Some dividend stocks aren't great, and some are just plain bad. Some dividends themselves aren't sustainable, while some aren't even worth your time. But let's look at two stocks that offer yields near 3% and may offer even more upside with the stock prices themselves: Caterpillar (NYSE: CAT ) and Ford (NYSE: F ) .
Caterpillar (NYSE: CAT ) trades at a P/E of 9.5, which is below the industry average of 12 and even further below its historical average of around 16. Ford (NYSE: F ) trades at a ratio of 9, which is drastically below its industry average of 31 and under half of what competitors Toyota and Honda trade at.
Let's look at Ford first.
Ford
Ford is a great turnaround story, having rebounded from losses of more than $30 billion in the 2006-08 period to become profitable today. It got there without a bailout, unlike its Detroit peers, and that has helped it maintain a favorable brand image. Since the recession, it's estimated that Ford has been able to lower operating costs and grow its economies of scale enough that it's estimated to be able to break even in an environment of 10 million vehicle sales a year, even as sales are expected to reach 15.4 million in the U.S. this year.
Top 10 Dow Dividend Companies For 2014: Cardinal Health Inc. (CAH)
Cardinal Health, Inc. operates as a healthcare solutions company that provides health care products and services. The company operates in two segments, Pharmaceutical and Medical. The Pharmaceutical segment distributes branded and generic pharmaceutical, over-the-counter healthcare, specialty pharmaceutical, and consumer products to retail customers, hospitals, and alternate care providers in the United States and Puerto Rico. This segment also operates nuclear pharmacies and cyclotron facilities that prepare and deliver radiopharmaceuticals for use in nuclear imaging and other procedures in hospitals and clinics; offers third-party logistics support services; franchises retail pharmacies under the Medicine Shoppe and Medicap brands; and provides pharmacy and pharmaceutical repackaging services, as well as other services comprising distribution, inventory management, data/reporting, new product launch support, and contract and chargeback administration. The Medical segment distributes a range of medical, surgical, and laboratory products to hospitals, surgery centers, laboratories, physician offices, and other healthcare providers. This segment also develops, manufactures, and sources medical and surgical products, including sterile and non-sterile procedure kits; single-use surgical drapes, gowns, and apparel; exam and surgical gloves; and fluid suction and collection systems. Its medical and surgical products are sold directly or through third-party distributors in the United States, Canada, Europe, South America, and the Asia/Pacific region. The company was founded in 1979 and is headquartered in Dublin, Ohio.
Advisors' Opinion:- [By Jonas Elmerraji]
Pharmaceutical and medical instrument distributor Cardinal Health (CAH) is the middleman between pharma firms and the pharmacies and hospitals that sell drugs directly to consumers. When a retail pharmacy needs inventory, for instance, it turns to Cardinal's network to get warehoused and repackaged drugs -- sparing either of the other parties from needing expertise in those tasks.
That's a good business -- if you can get it. Because Cardinal doesn't really have an economic moat, its profits are pretty highly scrutinized by both the pharmaceutical firms and the pharmacies. Theoretically, if being the middleman is too lucrative, then someone else can step in to do it cheaper. But Cardinal's big advantage is scale. Because firm boasts enormous clients like CVS Caremark (CVS) and Walgreen (WAG), CAH can focus on efficiency and keep its costs lower than any individual smaller rival. So while Cardinal's net margins weigh in at right around one percent, it's earning one percent on almost $110 billion a year.
Cardinal's balance sheet is in solid shape, with total debt almost completely offset by cash on hand. The firm's impressive cash flow generation means that Cardinal can pay out a consistently strong dividend in spite of its paper-thin margins. While this firm may not have a moat, its business is less easily replicated than it may seem at first glance.
Top 10 Dow Dividend Companies For 2014: Ranaz Corporation (RNZ.V)
Ranaz Corporation engages in the design, development, manufacture, distribution, and marketing of diet and energy products in North America and Europe. The company offers nutritional, protein, and dietary supplements under private brands, as well as its own corporate brands. Its products include Protidiet, a weight loss product, which is offered in various ready-to-eat formats, such as bars, powders, soups, cookies, concentrates, muffins, and other protein meals and snacks; and ProtiLife, a weight loss and weight maintenance product that is offered in protein powder mixes and bar formats. The company serves pharmacies and parapharmacies, medically supervised clinics, big-box stores, and commercial weight loss chains and shops specializing in obesity treatments. Ranaz Corporation was founded in 1989 and is headquartered in Saint-Eustache, Canada.
