Barrons Trend Spotting has Jason Pride of Glenmede giving some of dividend stock picks. Big Stocks With Plump Dividends

It looks like a good time to pick up some blue chips with nice dividends. Big stocks with stable payouts trailed smaller, riskier issues in the 2009 rebound, and some now trade at attractive prices.

Jason Pride, investment strategist at Philadelphia wealth manager Glenmede, cites McDonald's (MCD), helped by global consumer growth; Chevron (CVX), perhaps the strongest energy giant; and drug makers with undervalued pipelines, like Johnson & Johnson (JNJ) and Abbott Laboratories (ABT). All sport yields above 3%, histories of expanding payouts, and the cash to keep doing it.

Disclosure: The Div Guy owns shares of JNJ and ABT at the time of this post.

Barrons has an Investors' Soapbox by Credit Suisse. The Strongest Semiconductor Stocks

OUR GAP ANALYSIS EXAMINES semiconductor growth rates relative to end-market consumption based on indexed, quarter-over-quarter and year-over-year growth rates.

While any gap analysis has shortcomings, we view it as a useful albeit somewhat limited tool for gauging cycle dynamics. Included in our report is a company-by-company, end-market-by-end-market view of over- and undershipments, which should aid in finding alpha [outperformance].

The gap analysis supports our view that cycle risks are skewed meaningfully to end consumption and not supply. While the gap between semi shipments and end-demand has closed from a peak of 21.9 points in first-quarter 2009 to 6.3 points in first-quarter 2010, our data suggest that semis continue to undership end-demand
and without an above-seasonal second half are likely to undership throughout all of 2010.

By company from best to worse: National Semiconductor (NSM), Intersil (ISIL), Fairchild Semiconductor International (FCS) and Intel
(INTC) screen well.

Disclosure: The Div Guy owns shares of INTC at the time of this post.

There have been some brokerage companies that have recently lowered their stock trades to $7. I have been using Zecco for over three years year now and I have to say I have been very pleased with my Zecco account and would recommend Zecco to anyone who wants to save money on stock trades. Here is a review of Zecco.

Cost Stock trades are $4.50 each and ZERO for the first ten trades a month for account holders with over $25,000 in assets with Zecco. I had been using Scottrade in the past and was happy with the service but enjoy the lower cost of trades.

Flexibility in trading I love the ability to make small purchases to help create a well diversified portfolio with a limited amount of assets. I can use dividends from a couple of my large stocks to make purchases into new holdings, again allowing to diversify my portfolio at no cost.

Ease of use Once you are logged into the Trading Center there is a simple to use Stock Order Entry. You enter the stock symbol, buy or sell and the number of shares. It also allows limit orders on this same entry form.

Trading Tools They now offer S&P Stock Reports for free as well as Stock Alerts and Analyst Upgrades/Downgrades, Streaming Quotes, Stock Screener and Interactive Charts.

Customer Service The customer service I have received has been satisfactory. I had a question which I submitted via email that was answered the next day. I also transferred stocks from Scottrade via ACAT and the process was very smoothly and took about two weeks. I also enjoy the ACH bank transfers to and from my Zecco account which are free.

Overall I have to say I have been very pleased with my Zecco account. I would recommend Zecco to anyone wanting to lower their cost of trading. Happy Trading.

The Div Guy has not been compensated for this post.

SmartMoney has article by Andrew Bary about two bank stocks that are lagging the rest of the banking sector. These stocks have been long term top performing stocks that are having a hard time with the current low short term interest rate environment. The Virtues of Slow and Sturdy

Two Laggards in the surging banking sector, Bank of New York Mellon and State Street, have some of the industry's best franchises, and should benefit from the inevitable rise in short-term interest rates.

Both look reasonably priced. BNY Mellon (BK), at 32, trades for 14 times projected 2010 profits of $2.34 a share while State Street (STT), at 48, commands 14 times estimated 2010 profits of $3.37 share. Both stocks trade for about 12 times projected 2011 earnings, well below their historic price/earnings ratios in the mid- to high teens.

