to treat blood cancers and other diseases. Wall Street sees earnings growth of 12% this year and 18% in 2017.

Great Stocks to Get Dividends Every Month

March: Boeing

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Symbol: BA

Price: $134

Yield: 3.3%

Annual dividend rate: $4.36

Price-earnings ratio: 14

Also pays in: June, September, December

Aerospace giant Boeing has hit some turbulence.

Investors fret that demand for its wide-body planes is peaking. Plus, a strong dollar is crimping profits, and low oil prices may delay orders for new aircraft as customers stick with older, less-efficient planes.

Yet Boeing’s stock, down 6.1% this year, may already reflect those concerns. The firm’s aircraft production backlog remains enormous, with, Boeing says, orders for 5,700 new planes worth $480 billion. Meanwhile, the firm’s defense, space and security business looks solid, with sales rising 19% in the first three months of 2016, to nearly $8 billion. All told, Boeing’s bears have “overstepped reality,” says Deutsche Bank, which expects the stock to reach $160 over the next year.

SEE ALSO: What You Must Know About a Stock's Dividend Date

Great Stocks to Get Dividends Every Month

April: Coca-Cola

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Symbol: KO

Price: $44

Yield: 3.2%

Annual dividend rate: $1.40

Price-earnings ratio: 22

Also pays in: December, July, October

Yes, people are drinking less soda, but the soft drink giant can still thrive.

Price increases and expanding sales of bottled water (Dasani), energy drinks (Powerade), juices (Minute Maid, Simply Orange) and other products in its lineup are offsetting some of the decline in soda sales. Coca-Cola is also slimming down. The firm is exiting the capital-intensive bottling business almost entirely, transferring 84,000 employees from its workforce of 123,000 to independent bottlers. The shift will shave about $10 billion from Coca-Cola’s revenues by the end of 2017, according to Bank of America Merrill Lynch. But the move will save billions of dollars in overhead and bolster profit margins. Wall Street expects Coca-Cola to report earnings of $8.7 billion in 2017, up 5% from 2016. That ought to please one of the company’s biggest cheerleaders, Warren Buffett, whose Berkshire Hathaway owns about 9% of Coke’s outstanding shares.

Great Stocks to Get Dividends Every Month

May: Apple

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Symbol: AAPL

Price: $104

Yield: 2.2%

Annual dividend rate: $2.28

Price-earnings ratio: 12

Also pays in: February, August, November

Skepticism about Apple runs so high that the stock’s price-earnings ratio of 12 is 35% less than the P/E of the average big utility.

Bears argue that Apple’s innovation machine has stalled and that its flagship product, the iPhone, won’t lure as many customers as expected in China and other key markets, where lower-priced smartphones are making inroads. Yet Apple’s competitive strengths remain formidable. Its “ecosystem” of hardware, software and services keeps many customers locked in and coming back for new products. Sales are likely to pick up with the expected September launch of the iPhone 7. Apple is also developing additional revenue streams, such as a new subscription model for app developers and paid search ads on its App Store site. With $233 billion in cash and securities on its balance sheet and access to low-cost debt, Apple’s finances provide plenty of firepower for more dividend hikes.

SEE ALSO: 6 Good Dividend Stocks That Yield 5% or More

Great Stocks to Get Dividends Every Month

June: Microsoft

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Symbol: MSFT

Price: $57

Yield: 2.5%

Annual dividend rate: $1.44

Price-earnings ratio: 12

Also pays in: March, September, December

Microsoft tried to make a splash this year by undertaking its biggest acquisition ever—a proposed $26.2 billion deal to buy networking site LinkedIn. Yet the stock hardly budged on the news, partly because Microsoft already makes more than $20 billion a year in profits, vastly more than LinkedIn could kick in. But the stock jumped by more than 5% on the day after Microsoft issued results for its April–June quarter that handily exceeded Wall Street forecasts, with big gains in the firm’s cloud-computing business and steady growth in its flagship Office software suite. Profits are likely to keep inching up as Microsoft launches new software products and signs up more customers for its cloud services. All this makes Microsoft a kind of “tech utility” that can deliver steady earnings growth and a rising dividend, which Wall Street expects to increase by 7% over the next year. With the shares up 24% over the past year, the stock may take a breather in the near term. But, helped by a steadily growing disbursement, it should perform well over the long haul.

Great Stocks to Get Dividends Every Month

July: General Electric

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Symbol: GE

Price: $31

Yield: 3.0%

Annual dividend rate: $0.92

Price-earnings ratio: 21

Also pays in: January, April, October

Few, if any, rivals can match GE’s global scale and expertise in assembling products such as aircraft engines, gas and wind turbines, locomotives, and health care imaging machines.

