Dividend Stocks 2012:3 Health Care Plays With Healthy Dividends

Heath care stocks are the no-brainer demographic trend that every investor should take advantage of.
The aging baby boomers will demand more services, prescriptions and medical care. Health care is recession-proof, since people rarely will cut back on their quality of life even if money is stretched thin. The big-picture reasons go on and on.
Perhaps the most compelling case for investors can be seen in the recent performance of health care-focused funds. The Vanguard Health Care ETF (NYSE:VHT) and the iShares Dow Jones US Healthcare ETF (NYSEARCA:IYH), for instance, have both doubled the returns of the Dow Jones Industrials in the last year — with roughly 12% gains over the benchmark index’s 6% rise. They also blow away the measly 2% tallied by the S&P 500 in the last 12 months.
The only downside for buy-and-hold investors is the distributions, or dividends, paid by these ETFs. While 1.4% for the iShares health care ETF and 1.6% for the Vanguard health care ETF aren’t terrible, those yields are hardly attractive when you consider many picks in the sector boast dividends well over 3% and sometimes even topping 4%.
Also, health care could always take a hit in 2012 and beyond. The sector isn’t immune to broader economic troubles, even if it is relatively insulated. Specific challenges also confront many health care subsectors — patent expirations for Big Pharma stocks like Eli Lilly (NYSE:LLY), Pfizer (NYSE:PFE) and Merck (NYSE:MRK) being the most obvious.
But if you do your research, you can find a number of health care picks that seem to be great long-term investments. Here are three. Not only are they relatively low-risk, each of them pays a plump dividend with a yield of more than 4%.

Dividend Stocks 2012 - HCP

HCP (NYSE:HCP) is a real estate investment trust (REIT). I know what you’re thinking: What does real estate have to do with health care? Well, HCP invests primarily in senior housing, medical office buildings and hospitals. That means it’s well positioned not just in terms of growth in the health care business but also because it will be a powerful dividend payer.
That’s because REITs deliver 90% of their taxable income back to shareholders according to federal law. They do this via big dividends — currently a yield of 4.6% in HCP’s case.
This is a sleepy play that certainly won’t deliver massive growth. REITs aren’t set up that way. But if you’re looking for a solid dividend payer that will ride the rising tide in health care, consider HCP. The stock is up 13% in the last 12 months, double the Dow Jones Industrials. It’s also up 40% since January 2010, vs. just 25% for the benchmark index.

Dividend Stocks 2012 - Meridian Bioscience

As a provider of diagnostic test kits, Meridian Bioscience (NYSE:VIVO) is in the business of screening for diseases to help treat them or prevent breakouts. The rhetoric about growing health care costs and how “an ounce of prevention is worth a pound of cure” seems to align perfectly with Meridian’s business model, making it a good candidate for a long-term buy.
The company is admittedly a bit riskier than larger picks in the sector, of course. It has a market cap of only about $800 million. Also, VIVO shares flopped big-time during the volatility of last summer, and they remain off about 33%. The company has run into short-term headwinds, too, having missed its earnings targets for the quarter just recently.
However, Meridian’s quarterly revenue was up 8% year-over-year in its most recent earnings report, and full-year revenue for fiscal 2011 was up almost 12%. Yes, profits were flat — but the company has zero long-term debt and remains soundly profitable.
With a 4% dividend and safe operations like that, you may want to consider a long-term play in Meridian to see what else this company has coming down the pipeline in the next few years.

Dividend Stocks 2012 - Lincare

Lincare Holdings (NASDAQ:LNCR) is a leading provider of in-home care, which includes oxygen tanks and other respiratory gear. Lincare serves about 750,000 customers nationwide.
Thanks to the demographics fueling in-home care — many more patients to serve and a system that prefers to keep those patients at home for treatment — Lincare has posted seven straight quarters of year-over-year revenue growth. Its earnings have risen by about 45% from fiscal 2009 through its just-completed 2011 fiscal year. Despite this growth, it’s priced at a reasonable P/E of around 11 right now.
The possibility of Medicare reimbursement changing and some general competitive challenges are concerns that could hold Lincare back. In fact, Deutsche Bank just downgraded the stock to hold in January in advance of Lincare’s Feb. 6 earnings announcement.
However, the home-care business seems the perfect growth opportunity as baby boomers age, and the nice 3.1% dividend will tide you over while you watch and wait.