Bulls argue that the stocks look appealing at a time when institutional investors are shunning defensive names in favor of more direct beneficiaries of a stronger economy. In the banking sector, turnaround stories are in vogue, including giants Citigroup (C), Bank of America (BAC), and regionals like Zions Bancorporation (ZION), SunTrust Banks (STI) and Regions Financial (RF), all of which were struggling with loan problems a year ago.

Financial stocks often face headwinds when rates rise, but BNY Mellon and State Street are part of a group of financials -- including discount brokers like Charles Schwab (SCHW) and TD Ameritrade (AMTD) -- that should get a boost from higher rates. BNY Mellon has estimated that a one-point rise in short rates would boost pretax profits by $500 million annually, or about 30 cents a share.

With the economy recovering and the stock market rallying, the Federal Reserve may start increasing short rates sooner rather than later this year. Near-zero short rates, for instance, have depressed profits in such areas as asset management and securities lending. BNY Mellon has been giving fee rebates to investors in short-term money-market funds that now yield next to nothing. Those rebates would decline as short rates rise.

"There aren't many dominant international companies that you can buy at these valuations," says analyst Eric Goldberg of Basswood Partners, a New York investment firm that owns BNY Mellon and State Street shares. "These are some of the highest-return businesses in banking, and their growth prospects are better than that of the typical commercial bank. It's almost unfair to compare them to banks." He puts fair value for BNY Mellon at about $52 a share and $80 for State Street.

The banks engage in similar businesses, as securities servicers and asset managers. BNY Mellon is the top global custodian, with $22 trillion of assets under administration. State Street is the No. 2 custodian, and its State Street Global Advisors is a leading investment manager, with $1.9 trillion in assets, including a strong position in exchange-traded funds. These custody businesses may not be exciting, but they benefit from oligopolistic market structures and prohibitive barriers to entry.

Disclosure: The Div Guy does not own shares of BK or STT at the time of this post.

The 2010 Retirement Confidence Survey released in March by the Employee Benefit Research Institute has some very interesting news on retirement savings. I find it interesting to see so few people are saving and how little they have saved for retirement. Here is the press release sent out in March.

WASHINGTON—Americans’ confidence in their ability to retire appears to be stabilizing, now that the economic volatility of the recession has abated, but their self-described preparations for retirement continue to erode, according to the 2010 Retirement Confidence Survey (RCS) released today by the nonpartisan Employee Benefit Research Institute (EBRI) and Mathew Greenwald and Associates, a market research firm.

However, the RCS also finds that a growing number of American workers are also planning to delay retirement—which has negative implications for the U.S. job market, where unemployment is high and layoffs continue to grow. As older workers stay at their jobs longer, the RCS results suggest that fewer existing jobs are likely to open up.

And Americans continue to lack confidence in institutions. They are most likely to express confidence in private employers and least likely to express confidence in the federal government. Both workers and retirees expressing low levels of confidence in banks and insurance companies.

“Americans’ attitudes toward retirement have clearly tracked the economy the last couple of years, and that seems to be the case in 2010,” said Jack VanDerhei, EBRI research director and co-author of the survey. “Unfortunately, while their attitudes are stabilizing, their preparation for retirement is not. A distressing number of people have no savings at all.”

The 2010 RCS marks the 20th wave of this survey, which is the longest-running public opinion study of its kind on Americans’ attitudes on retirement and savings. The survey is co-sponsored by EBRI and Mathew Greenwald and Associates, which fielded the questions in January. More than 30 organizations provided funding for this year’s survey, which is online at http://www.ebri.org/ In addition to looking at long-term trends on workers pushing back their expected retirement age—which had been steadily growing even before the recent economic recession—this year’s RCS also reveals several other major trends that this unique survey has been tracking over the past two decades. Among the survey’s key points:

• Stabilizing confidence: The percentage of workers very confident about having enough money for a comfortable retirement remains steady at 16 percent, which is statistically equivalent to the 20-year low of 13 percent measured in 2009. Retiree confidence about having a financially secure retirement has also stabilized, with 19 percent saying now they are very confident (statistically equivalent to the 20 percent measured in 2009).