Plus, GE is no longer shackled by its huge financial-services business, which it has mostly sold off. Armed with a stronger balance sheet, GE can now spend more heavily on dividends and stock buybacks, along with acquisitions that could lift its bottom line.

At 21 times estimated profits, GE’s stock looks pricey and may not have much appreciation potential in the near term. But the dividend appears to be secure, and analysts estimate that GE will boost the payout to $1.00 per share in 2017 — a healthy 9% raise.

SEE ALSO: Is There a Bubble in Dividend Stocks?

Great Stocks to Get Dividends Every Month

August: AT&T

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Symbol: T

Price: $43

Yield: 4.4%

Annual dividend rate: $1.92

Price-earnings ratio: 15

Also pays in: February, May, November

AT&T’s purchase of DirecTV last year is boosting results.

Analysts see the telecom giant’s revenues rising 12%, to $165 billion this year, with profits climbing 5%, to $17.6 billion. Growth of such magnitude isn’t likely to last, but AT&T should still be a solid earner, thanks to new TV services it plans to roll out. To help retain customers, the firm is also offering package deals with unlimited mobile data for subscribers who buy TV service, too. The knock on AT&T is that the stock, selling for about 15 times estimated year-ahead earnings, is pricey relative to its earnings growth. But compared with the paltry yield on Treasuries, the stock’s 4.4% yield looks appealing. AT&T’s dividend should keep rising, though modestly. Analysts see AT&T lifting the payout by 2% next year.

Great Stocks to Get Dividends Every Month

September: United Parcel Service

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Symbol: UPS

Price: $108

Yield: 2.9%

Annual dividend rate: $3.12

Price-earnings ratio: 18

Also pays in: March, June, December

One day in the future, drones dispatched by Amazon.com may drop packages on our doorsteps. But that won’t happen soon, making UPS a good bet to benefit from people buying more goods online. Delivering more than 4.5 billion packages and documents a year, the firm is constantly finding ways to speed things up, using technology to plan the best routes and squeeze every penny out of each drop-off. Its latest venture: rolling out digital-locker pickup spots at retailers such as 7-Eleven.

Over the long term, UPS will have to fend off FedEx and other rivals, including Amazon, which is adding thousands of trucks to its own delivery fleet. Yet it won’t be easy to match UPS’s vast global transport network and high-tech logistics services. UPS is more profitable than FedEx and DHL. Even after pumping cash back into the business, UPS should have ample funds to hike its dividend, which has climbed an annualized 10% since its first payout, in 2000.

SEE ALSO: Best Funds for Dividends Other Than Vanguard Dividend Growth

Great Stocks to Get Dividends Every Month

October: Occidental Petroleum

Symbol: OXY

Price: $75

Yield: 4.1%

Annual dividend rate: $3.04

Price-earnings ratio: 88

Also pays in: March, June, December

One of the largest domestic oil producers, Oxy reported big losses as oil prices collapsed. Yet its stock has stayed relatively strong. So has its dividend, which Oxy recently lifted from an annual rate of $3 per share to $3.04 per share.

Conservatively managed, Oxy keeps its debt low, socks away cash that it can later dole out as dividends, and refrains from spending heavily on risky oil or natural gas prospects. With its production costs now falling, the firm can break even and cover its dividend with the per-barrel price of oil in the mid $40s, estimates Merrill Lynch. Oxy is also expanding with a new natural gas plant in the United Arab Emirates and a petrochemicals plant in Texas. Oxy’s P/E looks high because earnings are depressed. But analysts see profits rebounding to $1.38 per share in 2017 and continuing to climb from there.

Great Stocks to Get Dividends Every Month

November: Verizon Communications

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Symbol: VZ

Price: $55

Yield: 4.1%

Annual dividend rate: $2.26

Price-earnings ratio: 14

Also pays in: February, May, August

Bundling packages of phone, internet and TV services is helping Verizon, the second-largest telecom provider, defend its turf against cable companies and its bigger rival, AT&T.

Verizon now controls all of its wireless business (after buying Vodafone’s 45% stake in 2014). Verizon has also gone on a spending spree to expand beyond telecom services. The company snapped up AOL and recently announced a deal to buy Yahoo for $4.8 billion. In addition, Verizon plans to buy Fleetmatics, which makes vehicle-tracking software, for $2.4 billion.

Trading at 14 times estimated earnings, the stock isn’t cheap in light of a profit-growth forecast of just 3% in 2017. But in a low-yield world, investors are paying up for the kind of stability Verizon offers, with dividends that should climb steadily for years.

SEE ALSO: Great Stocks With Rising Dividends

Great Stocks to Get Dividends Every Month

December: Valero Energy

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Symbol: VLO

Price: $52

Yield: 4.6%

Annual dividend rate: $2.40

Price-earnings ratio: 12

Also pays in: March, June, September

The world’s largest independent refiner, Valero produces gasoline, ethanol and other products.

