Value Investing News

Once a company reaches a certain size, significant growth is difficult to sustain. Knowing this, savvy investors looking for growth will turn to small-cap stocks. This week week, I screened my dividend growth stocks database for Small- and Mid-Cap stocks with a yield and dividend growth at or above 4%. The results are presented below:

Advertisement:

From the time the first fire was discovered until now, energy has played a critical role in the development of modern man. As our society has developed, we have require an increasingly large amount of energy. We rely on companies in the Energy Sector to supply our needs.This sector will only become more valuable as time passes and resources become more scarce.

Advertisement:

Information is powerful, but its sheer volume can be overwhelming. Screens and filters allow us to condense vast amounts of data into the targeted information we are looking for. It seems that yield is always on the mind of income investors, so I decided to screen first on yield and present the 10 highest yielding stocks in my database:

Advertisement:

The latest 10-K filing by BUCKEYE PARTNERS, L.P.

The latest 10-K filing by BUCKEYE PARTNERS, L.P.

It’s human nature for new income investors to focus on yield. Many eventually learn that above average yields often carry an above average risk of a dividend cut, loss of invested capital or both. People involved in extreme sports/hobbies, such as base jumping, hang gliding and shark diving, do things to minimize risk and protect themselves.

As dividend growth investors we understand the danger of focusing on high yield alone. Many, if not most, high yields are simply not sustainable over the long term. However, we often turn our heads to what can be an equally dangerous metric – high dividend growth rates. Like high yields, high dividend growth rates often are not sustainable.

This is the fifth installment in a multi-part series that looks at various options used by income investors to boost their yield while waiting for dividend growth to lift their portfolio’s overall yield-on-cost. Last week we looked at Bonds. This week we are looking at Master Limited Partnerships (MLPs).