Top 5 Biotech Stocks To Buy Right Now: Protective Life Corporation(PL)
Protective Life Corporation and its subsidiaries engage in the production, distribution, and administration of insurance and investment products in the United States. Its Life Marketing segment markets universal life, variable universal life, level premium term insurance, and bank-owned life insurance products primarily through a network of independent insurance agents and brokers, stockbrokers, and independent marketing organizations. The company?s Acquisitions segment focuses on acquiring, converting, and servicing life insurance policies and annuity products sold to individuals, which are acquired from other companies. Its Annuities segment markets variable annuity products that offer the policyholder the opportunity to invest in various investment accounts; and fixed annuity products, such as modified guaranteed annuities, single premium deferred annuities, single premium immediate annuities, and equity indexed annuities primarily through broker-dealers, financial ins titutions, and independent agents and brokers. The company?s Stable Value Products segment offers guaranteed funding agreements to special purpose entities; fixed and floating rate funding agreements directly to the trustees of municipal bond proceeds, institutional investors, bank trust departments, and money market funds; and guaranteed investment contracts to qualified retirement savings plans. Its Asset Protection segment primarily markets extended service contracts, and credit life and disability insurance to protect consumers? investments in automobiles, watercraft, and recreational vehicles; and markets a guaranteed asset protection product primarily through a national network of approximately 3,750 automobile, marine, and recreational vehicle dealers. The company was founded in 1907 and is headquartered in Birmingham, Alabama.
Top 10 Dow Dividend Companies For 2014: Arm Holdings(ARM.L)
ARM Holdings plc, together with its subsidiaries, engages in the design of microprocessors, physical IP, and related technology and software; and sale of development tools to enhance the performance of high-volume embedded applications. Its products include microprocessors cores, such as specific functions comprising video and graphics IP, fabric IP, embedded software, and configurable digital signal processing IP; physical IP components for the design and manufacture of integrated circuits, which comprise embedded memory, standard cell, and input/output components; software development tools that help software design engineers in the design and deployment of code, from applications running on open operating systems to low-level firmware. The company also offers support, maintenance, and training services, as well as design consulting services. ARM Holdings plc licenses and sells its technology and products to electronics companies, which in turn manufacture, market, and s ell microprocessors, application-specific integrated circuits, and application-specific standard processors to systems companies for incorporation into various end products, as well as licenses and sells development tools directly to systems companies and provides support services to licensees, systems companies, and other systems designers. It operates in Europe, the United States, and the Asia Pacific. The company was formerly known as Advanced RISC Machines Holdings Limited and changed its name to ARM Holdings plc in March 1998. ARM Holdings plc was founded in 1990 and is based in Cambridge, the United Kingdom.
Top 10 Dow Dividend Companies For 2014: Kenmare Res(KMR.L)
Kenmare Resources plc, together with its subsidiaries, operates as a mining and exploration company. The company principally engages in the operation of the Moma Titanium Minerals mine, which is located on the north east coast of Mozambique. It sells a range of ilmenite, rutile, and zircon to the producers of titanium dioxide pigment, zircon millers, and specialized manufacturers supplying niche markets. The company was founded in 1972 and is based in Dublin, Ireland.
Top 10 Dow Dividend Companies For 2014: Rugby Mining Limited(RUG.V)
Rugby Mining Limited engages in the identification, acquisition, exploration, and development of mineral resource properties. The company primarily explores for porphyry gold-copper, silver, and iron ores. It has options to acquire a 90% interest in the Hawkwood project located in Queensland, Australia; an 80% interest in the Mabuhay project situated in the Philippines; a 60% interest in the Comita project located in the western cordillera of Colombia; and a 100% interest in the Interceptor project situated in Catamarca Province, Argentina. The company was formerly known as Carlyle Mining Corp. and changed its name to Rugby Mining Limited in March 2009. Rugby Mining Limited is headquartered in Vancouver, Canada.