With more than half of its production capacity located along the Gulf Coast, Valero has access to a variety of imported and domestic raw materials, such as heavy crude oil and natural gas, at low prices. It’s also in a good position to ship refined goods to Latin America, where demand is growing at a healthy clip. Those advantages have helped make Valero one of the lower-cost and more-profitable refiners. It is also conservatively managed, carrying just a modest amount of debt. With the industry now mired in a downturn, Valero’s profits have tumbled. But even with earnings expected to slide 65% this year, to $3.24 per share, Valero should rake in more than enough cash to cover its dividend. Analysts see earnings per share rebounding 60% in 2017. If that doesn’t pan out and the stock stays flat, investors should still be able to scoop up a 4.6% yield.

Exchange Traded Fund for Preferred Stocks (Motley Fool)

Make Money in These Cash-Spewing Preferred Stocks

http://www.fool.com/investing/etf/2013/09/12/make-money-in-these-cash-spewing-preferred-stocks.aspx Selena Maranjian
September 12, 2013Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you'd like to add preferred stock to your portfolio, but don't have the time or expertise to hand-pick a few, the iShares S&P U.S. Preferred Stock Index ETF (NYSEMKT: PFF) could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in lots of them simultaneously.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The iShares ETF's expense ratio -- its annual fee -- is a relatively low 0.48%. It's a behemoth, with more than $9 billion in assets and a hefty dividend yield near 5.8%.

This ETF has outperformed its benchmark index over the past three and five years. As with most investments, of course, we can't expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.
Why preferred stock?
Preferred stock isn't likely to appreciate in value like common stock can, but it does offer some nice features that offset that. For one thing, preferred stocks tend to pay heftier dividends, so they serve income seekers well. Holders of preferred stock also get to stand closer to the front of the line, should a company run into trouble and need to liquidate. (Thus, they're "preferred.")
Many of this ETF's components have been making solid contributions to its performance. Below you can see the power of preferred stock, via a comparison of the yield on common vs. preferred stock on some of the components:

Stock	Yield on Common	Yield on Preferred
US Bancorp (NYSE: USB)	2.5%	6.00%
MetLife (NYSE: MET)	2.3%	6.5%
Citigroup (NYSE: C)	0.1%	7.875%
ArcelorMittal (NYSE: MT)	5%	6.00%

Sources: Quantum Online, Yahoo! Finance.

 

Clearly, you can reap far more income from preferred stock. It's good to read up on preferreds first, though. Understand that higher yields are often tied to riskier companies in order to attract investors willing to take the chance.
US Bancorp is up 11% over the past year. It's well regarded, and known for conservative banking and a strong balance sheet. Its return on equity is far above those of its rivals. The bank is looking to profit from mobile banking, charging fees for check deposits and developing voice-recognition capabilities in its apps, to increase convenience. The company's second-quarter report featured growth in loans and deposits.
MetLife, up 46% this year, has aimed to reduce its regulatory oversight by selling off its banking unit to GE's GE Capital division. It has also stopped selling long-term care policies. Its reputation may have taken a hit, however, on news of a settlement tied to unpaid death benefits. Bulls are hoping for higher interest rates.
Citigroup, up 57% over the past year, posted double-digit growth in revenue and net income in its second quarter. Some are bullish on Citigroup because of its CEO, Michael Corbat, who has been effectively improving the company's balance sheet. Bulls also like its extensive global operations, which should deliver greater profits as world economies develop and grow.
ArcelorMittal's common stock has slid 10% over the past year, as the company has been dealing with a weak global steel market. A vertically integrated giant in steel, it carries a lot of debt and hasn't been producing gobs of free cash flow lately. Rising auto sales bode well for the steel company, though. Some see the stock as undervalued, but it was downgraded by Morgan Stanley last month on concerns about overvaluation. It doesn't help that it is more focused on the U.S. and Europe than China, which can grow faster.
The big picture
A well-chosen ETF can grant you instant diversification across any industry or group of companies -- and make investing in and profiting from it that much easier.

How to Create a Paycheck in Retirement (moneywatch)

By

Steve Vernon /

MoneyWatch/ October 22, 2012, 6:45 AM

3 ways to turn your IRA and 401(k) into a lifetime retirement paycheck

     

(MoneyWatch) I recently offered an overall financial strategy to help you avoid going broke in your retirement years: Don't spend your retirement savings!
Instead, you should think of your savings as "retirement income generators," or RIGs, that deliver a monthly paycheck that lasts for the rest of your life. The goal then becomes to spend no more than the amount of your monthly paycheck.
There are essentially only three ways to generate a monthly paycheck from your retirement savings:

• Invest your savings and spend just the investment earnings, which typically consist of interest and dividends. Don't touch the principal.
• Invest your savings, and draw down the principal cautiously so you don't outlive your assets. (In this post and future posts, I'll call this method "systematic withdrawals.")
• Buy an "immediate annuity" from an insurance company and live off the monthly benefit the insurance company pays you.