• Basic expenses: Worker confidence about paying for basic expenses in retirement has rebounded slightly, with 29 percent now saying they are very confident about having enough money to pay for basic expenses during retirement (up from 25 percent in 2009, but still down from 34 percent in 2008). The percentage of retirees indicating they are very confident about paying for basic expenses has stayed level at 33 percent (statistically equivalent to the 34 percent observed in 2009).

• Financial aspects of retirement: The percentages of workers very confident about other financial aspects of retirement have held steady at 12 percent for medical expenses, 10 percent for long-term care expenses, and 21 percent for doing a good job of preparing for retirement. However, the percentages not confident continue to creep upward, from 44 percent in 2009 to 51 percent in 2010 for medical expenses, from 56 percent to 61 percent for long-term care expenses, and from 30 percent to 35 percent for doing a good job of preparing for retirement.

• Fewer are saving: Fewer workers report that they and/or their spouse have saved for retirement (69 percent, down from 75 percent in 2009 but statistically equivalent to 72 percent in 2008). Moreover, fewer workers say that they and/or their spouse are currently saving for retirement (60 percent, down from 65 percent in 2009 but statistically equivalent to percentages measured in other years).

• Ranks of those with no savings are growing: An increased percentage of workers report they have virtually no savings and investments. Among RCS workers providing this type of information, 27 percent say they have less than $1,000 in savings (up from 20 percent in 2009). In total, more than half of workers (54 percent) report that the total value of their household’s savings and investments, excluding the value of their primary home and any defined benefit plans, is less than
$25,000.

• Workers postponing retirement: One-quarter of workers (24 percent) report they have postponed their planned retirement age in the past year. Among the reasons cited for delaying retirement are the poor economy (29 percent of those postponing retirement), a change in their employment situation (22 percent), inadequate finances (16 percent), and the need to make up for losses in the stock market (12 percent).

• Later retirement expected: Although the age at which workers report they expect to retire shows little change from 2009, a longer-term look finds significant change. In particular, the percentage of workers who expect to retire after age 65 has increased over time, from 11 percent in 1991 to 14 percent in 1995, 19 percent in 2000, 24 percent in 2005, and 33 percent in 2010.

• Institutional confidence: Americans continue to lack confidence in institutions. They are most likely to express confidence in private employers (23 percent of workers and 27 percent of retirees very confident) and least likely to feel confidence in the federal government (11 percent of workers and 8 percent of retirees). Just 19 percent of workers and 22 percent of retirees report they are very confident about banks, while 12 percent of workers and 13 percent of retirees say they are very confident about insurance companies. Moreover, the percentages of retirees somewhat confident about banks (45 percent, down from 51 percent in 2009), insurance companies (42 percent, down from 56 percent), and the federal government (30 percent, down from 45 percent) are declining.

• Clueless about savings goals: Many workers continue to be unaware of how much they need to save for retirement. Less than half of workers (46 percent) report they and/or their spouse have tried to calculate how much money they will need to have saved by the time they retire so that they can live comfortably in retirement.

• Some reality testing on savings needs: The savings goals cited by workers who have done a retirement needs calculation have increased over time. In the 2000 RCS, 31 percent said they needed to accumulate at least $500,000 for retirement. This percentage gradually increased to 43 percent in 2005 and 54 percent in 2010.

• Investing confidence ticks up: Those who have saved for retirement have recovered some confidence in their ability to invest their savings wisely. Thirty-two percent of workers indicate they are very confident (up from 24 percent in 2009) and another 54 percent are somewhat confident. Retirees who have saved for retirement show a similar rebound in confidence that they are investing their savings wisely, with 82 percent saying they are very or somewhat confident (up from 70 percent in 2009).

• Sources of retirement income: Over time, the RCS has observed changes in workers’ expected sources of retirement income. In particular: fewer workers are expecting to receive retirement income from Social Security (77 percent, down from 88 percent in 1991) and defined benefit plans (56 percent, down from 62 percent in 2005). However, more workers report they will rely on employer-sponsored retirement savings plans (75 percent in 2010, up from 69 percent in 2005) and employment income (77 percent, up from 70 percent in 2005).

• Guaranteed income products: Few workers report they are likely to purchase a financial product or select a retirement plan option that pays them guaranteed income each month for the rest of their life. Only 11 percent indicate they are very likely to do so, while 35 percent say they are somewhat likely. Only 14 percent of retirees report they purchased a guaranteed-income product or selected a guaranteed-income option from a retirement plan.