Hot Stocks For 2012

Hot Stocks For 2012: Alcoa(AA_)

Let's start off with a bang. With just a $14 billion market cap -- and being the leading independent producer of a metal that will be in intense demand in 2012 because of boosted aerospace, autos and power plant production -- Alcoa will be hard-pressed to stay independent. Earnings have been depressed throughout the downturn, but the cash flow has picked up, courtesy the excellent stewardship of CEO Klaus Kleinfeld. If the company stands alone its stock can advance and get a 12 multiple, a slight discount to many of the cyclical stocks in the average, and that would put it at $18. But I think it gets bought out at $22, a fabulous return and perhaps my favorite in the whole average.

Hot Stocks For 2012: Bank of America(BAC_)

The bank will settle the mortgage putback claims, put a lot of its bad mortgage loans behind it and have an assertive Merrill Lynch to boost its earnings. I think that this company, which trades basically at its cash value, will have a terrific year, especially because CEO Brian Moynihan should be growing into his role and become more of a spokesperson that can help this riddled brand. The integration of the three companies, original Bank of America - itself a pastiche of many banks including Nations and Fleet, where Moynihan's from -- Countrywide and Merrill Lynch will finally be consummated in 2012. Glorious. Don't forget that despite all of the turmoil, Bank of America now has an unheard-of 20%-plus market share in the nation's mortgage market, and I think that market will come alive as the housing shortage of 2012, another of my predictions, comes about. I see this stock trading at $18, where it stood not that long ago, a terrific gain.

Hot Stocks For 2012: MEMC Electronic Materials(WFR)

MEMC Electronic Materials(WFR) makes polysilicon and wafers for the solar energy and semiconductor industries.
Barclays believes that it will gain market share in the semi space in 2012 and its movement to bring wafering in-house will accelerate vertical integration in the solar business and boost margins going forward. With declining average-selling-prices and costs for wafers in 2012, earnings remain variable.
Still, the stock trades at nine-times Barclays' 2012 earnings forecast, a significant historical discount. In years past, its trading range has been 12 to 27 times Barclays' EPS estimate, so major upside is possible.

Hot Stocks For 2012: TCF Financial(TCB)

TCF Financial(TCB) is a Midwest bank with retail and wholesale banking businesses.
Barclays notes that its seven-day branch operations and outstanding deposit base afford it a "best-in-class net interest margin." It has a strong leasing and equipment finance lease division, which will grow lending in 2012. Regulatory hurdles, including lower service fees stemming from the Dodd-Frank Act, present a potential headwind, which could damage its debit card fees anywhere from 20% to 80%.
Still, TCF is an exceptionally well-run bank, with 62 quarters of consecutive profitability and higher-than-average capital ratios. Barclays projects a $22 share price, suggesting 51% of upside in 12 months.

Hot Stocks For 2012: JPMorgan Chase(JPM)

The dividend's going to be boosted, the buyback enlarged, the earnings power revealed, the shroud gone. JPM's still the best-run bank in America, if not the world and CEO Jamie Dimon is one of our greatest bankers. The company really did come through this period relatively unscathed and with a better branch network, courtesy the dirt cheap price of Washington Mutual. This company's stock has done nothing, literally nothing, year over year. Unchanged! That won't be the case in 2012. I see it going to $50 propelled by earnings power and the dividend hikes. It will be the preeminent financial to own and become a staple of many a mutual fund's portfolio. Call it $50.

Hot Stocks For 2012: 3M(MMM)

The disappointing analyst meeting and the negative previous quarter haunt this stock going into 2012. But if you are like me and believe there will be worldwide growth, you would be nuts not to consider buying this 13% grower for just 15 times earnings. 3M's got so much going for it in Asia and has so many new businesses--it remains the most potent inventor of new products among the major companies I follow--that I think it will drift back up to its 52 week high of $91 if not higher. Perhaps $100, which I think is my stretch goal given its $6.16 in composite EPS estimates. Why $100? I think the dollar gets weaker and this is one of the most sensitive companies to the greenback which means that $6.16 could be too low. Cheap stock that's in the penalty box because of the ever so slight shade down of earnings, a shade down that, when I analyze the company, is something that will be left behind in 2012.