These methods are all designed to generate a lifetime retirement income, no matter how long you live. Achieving this goal will help you relax and enjoy your retirement. These methods might also provide protection against inflation, another important goal for many people.

Although these represent the three basic approaches to ensuring steady retirement income, each method has many variations. Here are just a few examples:

• If you decide to invest your money and only spend your investment earnings, you can invest in a variety of mutual funds, bank accounts, individual stocks and bonds, real estate investment trusts, or rental real estate.
• If you decide to use the systematic withdrawal method, you can invest your savings on your own and decide how much to draw down, or you can use a managed payout fund that does the investing and withdrawing for you.
• If you decide to purchase an immediate annuity, you have options. For example, you can buy an annuity that's fixed in dollar amounts, one that's adjusted for inflation, or a variable annuity that's adjusted according to an underlying portfolio of stocks and bonds. You can also buy an annuity that starts at a later age, or you can purchase a hybrid annuity that includes some of the features of systematic withdrawals.

These RIGS each have their advantages and disadvantages; there's not one magic bullet that works best for everybody. Most important, each type of RIG generates a different amount of retirement income:

• RIG #1, interest and dividends, typically pays an annual income ranging from 2 percent to 3.5 percent of your savings, depending on the specific investments you select and the allocation between stocks, bonds, cash and real estate investments.
• RIG #2, systematic withdrawals, typically pays an annual income from 3.5 percent to 5 percent of your savings, depending on your investments and how worried you are about exhausting your savings before you die.
• RIG #3, immediate annuities, can range from 4 percent to 6.5 percent of your savings, depending on the type of annuity you buy and your age, sex and whether you continue income to a beneficiary after your death.

You don't need to use just one type of RIG to generate the income you need. In fact, it might be best to use a combination of a few different types. In addition, there can be good reasons to change your RIGs as you get older. And some financial institutions have been introducing hybrid products and solutions that combine features of two or more of these basic RIGs.
 

© 2012 CBS Interactive Inc.. All Rights Reserved.

Top Dividend Aristocrats (street.com)

10 Best-Performing 'Dividend Aristocrats'

The biggest dividend payer in the group has a yield of 7.4%.
By Frank Byrt, Analyst
THESTREET.COM — 05/03/12

Investors, ravenous for reliable returns given the sketchy economic outlook, are gobbling up dividend stocks and dividend-focused mutual funds this year. That means high-yielding shares may continue to rise.


Indicative of investors' current interest in yield, both bond and dividend-focused equity mutual funds are being flooded with cash, while other fund categories are suffering outflows.


This year through April 25, dividend-focused stock funds had inflows of $17.3 billion, resulting in total net inflows of $1.1 billion for all types of mutual funds, which means other categories of stock funds had outflows of $18.4 billion, according to fund tracker EPFR Global.


"We've been seeing a tremendous search for yield, given that interest rates have been so low," said Cameron Brandt, director of research at EPFR.


Most investors have been buying bond funds, but those looking to get potentially higher total returns are going with dividend-focused stock funds, he told TheStreet.


With that in mind, I screened the SPDR S&P Dividend ETF (Symbol : SDY ), an exchange traded fund that tracks the S&P High Yield Dividend Aristocrats Index -- which is made up of the 60 highest-yielding stocks of the S&P 1500 that have also raised their dividends every year for the past 25 years -- for the 10 stocks with the best share-price returns so far in 2012.


This group of stocks should give their investors the best of both worlds: high-quality companies -- since they have solid, sustainable business models -- coupled with potentially good share-price returns.


But there are no home run returns to be had here, as big steady dividends are their chief appeal and share-price appreciation comes secondary, hence Wall Street analysts' middling ratings.


The biggest dividend payer in the group, insurance underwriter Old Republic International (Symbol : ORI), has a yield of 7.4%, while the biggest share-price return is that of another insurer, Cincinatti Financial, with a 19.5% total return (which includes dividends). Its shares carry a hefty 4.4% dividend yield.


The S&P 500's total return is 12.5% this year, including a 2% dividend yield.


Here are 10 stocks of the 60 S&P dividend aristocrats with the best total returns ranked in inverse order of year-to-date gain:


10. Kimberly-Clark (Symbol : KMB )


Company profile: Kimberly-Clark (Symbol : KMB ), with a market value of $31 billion, is a major consumer products company with a stable of tissue, personal-care and health-care brands including: Huggies, Pull-Ups, Kotex, Depend, Kleenex and Scott.