Top 10 Dow Dividend Companies For 2014: Vitesse Semiconductor Corporation(VTSS)
Vitesse Semiconductor Corporation engages in the design, development, manufacture, and marketing of semiconductor products to original equipment manufacturers (OEMs) of carrier and enterprise networking products, and data center infrastructure systems worldwide. It offers a line of Ethernet switching products consisting of carrier Ethernet switch engines for customer premise equipment, access network equipment, wireless base stations, mobile access equipment, fiber and microwave wireless backhaul equipment, and metro networking equipment; and Ethernet switches that enable desktop, workgroup, and LAN infrastructure. The company also provides Ethernet media access controllers that offer addressing and channel control mechanisms and are used in enterprise class modular Ethernet switch platforms, as well as in Ethernet-over-SONET/SDH and Ethernet-over-OTN systems used in access, metro, and long-haul carrier networking systems; Ethernet transceivers, including single, quad, and octal devices that allow the transmission of 10/100/1000 BASE-T data over category 5 copper cable and fiber optic cabling for use in personal computers, home electronics, and LAN applications; and Ethernet transceivers with packet timing and synchronization capabilities. In addition, it provides a line of connectivity products, which comprise mixed-signal physical media devices, physical layer devices, crosspoint switches, and signal integrity devices that are used for the connection of systems via optical fiber, copper cable, or backplanes. Further, the company offers a range of transport processing products, such as framers, mappers, and switches, which support data rates up to 10 Gbps for SONET/SDH, EoS, and OTN applications. It markets and sells its products directly to OEMs and original design manufacturers, as well as through third-party electronic component distributors and manufacturing service providers. The company was founded in 1984 and is headquartered in Camar illo, California.
Top 10 Dow Dividend Companies For 2014: Anthera Pharmaceuticals Inc.(ANTH)
Anthera Pharmaceuticals, Inc., a development stage biopharmaceutical company, focuses on developing and commercializing therapeutics to treat diseases associated with inflammation, including cardiovascular and autoimmune diseases. Its primary product candidates include varespladib methyl (A-002), which has completed its Phase 2 clinical studies for the treatment of acute coronary syndrome; varespladib sodium (A-001) that is in a Phase 2 clinical study for the prevention of acute chest syndrome associated with sickle cell disease; and A-623, which has completed Phase 1 clinical studies for the treatment of B-cell mediated autoimmune diseases. The company has license agreements with Eli Lilly and Company, and Shionogi & Co., Ltd. to develop and commercialize secretory phospholipase A2 or sPLA2 inhibitors for the treatment of cardiovascular disease and other diseases; and Amgen Inc., to develop and commercialize A-623. Anthera Pharmaceuticals, Inc. was founded in 2004 and is headquartered in Hayward, California.
Top 10 Dow Dividend Companies For 2014: Augusta Resource Corp (AZC.TO)
Augusta Resource Corporation, a development stage company, engages in the acquisition, exploration, and development of natural mineral resource properties in North America. Its principal asset includes the 100% owned Rosemont project, a copper mining project with copper/molybdenum/silver skarn deposits, as well as other exploration targets comprising approximately 17,500 acres (7,080 hectares) of patented and unpatented claims, and fee land and surface grazing rights located in Pima County, Arizona. The company was formerly known as Hol-Lac Gold Mines, Limited and changed its name to Augusta Resource Corporation in July 1997. Augusta Resource Corporation was founded in 1937 and is headquartered in Vancouver, Canada.
Top 10 Dow Dividend Companies For 2014: MoSys Inc.(MOSY)
MoSys, Inc., together with its subsidiaries, designs, develops, markets, and licenses embedded memory intellectual property (IP) for systems on chips (SOCs) designs. It provides a semiconductor memory technology, 1T-SRAM, which offers a combination of high density, low power consumption, and high-speed; and licenses this technology to companies that incorporate or embed memory on integrated circuits (ICs), such as system-on-chips. The company also designs, develops, markets, and licenses high-speed parallel and serial interface IP that includes physical layer circuitry, which allows ICs to communicate with each other or to discrete memory devices in networking, storage, computer, and consumer devices. Additionally, it supports serial I/O technologies, such as 10G KR, XAUI, PCI Express, and SATA, as well as parallel interfaces comprising DDR3. MoSys, Inc. offers its memory and I/O IP technologies to semiconductor companies, electronic product manufacturers, foundries, intel lectual property companies, and design companies through product development, technology licensing, and joint marketing relationships. It operates in Japan, the United States, Taiwan, and rest of Asia. The company was founded in 1991 and is headquartered in Santa Clara, California.
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