Hot Stocks For 2012: Vale(VALE)

Vale(VALE) is a metals and mining company and a producer of iron ore and iron ore pellets.
Barclays views the stock as the "best vehicle in Latin America to gain exposure to a potential five-year iron ore super cycle." A favorable iron-ore pricing environment will boost the stock, which is expected as Chinese consumption continues to grow.
Vale is a lowest-cost producer, so growth translates favorably to the bottom-line tally. Further, Barclays believes that Vale offers superior product quality, with a high iron to low gangue proportion, and has outstanding "long-reserve-life assets."
It views the consensus price scenario for iron as too bearish and the supply scenario as too optimistic.

Hot Stocks For 2012: Invesco(IVZ)

Invesco(IVZ) is an asset-management company, which Barclays believes is best positioned to profit from a transition out of fixed-income vehicles and into riskier asset classes in 2012, as Invesco's asset base is nearly 50% in equities or equity-related assets.
Barclays sees the operating margin rising from the mid-thirty-percent range to just beneath 40% if it can leverage its retail products into the institutional space and expand its asset base. Barclays' target suggests a potential 35% return in the next 12 months.
Other researchers are also bullish. Of those covering the stock, 65%, comprising Goldman Sachs, Credit Suisse and JPMorgan advise purchasing Invesco

Best Companies to Invest in 2012- 16 Companies Increasing Dividends This Week

It was another week of losses on Wall Street, and even the debut of Facebook (NASDAQ:FB), the biggest tech IPO ever, failed to get buyers excited. On the dividend front, we saw once-mighty retailer J.C. Penney (NYSE:JCP) move to suspend its payout as part of plan to cut costs and get the company back on track.
Yet it wasn’t all somber news for income seekers. This week we saw another batch of great companies moving to increase shareholder wealth. Here are 16 companies increasing dividends this week.
Property and casualty insurer ACE Ltd. (NYSE:ACE) moved to ensure shareholders’ wallets, increasing its quarterly payout 4.25% to 49 cents per share. The new dividend will be paid Aug. 21 to shareholders of record as of July 31. The new dividend yield, based on the May 16 closing price of $75.26 (the day the dividend was announced), is 2.60%.
H2O utility provider Best Companies to Invest in 2012 American Water Works (NYSE:AWK) turned up the spigot on its dividend by 8.7% to 25 cents per share. The new dividend is payable Sept. 3 to shareholders of record as of July 6. The new dividend yield, based on the May 11 closing price of $34.33, is 2.91%.
Specialized insurance provider Assurant (NYSE:AIZ) upped its premium to shareholders by 17% to 21 cents per share. The new dividend is payable June 12 to shareholders of record as of May 29. The new dividend yield, based on the May 11 closing price of $37.81, is 2.22%.
Chemical and specialty products maker Best Companies to Invest in 2012 Cabot (NYSE:CBT) boosted its dividend 11% to 20 cents per share. The new dividend formula will be paid in June 15 to shareholders of record as of June 1. The new dividend yield, based on the May 11 closing price of $41.87, is 1.91%.
Consumer products giant Clorox (NYSE:CLX) stocked shareholders’ shelves with a 6.7% increase in its quarterly payout to 64 cents per share. The new payout will be made on Aug. 10 to shareholders of record as of July 25. The new dividend yield, based on the May 15 closing price of $69.04, is 3.71%. The maker of multiple household brands has increased its dividend every year since 1977.
Oil refiner Best Companies to Invest in 2012 HollyFrontier (NYSE:HFC) refined its quarterly payout with 50% more fiscal octane. The new payout of 15 cents per share will be pumped out July 3 to shareholders of record as of June 12. The new dividend yield, based on the May 16 closing price of $29.57, is 2.03%. The company also declared a special dividend of 50 cents a share.
Bank-based financial services firm KeyCorp (NYSE:KEY) upped its quarterly payout 66% to 5 cents per share. The new payout will be made on June 15 to shareholders of record as of May 29. The new dividend yield, based on the May 17 closing price of $7.40, is 2.70%. The company also increased the payout on its preferred shares.
Risk, insurance and consulting firm Best Companies to Invest in 2012 Marsh & McLennan (NYSE:MMC) consulted its financials and moved to increase its quarterly dividend by about 5% to 23 cents per share. The new payout will be made on Aug. 15 to shareholders of record as of July 11. The new dividend yield, based on the May 17 closing price of $31.96, is 2.88%.
Natural gas transmission and storage firm NiSource (NYSE:NI) turned up the heat on its quarterly payout by 4.3% to 24 cents per share. The new dividend is payable Aug. 20 to shareholders of record as of the close of business July 31. The new dividend yield, based on the May 15 closing price of $25.09, is 3.83%.
Defense contractor Northrop Grumman (NYSE:NOC) increased the firepower of its quarterly dividend, boosting its payout 10% to 55 cents per share. The new dividend will be paid on June 13 to shareholders of record as of May 28. The new dividend yield, based on the May 17 closing price of $58.5, is 3.76%.
Grocery chain operator Safeway (NYSE:SWY) packed shareholders’ portfolios with a 21% higher dividend to 17.5 cents per share. The new payout will be made on July 12 to shareholders of record as of June 21. The new dividend yield, based on the May 15 closing price of $18.78, is 3.73%.
Airline operator Southwest Airlines (NYSE:LUV) showed shareholders a little “LUV” by booking a new 122% higher quarterly dividend to 1 cent per share. The increased dividend will be payable on June 20 to shareholders of record as of June 6. The new dividend yield, based on the May 16 closing price of $8.29, is 0.41%.
Iconic luxury goods seller Tiffany (NYSE:TIF) gave investors a little blue box, boosting its dividend 10% to 32 cents per share. The new payout will be made on July 10 to shareholders of record as of June 20. The new dividend yield, based on the May 17 closing price of $60.07, is 2.13%.
Railway products maker Westinghouse Air Brakes Technologies (NSYE:WAB) added to its dividend boxcar, upping its payout 66.6% to 5 cents per share. The new dividend will be payable Aug. 31 to shareholders of record as of Aug. 17. The new dividend yield, based on the May 16 closing price of $72, is 0.28%.
Energy infrastructure and pipeline operator Williams Cos. (NYSE:WMB) has raised its quarterly payout nearly 16% to 30 cents per share. The new dividend is payable June 25 to shareholders of record as of June 8. The new dividend yield, based on the May 17 closing price of $29.79, is 4.03%.
Electricity and natural gas company Best Companies to Invest in 2012 Xcel Energy (NYSE:XEL) increased the power on its quarterly payout by 3.8% to 27 cents per share. The new dividend is payable July 20 to shareholders of record as of June 21. The new dividend yield, based on the May 16 closing price of $27.45, is 3.93%.