Dividend Yield: 3.76%


Investor takeaway: Its shares are up 7.4% this year and have a three-year, average annual return of 20%. Analysts give its shares one "buy" rating, one "buy/hold," 12 "holds," and two "weak holds," according to a survey of analysts by S&P. Analysts estimate it will earn $5.15 per share this year and that that will rise by 8% to $5.54 per share next year.


Morningstar says Kimberly-Clark (Symbol : KMB ) "throws off a ton of cash, but it's facing an increasingly difficult time in its categories" due to competitive pricing pressures domestically and in Europe. There are also valuation concerns as the shares have gained 23% in the past 12 months.


9. Genuine Parts (Symbol : GPC )


Company profile: Genuine Parts (Symbol : GPC ), with a market value of $10 billion, is a wholesale distributor of automotive replacement parts, industrial parts and supplies, and office products.


Dividend Yield: 3.01%,


Investor takeaway: Its shares are up 8.2% this year and have a three-year, average annual return of 28%. Analysts give its shares eight "holds" and one "weak hold," according to a survey of analysts by S&P.


8. Bemis International


Company profile: Bemis, with a market value of $3 billion, manufactures flexible-packaging products and pressure-sensitive materials. About 65% of its sales come from the food industry.


Dividend Yield: 3%


Investor takeaway: Its shares are up 9% this year and have a three-year, average annual return of 13%. Analysts give its shares one "buy" rating, one "buy/hold," 10 "holds," and two "weak holds," according to a survey of analysts by S&P. Analysts estimate it will earn $2.10 per share this year and $2.36 next year, representing 12% growth.


S&P says its "hold" rating "is based on our valuation metrics, along with still challenging global markets and high raw material costs."


7. Old Republic International (Symbol : ORI)


Company profile: Old Republic (Symbol : ORI ), with a market value of $2.6 billion, is an insurance underwriter in the U.S. and Canada.


Dividend Yield: 7.10%


Investor takeaway: Its shares are up 9.7% this year and have a three-year, average annual return of 8%. Analysts give its shares one "hold" and one "weak hold" rating, according to a survey of analysts by S&P.


6. RPM International (Symbol : RPM )


Company profile: RPM International (Symbol : RPM ), with a market value of $4 billion, makes specialty chemical products to industrial and consumer markets worldwide.


Dividend Yield: 3.20%


Investor takeaway: Its shares are up 10% this year and have a three-year, average annual return of 28%. Analysts give its shares two "buy" ratings, six "holds," and one "sell," according to a survey of analysts by S&P. Analysts estimate it will earn $1.62 per share this year and that earnings will rise by 11% to $1.80 per share next year.


5. Coca-Cola


Company profile: Coca-Cola, with a market value of $173 billion, makes carbonated and still beverages, and sells non-alcoholic beverages worldwide.


Dividend Yield: 2.65%


Investor takeaway: Its shares are up 11% this year and have a three-year, average annual return of 25%. Analysts give its shares 10 "buy" ratings, five "buy/holds," and seven "holds," according to a survey of analysts by S&P.


4. AT&T (Symbol : T )


Company profile: AT&T (Symbol : T ), with a market value of $194 billion, is the second-biggest U.S. wireless carrier, serving 89 million traditional customers and 12 million "connected devices" such as e-readers. It is also the dominant local phone company in 22 states.


Dividend Yield: 5.39%


Investor takeaway: Its shares are up 12% this year and have a three-year, average annual return of 14%. Analysts give its shares seven "buy" ratings, six "buy/holds," 22 "holds," and one "sell," according to a survey of analysts by S&P.


3. Abbott Laboratories (Symbol : ABT )


Company profile: Abbott, with a market value of $97 billion, makes and markets pharmaceuticals, medical devices, blood glucose monitoring kits, and nutritional health-care products.


Dividend Yield: 3.29%


Investor takeaway: Its shares are up 12.5% this year and have a three-year, average annual return of 18%. Analysts give its shares five "buy" ratings, five "buy/holds," 12 "holds," and one "sell," according to a survey of analysts by S&P. Analysts estimate it will earn $5.03 per share this year and $5.37 in 2013, or 7% growth.


2. Federal Realty Investment Trust (Symbol : FRT )


Company profile: Federal Realty, with a market value of $6 billion, is an equity real estate investment trust (REIT) that specializes in the ownership, management and redevelopment of community and neighborhood shopping centers.


Dividend Yield: 2.74%


Investor takeaway: Its shares are up 13% this year and have a three-year, average annual return of 28%. Analysts give its shares two "buy" ratings, two "buy/holds," and 11 "holds," according to a survey of analysts by S&P. Analysts estimate that it will earn $2.40 per share this year and $2.65 in 2013.


