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5 safe stocks that pay huge dividends

Investors need to know the difference between a big dividend and a safe one. These high-yielders are strong enough to continue sharing the wealth.

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39Comments
Oct 11, 2013 4:47PM
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To V_L and Bids Jim:  I do appreciate your comments, while at the same time I agree and disagree with some of your views.  Yes, I have worked in the Corporate World and watched the top executives want to find out what their Bonus was projected to be.  In addition, the company, furnished new cars, special meals, insurance, club dues and a expense account plus other goodies.  The manager level liked to refer to the top executives expenses as General and Administrative or G&A or Graft and Corruption.  During my lifetime I began two start-up company's  which I sold and put my kids thru college. While I know that small companies have to strain to make a profit, most established companies do well and can afford to pay their employees well.  I question the value of a company that pays the CEO 100 million a year and keeps their international profits overseas so as not to pay American Taxes.
Oct 11, 2013 2:05PM
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The average SS check is 1100 dollars, so I think anyone thinking people are living excessively of that amount is misinformed. Any one that thinks 1100 is not just a portion of retirement is also misinformed.

Oct 14, 2013 2:26PM
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AMEN!  If $1100.00 is a true living monthly wage, then all politicians should be limited to $1100 a month. And then only half when they retire. Let's see how many want to be career politicians then!
Oct 11, 2013 9:04AM
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Global World Economy.The plan ,>replace the old workers with new illegal immigrants give them medical care {Obamacare}  drivers licenses school{The Dream Act} and you have the vast Slave Labor that the Corps need so their stocks return a  dividend /profit  Also transform all workers to that level of cheap labor.Also make them low-wage debt slaves Does not matter if no speak english or if the job is done half-assed just as long as it is DONE cheap CHEAP CHEAP And Yeah you will make a little money in the market the WORLD MARKET No more America, No more American worker  it does not exist anymore we are a Global Country with Global Workers That is the Change OBAMA talked about welcome to the future,.... the good ,and the bad, this is what we got..........
Oct 11, 2013 2:08PM
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We have people that live off their dividends and spend them in the US economy. We have a lot of people that do not and they do not re-invest in the American economy. Should they get a big  tax break?
Oct 11, 2013 9:46PM
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P.S.  Of FE and SO, the two stocks with no-purchase fee DRIP's (see my previous post here), I don't like FE - except for its 6% dividend.
It hasn't raised its dividend since 2007 and it's required an ever larger % payout over the last several years as earnings have generally dropped.  It's earnings are expected to continue to drop over this year and next year. It's long term debt is over 50% of it's equity.  Return on Equity has gradually dropped over the past decade to an anemic 5.8%.  This is a measure of how well the company puts new money to work and it doesn't do it well.
Analyst consensus is that it will grow earnings an average of 1.74% annually over the next 5 years.
Nevertheless S&P awards it 3 stars (HOLD).  This is probably due to the fact that electric utilities as a sector have had declining profits in recent years.

Consequently, with SO being an electric company, it's surprising that SO looks more like one the stock examples you see in books like "Buffettology:"  most things about it seem to point to probable slow positive growth.  It's earnings and revenues make a slow steady growth over the past decade with an understandable dip in 2008 that it recovered from by the end of 2009.  Dividends have grown consistently over the past decade.  S&P reports rates it 4-stars and says, "We believe the company should benefit from an improved economic outlook and expect the shares to trade at a premium to SO's peers, on its financial strength and the relative pre-dictability of its dividend stream..."
Long Term Debt is 52.7% of capitalization, somewhat high, but it's been over 50% for a decade and has been dropping down from 57.4% a few years back.
Return on Equity has been in the low teens most of the past decade and has risen from 11.7% to 13.1% over the last three years, indicating an improving ability to put new earnings to work.
Analyst consensus is that it will grow earnings an average of 4.28% annually over the next 5 years. That plus the 5% dividend represent a solid 9% annual return from the stock.

Even though FE offers a 6.0% dividend and SO a 5.0% dividend, SO is the company in which I'd rather invest.




Oct 11, 2013 8:00PM
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I haven't researched these stocks, but SO and FE deserve further study for stability and predictability if you are interested in multiple dollar-cost-averaging investments over time with no purchase fees.  Both companies have DRIP's, SO's administered by computershare.com and FE's by amstock.com that require a minimum $250 initial deposit (SO has a $10 setup fee) and you can make optional cash purchases of as little as $25 and can also set up no-fee automatic monthly purchases from your bank account.
I have been saving that way for decades and many relatively small purchases allowed me to retire at age 56.  Whenever it seemed practical, I added $25 here or there either to a new stock/fund or by increasing the amount at stock/fund I already owned and slowly ratcheted the total up.  Up until the early 2000's you could do the same with mutual funds at T.Rowe Price, Vanguard, etc. but they want $2500 to set up an account.  One option is to build up a DRIP and then sell all or some shares and open a fund account.