Barrons has a very good article By Johanna Bennett that screens S&P 500 stocks looking for dividend paying stocks that have rising earnings and room to increase their dividend. 5 Dividend Stocks With Some Extra Kick

WITH U.S. FIRMS ROLLING IN dough, the idea of investing in stocks with growing dividends just never grows old.

Seventy-five members of the Standard & Poor's 500 hiked their dividends payments during the first quarter of 2010, a $4.4 billion net increase and a stark contrast to the $39 billion decline during the same period last year.

Corporate America's balance sheets are flush with roughly $3.1 trillion in liquid assets. And with profits rebounding, still more companies could hike dividends in 2010, some quite sizably.

That's good news for investors rebuilding decimated retirement portfolios. But facing the possibility of a large tax hike next year, investors need more than fat dividend checks.

"Dividends matter, but so do capital gains," says Cliff Remily, manager of the Thornburg Investment Income Builder Fund.

To identify a handful of dividend stocks with the potential for decent capital appreciation, Barrons.com came up with a broad list of 80 members of the S&P 500 -- excluding financials -- with the following conditions: dividend yields above 1.8%, rising earnings, and a dividend that was less than 60% of operating profit.

Among the group, Baxter International (BAX), Texas Instruments (TXN), Mattel (MAT), Clorox (CLX) and Becton, Dickinson & Co. (BDX) are poised for generous gains in their share price, as well as robust dividend hikes in 2010.

Shortchanged by last year's stock-market rally, dividend payers typically generate better returns in the later stage of a bull market.

A rising payout signals management's confidence in future prospects.

Howard Silverblatt, S&P's senior index analyst, sees dividend hikes surging in the third quarter. In all, payouts among S&P 500 companies should rise 5.6% this year.

"Companies growing in line with the S&P 500 aren't tremendously exciting, but double-digit dividend and earnings growth is significant," says Jeff Krumpleman, head of the dividend growth investment team at Hilliard Lyons Capital Management.
At a yield of 1.9%, Becton Dickinson has the longest history of dividend hikes -- 37 years. Known for making everyday hospital supplies, Becton's earnings climbed during the recession and should increase 11% annually over the next several years. Over the last 12 months, the stock has lagged gains by the S&P 500. But Don Taylor, manager of the Franklin Rising Dividends Fund, expects the stock to climb 20% over the next 12 months, and sees a 10% to 15% dividend hike this year.

Equally shortchanged by the stock-market rally, Baxter could deliver similar returns. Diverse sales, overseas markets and new products position the medical-product company for sizable growth. That and hopes for a midteens dividend boost and 20% capital gains over the next 12 months, led Barrons.com to write favorably about the stock last month (see Weekday Trader, "Baxter International Has Room to Run," March 3, 2010).

Other dividends could grow much faster. At 3.2%, toy-making giant Mattel last raised its payout in 2007 following a massive recall. Up 88% over the last 12 months, the stock reflects soaring earnings fueled by improving sales of the iconic Barbie doll, cost cuts and a better toy lineup. Still, the share price could climb another 20% in the next year. And Brian Campbell, a portfolio manager with Hilliard Lyons, says he "wouldn't be shocked" to see Mattel's annual dividend payment climb this year from 75 cents a share to almost $1 a share.

At 3.1%, Clorox, the consumer-products giant famed for its iconic laundry bleach, has hiked its dividend every year since 1977. Profit poised to grow in the double digits this year and a fat dividend were touted when Barrons.com wrote bullishly about the shares in February (see Weekday Trader, "A Bright Future for Clorox Shares," Feb. 25, 2010.) Still, the stock trades near a record-low multiple.

And finally, there's semiconductor giant Texas Instruments, which pays a 1.9% yield. The annual cash payment to investors has increased fivefold over the last five years. The balance sheet is rock solid. Profit is poised to grow for the first time since 2007. The company, however, still has "lots of room to raise the dividend without penalizing reinvestment," says Richard Helm, a portfolio manager with Cohen & Steers.

Of course, a long history of increasing dividends doesn't guarantee future hikes.