Best Investments for 2012 - How Do you Pick 401k Mutual Funds

Mutual funds and 401k investing is the primary way that most folks experience the stock market and plan for retirement. Though I love buying and selling individual stocks, it’s clar that most people don’t have the time or the brainpower to look beyond mutual funds — to say nothing of the added risk you take on when trading a diversified mutual fund investment for an individual stock. So it’s no surprise that one of the most frequent questions I get is about picking the best mutual funds within your 401k. I’d like to tackle that topic today, but broaden the discussion to picking the best mutual funds overall – whether you have a limited menu from your employer’s 401k retirement plan or a broader IRA account with access to more options. When evaluating your 401k and mutual fund options, you should check out the following factors: Did the fund beat the S&P 500? This question matters on two fronts. First, did it beat in the last year? Secondly, did it outperform in the longer term, like across the last five or 10 years? (Surprisingly most managers DON’T … here’s the disturbing proof.) What’s the expense ratio? This is the amount of your returns that the fund shaves off. 1% sounds like a reasonable expense, but what if you only get 3% in annual returns? Well, your expenses shove that down to just 2%. Giving up 1% in returns every year adds up dramatically over a decade or two. If your fund has an expense ratio higher than .75% or 1% it better deliver impressive returns to be worth it. How long has the manager been there? If the guy moves around a lot or has only recently been put in charge of the fund, you really can’t credit him with any of its success. That would be like saying it doesn’t matter whether Steve Jobs is leading Apple Inc. (NASDAQ:AAPL) or not – it matters a great deal. That’s not to say a different manager can’t prove himself over time, but don’t be his guinea pig. Less than a year or two is a warning sign. Another good rule of thumb is the Morningstar rating. This is a firm that specializes in ranking the best and worst funds. Anything that’s a four or five star is typically a solid fund overall. This mutual fund research firm is a great resource, though obviously you shouldn’t rely too heavily on their evaluation alone. So what if you want to check these three metrics on your own? My favorite one-stop shop is Fidelity … If your mutual funds aren’t in the Fidelity family, don’t worry – it offers info for ALL funds. Well, over 1,700 funds anyway. Just type in the name of your fund under the “search” functionality at the very top of the page in the green bar, and then click on the fund you want to research to get an in-depth summary of the investment.