Oct 11, 2013 3:09PM
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The market manipulators are back .. they lost big time yesterday ... they are now trying to force the market down to  recoup their losses .. this was forecast, Their actions are  slowly destroying the market.  Don't let these cheats sucker you in at the close. The market shows signs of picking up at the close, as it did yesterday.
Oct 10, 2013 9:31PM
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Believe that V_L is on the right track.  Only I think it is the top 1% who elect our senators that have a big say in this matter  The only way to cure it is to increase the tax rate ladders higher and take away all the loop holes in our tax laws. The additional cost of ACA which  has been reported to increase the debt by 6 Trillion over ten years will cause this increased taxation and make our children and grandchildren pay higher taxes ad- nausea..
Nov 2, 2013 8:36AM
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Concerning global warming, as a believer, that is the least of MY worries as my God in Genesis 8:22 stated "while the earth remaineth, seedtime and harvest, and COLD and HEAT, and SUMMER and WINTER, and DAY and NIGHT shall NOT CEASE." ..........good enough for me

 

Oct 11, 2013 3:32PM
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Reynolds American continues to lose market share. How safe is that?
Oct 11, 2013 6:32AM
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"I'm retired so the job market does not affect me directly."

 

What a piss poor attitude, you non-American. I am NOT retired and worked decades for small salaries tied to bonus structures. In all my years, I was never paid more salary than bonus! All that bonus income came from skill sets my employers didn't have and benefited from paying me for it. Today I own 2 businesses. I am fair to my customers, employees and myself-- so I don't have cheap labor, cheap goods and a financial windfall for my paper and button wrangling efforts... I just make a good living and pay fair taxes. Retirees have ZERO understanding of what's going on and need to start talking to and not at family members, instead of listening to commercial news. YOU were indentured at a time when Founders were around. Now we endure inheritors and Glass Ceiling corruption. IT HAS TO GO. You want to break union representation? Cap pay for non-Founders and have legally validated Performance Appraisals done by the Rank and File on the Middle Management. End At Will Employment and Corporate Boards. Let's eliminate the Veil of Anonymity and require a Designated Responsible Person in every entity. Founders had ethics, character and pride in their enterprises... today we don't even have enterprise.

Oct 14, 2013 1:46PM
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Sure, tobacco. Profit from human misery. And let me know how well this works out for you at the next legal "settlement." Sleep well at night.
Nov 14, 2013 10:24PM
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First Energy is #1???  Are you serious?
Apr 20, 2014 8:25AM
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How about updating your information. It is 2014 and your article is from Oct. 9, 2013. For example ETR is trading at 71 dollars a share, not $64. HMB
Mar 11, 2014 7:33AM
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Why are the markets up? Government manipulation is why. Anyone who praises Obama needs his head examined...
Oct 11, 2013 6:40AM
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"Believe that V_L is on the right track.  Only I think it is the top 1% who elect our senators that have a big say in this matter  The only way to cure it is to increase the tax rate ladders higher and take away all the loop holes in our tax laws."

 

Thanks! 63% of us Americans want a clean sweep of Congress. I, for one, want the Party of NO who pledged to their party rather than to honor the oath to their constituents-- to be purged of everything and banished to Katrina Trailers. Just WHO did these terrorists think they were? They are Treasonous BASTARDS now. Regardless of any shutdown resolution-- we know that these people did us wrong and that Wall Street BETS using DEBT monies, not conduct Exchanges based on business. Markets serve only greedy masters so hunt wealth down, crush them into the ground, create a new currency and actually make sure it stays in currency and not locked in markets and vaults doing bad things to regular people EVER AGAIN. If you oppose-- use your passport today and get to where you think other regular people will tolerate you. Good luck finding that place.

Oct 11, 2013 6:17AM
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What's going to happen to utility stocks if it's decided that climate change is real, and is caused by the burning of fossil fuels? 
Oct 11, 2013 6:41AM
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Obviously-- the 320+ point increase for the Dow today was total fear. Wall Street knows it's heading over the edge and doom is all they can see. That wasn't THEIR money, it was ours and we won't be seeing it back any time soon, but we'll know it intimately every tax time until our deaths.

 

The Exchanges don't work and neither do business platforms. The cost-- today was another TRILLION added on to the $632 TRILLION in derivatives already outstanding. Pretty soon you won't see 50% of your gross pay because another 20% of it will go toward taxes. Blame the top 5% in earners, they took it instead of trickling it down.

 

Obama declined the latest idiotic GOP offer. The entire 320+ Dow points were based on the "hope" of a resolution-- ignoring the nearly 400,000 NEW jobless benefit claims last week. It isn't getting better and NO party of NO pledgers are facing Impeachment. That means YOU are un-American or don't care or peck on your I-Phone pretending to ignore the obvious. Pretty sad.

Oct 11, 2013 6:46AM
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"What's going to happen to utility stocks if it's decided that climate change is real, and is caused by the burning of fossil fuels?" 

 

Climate change IS real. It IS caused by the burning of fossil fuels. We HAVE the ability to shift off them and there's no better time because we have an aged infrastructure and an idled on purpose fully capable workforce among the under and unemployed who would and could rebuild us without gas or oil dependency. Put the handheld devices down, kids... work to restore and recover FIRST, gratify yourself later.

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