1. Cincinatti Financial


Company profile: Cincinatti Financial, with a market value of $6 billion, is an insurer that provides coverage for commercial casualty, commercial property, commercial auto, and workers' compensation risk.


Dividend Yield: 4.40%


Investor takeaway: Its shares are up 19.5% this year and have a three-year, average annual return of 21%. Analysts give its shares six "holds" and one "sell," according to a survey of analysts by S&P.



Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.




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Getting Ready to Retire? Do These 5 Things Now

Retiring in 2012? Read this today

BY Tom Lauricella,
The Wall Street Journal

Copyright © 2012 Dow Jones & Company, Inc. All Rights Reserved.
The Wall Street Journal — 01/01/12

For some, 2012 will be much more than just another year. It will be the year that, after decades of punching the clock, they'll join the ranks of the retired.

Before making that final commute to work, however, those retiring this year should make a to-do list.

There are important aspects of retirement to prepare for and steps that can make the transition smoother both financially and emotionally. Here are five things to do now.

1. Start keeping close track of your spending
During the planning phase for retirement finances, much of the math was based on guesswork. Now is the time to get real.

Start by going back over the past few months of bills and expenses to get a detailed picture of your spending and expenses. Plan on keeping close tabs on a continuing basis, remembering that some spending may be seasonal — such as holiday presents or greens fees for golf.

Budgeting tools, such as Mint.com, will enable you to highlight certain spending that won't continue after retirement, such as commuting costs.

Keep in mind this will be a work in progress even once you stop working. For many people "it's going to take a year or so before you really get the hang of it, knowing what you are spending your time doing, how you are spending your money," says Jonathan Guyton of Cornerstone Wealth Advisors in Minneapolis.

2. Fine-tune your income expectations
Recent years haven't been kind to savers. A lousy decade for stocks has been compounded by interest rates that are at historically low levels and seem likely to remain low for years.

Unfortunately, 401(k) calculators typically don't rely on current yields when projecting your income during retirement. Instead, they usually rely on historical patterns.

That means some people nearing retirement may be in denial about how much money they can earn from safe investments such as bonds or certificates of deposit, says Lawrence Glazer, a managing partner at Mayflower Advisors in Boston. "You have to be realistic about today's income environment," he says.

3. Start thinking about Social Security
Central to your income planning will be Social Security benefits. You won't know the exact size of the check until the first one arrives, but the Social Security Administration can provide an estimate that should be relatively close. You can get an estimate at SocialSecurity.gov, on the phone or in person at your local office. Be sure to check if you're due additional benefits if you are widowed or divorced.

All this leads to one of the most important decisions regarding retirement planning: when to start taking Social Security benefits. Delaying benefits means larger checks in the future, but it may require eating into your savings upfront. Sit down with an adviser to do the math.

4. Build a cash reserve
One thing you want to avoid in retirement: being forced to sell during a steep selloff in the stock or bond markets in order to raise cash to pay bills.

The solution is to keep enough cash on hand that you can sell investments when you are comfortable. Many advisers recommend at least a year's worth of money.

Advisers have long recommended that retirees hold two years of money in a separate account. A retiree then cuts himself a "paycheck" once a month which goes into a checking account for day-to-day living. "In a perfect world, an investor would begin developing the reserve prior to retirement," says Harold Evensky, president of Evensky & Katz.

A dedicated cash reserve is especially important if you are delaying taking Social Security. "The idea is that this is a bridge account that will deplete itself by the time Social Security kicks in," says Mr. Guyton.

5. Get emotionally ready
Amid the focus on financial planning, don't lose sight of the fact that for most people, retirement is a completely new and different experience that can be challenging on an emotional level.

While many people can't wait to get out of the 9-to-5 grind, there are those for whom a career was more than a job. It was an identity.

"You've got the executive who has worked 24-7…and has always identified his self worth with that paycheck," says Mayflower's Mr. Glazer. "Without that paycheck, he feels a little empty."

Cornerstone's Mr. Guyton urges those approaching retirement to think in terms of "retiring to something" and not "retiring from something."

"If your definition of retirement is framed in terms of what you are leaving, you are setting yourself up for a much more difficult transition emotionally," he says. "Even if it's just some relatively small thing that you are energized about and this is something you get to do right now…you generally do much better."


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Copyright © 2012 Dow Jones & Company, Inc. All Rights Reserved.

Annuities: Getting the Most Income (Morningstar)

Improving Your Finances

Four Strategies for Combating Low Annuity Yields

By Christine Benz | 12-22-11 | 06:00 AM

To help avoid outliving their assets, more retirees should defer Social Security and consider income annuities, according to a report prepared by the General Accounting Office for the U.S. Senate's Special Committee on Aging.


