With interest rates on safe money securities, from Treasurys to bank CDs, near zero, the editors at Forbes asked us to come up with a listing of dividend stocks appropriate for yield seeking retirees.
The list of stocks below contains our top picks based on our proprietary DividendRank model as well as a selection of high yielding picks from one of our sister Web sites, ValueForum.
ValueForum is an exclusive Web community of more than 1,200 investors where top members share investment advice and ideas. The picks below represent some of the best current ideas from the community. [More from Forbes: 25 best cities for an active retirement]
The first three stocks mentioned come from a proprietary screen developed by DividendChannel.com. Each month we cull from our universe of dividend paying stocks scanning a variety of financial data including dividend yield, book value, quarterly earnings and dividend history. We then rank the stocks according to their financial strength and valuation relative to other stocks in their industry.
1) The Number 1 DividendRanked DJIA Component
Chevron (CVX)
3.5% Yield
Chevron is engaged in petroleum, chemicals, and mining operations, power generation and energy services. [More from Forbes: 10 steps to get your retirement back on track]
Sector: Oil & Gas Refining & Marketing
Market Cap: $204.2B
Price to Book: 1.7
Forward PE: 7.6
Number of ETFs Holding CVX: 95 (see which ones)
2) The Number 1 DividendRanked Nasdaq 100 Component
Intel (INTC)
3.0% Yield
Intel designs and manufactures integrated digital technology platforms. The company's platforms are used in a range of applications, such as personal computers, data centers, tablets, smartphones, automobiles, automated factory systems, and medical devices.
Sector: Semiconductors
Market Cap: $139B
Price to Book: 3.0
Forward PE: 10.4
Number of ETFs Holding INTC: 101 (see which ones)
3) The Number 1 DividendRanked Dow Transports Components
Norfolk Southern (NSC)
2.6% Yield
Norfolk Southern controls a freight railroad, Norfolk Southern Railway Company. Norfolk Southern Railway Company is primarily engaged in the rail transportation of raw materials, intermediate products, and finished goods primarily in the Southeast, East and Midwest and, via interchange with rail carriers, to and from the rest of the United States [More from Forbes: 20 ways to lost your nest egg]
Sector: Railroads
Market Cap: $23.8B
Number of ETFs Holding NSC: 65 (see which ones)
Below are the selections from our sister site ValueForum.com.
BlackRock Build America Bond Trust (BBN)
Selected by David Folger
Build America bonds are munis that carry a Federal subsidies for interest. They were issued by states and the Federal subsidies were part of a stimulus program that was in place from near the beginning of 2009 to the end of 2010 when the last Build America bonds were issued.
These funds pay interest that is NOT tax free, and they are not guaranteed by the Federal Government. So investors must realize that there is some risk and information about credit ratings of the portfolios of the bond funds should be considered. [More from Forbes: How to start a conversation about estate planning]
These funds pay a bit more than 7% and are monthly payers. The NAV has risen quite nicely over the last year providing an additional return. The funds typically sell at a discount to NAV. As long as interest rates remain low, these funds should continue to do well.
David Folger holds a MS in Electrical Engineering from UC Berkeley and has worked in several Silicon Valley companies and as a computer industry analyst advising large IT organizations on information technology strategies. He invests in real estate as well as stocks and bonds.
American Capital Agency (AGNC), American Capital Mortgage (MTGE), MV Oil Trust (MVO), and Freeport-McMoRan Copper & Gold (FCX)