Nevertheless, at many big companies, dividends -- and dividend hikes -- remain something you can take to the bank.

Disclosure: The Div Guy owns shares of BDX at the time of this post.

Here are the top 20 stocks in my Dividend Portfolio as of 4/30/10 ranked by size of holdings. I know some if these stocks no longer pay dividends but I have keep them for gains as the economy recovers. I will look to sell my stocks that are no longer paying dividends throughout 2010.

1. Kinder Morgan Energy (KMP) USA
2. DCP Midstream Partners (DPM) USA
3. Barclays PLC (BCS) UK
4. HRPT Properties Trust (HRP) USA
5. Penn West Energy Trust (PWE) Canada
6. General Electric Company (GE) USA
7. Procter & Gamble (PG) USA
8. Johnson & Johnson (JNJ) USA
9. American Capital (ACAS) USA
10. ONEOK, Inc. (OKE) USA
11. Aircastle Limited (AYR) USA
12. Diana Shipping Inc. (DSX) Greece
13. Banco Santander (STD) Spain
14. GlaxoSmithKline (GSK) UK
15. Exxon Mobil Corporation (XOM) USA
16. Pepsi (PEP) USA
17. Abbott Labs (ABT) USA
18. Unilever NV (UN) Netherlands
19. Becton, Dickinson (BDX) USA
20. Newell Rubbermaid (NWL) USA

Here are the top 20 holdings of the Aston/River Road Dividend All Cap Value Fund (ARDEX) as of March 31, 2010

1. Waste Management (WM) USA
2. Automatic Data Processing (ADP) USA
3. Kimberly-Clark (KMB) USA
4. Cracker Barrel Old Country (CBRL) USA
5. Clorox Company (CLX) USA
6. Sysco (SYY) USA
7. Pepsico (PEP) USA
8. McCormick & Co (MKC) USA
9. General Mills (GIS) USA
10. Intel (INTC) USA
11. Cincinnati Financial (CINF) USA
12. Verizon Communications (VZ) USA
13. Genuine Parts (GPC) USA
14. United Parcel Service (UPS) USA
15. Johnson & Johnson (JNJ) USA
16. RPM International (RPM) USA
17. Chubb (CB) USA
18. ConocoPhillips (COP) USA
19. People's United Financial (PBCT) USA
20. Spectra Energy (SE) USA

My Annualized Dividend Income as of the end of April increased to $5,865 from $5,760 for the month. This means my dividend stocks will pay $5,865 in dividends over the next 12 months.

I made a few dividend stock purchases over the past month from dividend distributions and sales of non dividend stocks. It looks like the economy has bottomed out and we had no more dividend cuts the last few months. There has also been a few companies increasing their dividends for later this year.

My Dividend Income Goal for the end of 2010 is $6,000. I plan to sell of some stocks that are no longer paying dividend throughout the year and add a few hundred dollars a month to our dividend paying stocks.

Most of my stocks are held in my Zecco Trading account and the rest are DRIPs. The dividends from my stocks are reinvested but I am keeping track of the amount of income I could receive once I retire or choose to receive the dividends in cash.

I will post my Top 20 Stock Holdings on Wednesday.

As of the end of April our Net Worth increased to $839,955 from $817,000 for the month which is a 2.81% increase. The stock market has put together a few good months and we are now at a high since our all time high of $849K in October 2007.

The breakout is as follows:
ASSETS
Retirement Accounts $426,715
Taxable Accounts $139,760
Cash $23,391
Home $205,000
Cars $7,800
Personal Property $3,000
Kids 529 Accounts $34,289

Here is the summary for this month:

The market continues to rebound and we continue to purchase additional stock this year. Our Net Worth increased the past month due to an increase in the stock market. We are still debt free since we paid off our credit card debt. We will continue to use our credit cards for rewards but payoff the balances each month. I received $94 in dividends for the month and have used the cash from these dividends to make additional stock purchases of our dividend stocks but I have not been adding much extra money.

We will be building up our cash over the next few months to increase our cash reserves. You can click on my Net Worth graph on the right to see the changes in each category from the previous month. I continued funding our Roth IRA's each month.

I will post my Dividend Income Update on Tuesday.