Yet many retirees do just the opposite, according to data presented in the report. Between 1997 and 2005, roughly 43% of Social Security-eligible individuals began taking benefits within one month of turning 62, even though waiting until their full retirement age would've translated into a substantially higher payout.


Retirees also skimp on annuities, according to the study, even though several research papers, including one from Ibbotson Associates, have demonstrated that the products can help ensure that individuals don't outlive their savings. Between 2000 and 2006, just 6% of retirees with defined-contribution plans such as 401(k) and 403(b) plans chose to move their assets into an annuity upon retirement, according to the GAO study; nearly 40% of these folks left their money in their accounts following retirement, while another one third rolled the assets over into an IRA. (The GAO's data follows participant behavior shortly after individuals retired; the report acknowledges that these same retirees may have chosen a different strategy for their retirement savings at a later time.)


Why Are People Avoiding Them?
Academics and finance professionals specializing in retirement income have conducted research into why investors are so resistant to annuities. One key impediment is pretty straightforward: loss of control. In contrast with traditional investment assets that you can alter and tap whenever you see fit, a key premise behind annuities is that you fork over a lump sum in exchange for a stream of payments throughout your life. Those payments may ultimately add up to more than you'd be able to take out of a nest egg composed of stocks, bonds, and cash, particularly if you live a long time, but the irrevocability of the decision to purchase an annuity is a key psychological barrier.


Another woefully underdiscussed reason that so few retirees opt for annuities is that payouts from plain-vanilla, single-premium immediate annuities are painfully low. In mid-2010, the difference between fixed annuity payouts and five-year certificate of deposit rates actually dipped into negative territory. Although the situation for fixed-annuity buyers has improved somewhat recently, the payouts still aren't compelling: In early 2011, fixed-annuity rates, on average, were just 0.39% higher than five-year CD rates. Of course, immediate-annuity buyers are guaranteed their income for life, even if they live to be 115. But they're also giving up control of their assets.


Annuity payouts have been depressed in part by increasing longevity: With payouts being spread over very long lives and few purchasers dying prematurely, that has the net effect of shrinking payouts for everyone in the annuity pool. (There's also some evidence that those purchasing annuities tend to be healthier with the likelihood of living longer than the general population, which could serve to depress annuity payouts further.)


Those factors are likely to be long-term headwinds for annuities. But the other factor depressing annuity payouts is apt to be more temporal: rock-bottom interest rates. For an immediate annuity, your payout will consist of just a few key elements: whatever interest rate the insurer can safely earn on your money as well as any mortality credits (the amount the insurer expects to be able to reallocate from those who die prematurely to those who survive), less the insurance company's fees. With interest rates on very safe investments barely breaking into the black, it's no wonder that annuity payouts have sunk, too.


The current rate environment argues against plowing a lot of one's assets into an immediate annuity all in one go, but that doesn't mean that investors should completely dismiss annuities (and the promise of lifetime income they provide) out of hand.


Here are four strategies for playing it smart with an immediate-annuity purchase.


1. Consider Your Need
Fixed immediate annuities will tend to make more sense for some retirees than others. Those who have a substantial share of their lifetime living expenses accounted for via pension income or Social Security will likely want to diversify into investments over which they exert a higher level of control and have the opportunity to earn a higher rate of return, such as stocks. Those who don't have a substantial source of guaranteed retirement income, meanwhile, will find greater utility from annuity products.


2. Be Patient
Although the negative effects of longevity are unlikely to go away soon, rising interest rates will eventually translate into higher annuity payouts. Don't expect substantially higher payouts right out of the box, particularly given that the still-shaky economy is apt to keep a damper on interest rates, and in turn annuity payouts, in the near term. But interest rates don't have much more room to move down, and it's worth noting that as recently as a decade ago, annuity rates were nearly double what they are today.


3. Build Your Own Ladder
One of the key attractions of sinking a lump sum into an annuity is the ability to receive a no-maintenance, pensionlike stream of income, which is particularly appealing for retirees who don't have the time or inclination to manage their portfolios on an ongoing basis. However, a slightly higher-maintenance strategy of laddering multiple annuities can help mitigate the risk of sinking a sizable share of your portfolio into an annuity at what in hindsight could turn out to be an inopportune time. If, for example, you were planning to put $200,000 into an annuity overall, you could invest $40,000 into five annuities during each of the next five years. Such a program, while not particularly simple or streamlined, would also have a beneficial side effect in that it would give you the opportunity to diversify your investments across different insurance companies, thereby offsetting the risk that an insurance company would have difficulty meeting its obligations.


4. Consider More Flexible Options
Throughout this article, I've been focusing on the simplest of annuity types--fixed-rate immediate annuities. These vehicles are typically the cheapest and most transparent in the annuity world, but they're also the most beholden to whatever interest-rate environment prevails at the time the purchaser signs the contract. It's worth noting, however, that the annuity universe includes many products with more bells and whistles, including some that address the current yield-starved climate by allowing for an interest-rate adjustment if and when interest rates head back up. Such products offer an appealing safeguard to those concerned about buying an annuity with interest rates as low as they are now, but the trade-off is that the initial payout on such an annuity would tend to be lower than the payout on an annuity without such a feature. A key rule to remember when shopping for annuities is that as you layer on safety features, such as survivor benefits and the ability to participate in higher payout rates in the future, you'll likely increase your costs and reduce your monthly payout, at least at the outset of your contract.


A version of this article appeared July 14, 2011.

Preferred Stocks for Real Estate Investment Trusts (Forbes.com)

Investing
A Preferred Path To REIT Income
Peter Slatin, 11.07.11, 6:00 PM ET


I'll put it to you plainly: REITs are overpriced. Many investors have bought into a broad recovery in this sector, but I am afraid prices have gotten ahead of themselves. Yes, I am aware that REITs, as measured by SNL's index, fell 15% in the third quarter. Still, I believe most are richly priced.

The problem, of course, is fading economic growth, and it's a bit of a vicious cycle. The weak economy and uncertainty at home is causing violent stock market gyrations. Things are even worse in Europe. This is gnawing away at banks' health and wellbeing, and they are reluctant to step up and make loans. Economic expansions that fill space in the real estate market require financing. With lenders under pressure and whining about woes, it's hard to imagine a speedy restart to the recovery. It sounds pretty bad, but there are still a few compelling opportunities for investors willing to take a little risk. “Buying on bad news” or when a nervous market clouds valuations is one of the core strategies of successful value investing. When this economy and the REIT market turn, the forward momentum will be sharp: REITs have slashed their debt levels and stocked up on cash, which means that, barring total disaster, it is only a matter of time before the best among the group move ahead again.

In the meantime there is a somewhat safer place for weary real estate investors looking for big yields: REIT preferred shares. These securities are less well-known, but since they are higher up in the companies' capital structure, they take priority over REIT common share owners when it comes to paying out cash dividends.

These days REIT preferreds tend to sell at a 10% to 15% discount to their par value, which is typically $25. Oh, and did I mention that the dividend yields now are averaging about 8%? REIT preferreds tend to be less volatile than REIT common shares, but the downside of lower volatility is lower liquidity. Trading volume is low. The higher yields mean that there is some risk that management could call in shares. But they can't do so for the first five years after issuance and, with their current discounts, an early call translates into capital gains.

Buying individual preferred issues is challenging, though not impossible. You want companies with great balance sheets and a good track record. Longtime REIT watchers often cite the preferred shares of Public Storage as the gold standard. Today Public Storage's preferreds are trading slightly above par and have a current yield of 6.7%.

I recommend using funds to play the REIT preferred-yield game. My top pick is FORWARD SELECT INCOME FUND (KIFAX, 21), a ten-year-old no-load mutual fund with $1.1 billion in assets under management. Its current yield is 9.4%.

Another good bet just got better. Lazard Asset Management just acquired the REIT mutual funds from Grubb & Ellis Alesco Global Advisors, still managed by Jay Leupp and David Ronco. Lazard is sure to add seed capital to bulk up these underfunded yet well-performing funds, which languished under prior sponsorship but still produced great results. Buy LAZARD U.S. REALTY INCOME PORTFOLIO (LRIOX, 9), currently weighted about 60% toward preferreds. Among its holdings are the Glimcher Realty Trust Series F, a mall REIT, and Hersha Hospitality Trust Series B, a hotel REIT, yielding 9.4% and 9.2%, respectively. The tiny fund is offering a current yield of 6%.

COHEN & STEERS REIT & PREFERRED INCOME FUND (RNP, 13) is a closed-end fund that has just under $1.2 billion in assets and is run by the 800-pound gorilla of REIT managers. If you want quality, New York City's Cohen & Steers has a sterling reputation, and this fund has a yield of 6.7%.

If preferreds are too slow and steady for you, here's a health care REIT whose common shares provide preferred-type yields as well as strong growth prospects. LTC PROPERTIES (LTC, 26) is the owner of a basket of long-term, net-leased properties devoted to senior care, from assisted living to skilled nursing. The 19-year-old southern California company has a $790 million market cap and a dividend yield of 6.6%. LTC has 207 properties in 30 states, plenty of cash on hand and a solid management team. I expect it to continue growing despite the sluggisheconomy.


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PETER SLATIN IS EDITOR OF THE FORBES/SLATIN REAL ESTATE REPORT (SEE FORBES.COM/SLATIN ) AND EDITORIAL DIRECTOR OF REAL CAPITAL ANALYTICS