3 Best Stocks With Big Dividend Growth Potential to invest in 2012

Dividends always have been welcome cash returns for investors, but they have become even more important elements in picking stocks in tough economic times. But a word of advice: In scouting for dividend plays, what’s essential is focusing on dividend-growth companies — companies with a potential of consistently increasing their payouts over the next three to five years.
It isn’t enough that the dividend yield is relatively high. What matters is whether a company will have the will and resources to steadily raise them year after year.
“There is sound logic in seeking out companies that are expected to have material growth in their dividend distributions,” says Alan House, analyst at independent investment research outfit Value Line. Dividends that are increased over time suggest a company that’s growing and a management that cares about returning money to shareholders, he adds.
In searching for such companies, the analyst screened Value Line’s database for companies in the 90th percentile or higher in estimated dividend growth rates over the next three to five years. Three companies stood out in Value Line’s search, which are in the diverse businesses of making fertilizer, infant milk and oil-drilling equipment. They aren’t currently paying lofty dividend yields, such as the 9.6% from specialty finance firm Apollo Investment (NASDAQ:AINV), or the 7.4% yield from investment adviser AllianceBernstein Holding (NYSE:AB). The Value Line picks, however, are among the most likely to elevate — in a big way — their currently small dividend yields in the years ahead.
They are (3 Best Stocks With Big Dividend Growth Potential to invest in 2012)CF Industries (NYSE:CF), which makes nitrogen and phosphate fertilizer products in North America; Mead Johnson (NYSE:MJN), which provides infant formula nutritional products; and (3 Best Stocks With Big Dividend Growth Potential to invest in 2012)National-Oilwell Varco (NYSE:NOV), a major supplier of equipment and components for the oil-and-gas drilling and production companies.
CF Industries, which produced strong sales and earnings in 2011, is likely to continue performing well.
“The company’s balance sheet looks solid,” says Michael A. Camp, president of Northwest Criterion Asset Management, which recently has accumulated shares.
Now trading at $182 per share, Camp says a price of $334 is quite possible based on his projected earnings of $22 per share for 2012. The outlook for CF Industries’ long-term growth is favorable, he says, with the strong demand for its products expected to continue.
Value Line’s Alan House says global population growth and increased per-capita income in developing and emerging nations will drive up demand for agricultural crops. What’s more, low global grain supply might well drive high plantings over the next several years. Because of this promising outlook, CF Industries’ board recently quadrupled the quarterly dividend to an average annual rate of 60 cents a share, or a dividend yield of 0.87%.
“We look for the payout to continue climbing in the years ahead,” House says.
Mead Johnson is making great strides in emerging markets, where revenue gains exceeded 25% in each of the past three quarters, notes House. In particular, MJN has been making big inroads into China, which he expects might well become Mead’s largest market down the road. So he looks for the positive momentum to continue and predicts the company will double its annual payout in the next three to five years, from the current 1.4% dividend yield. The stock currently is trading at $74 a share.
National-Oilwell Varco is running strong on all cylinders, House says, benefiting from better operating conditions in recent months, helped by a large order backlog — 80% of which is for international offshore rigs. The company’s low dividend yield of 0.64% is expected to be significantly expanded by the board during the next three to five years. Now trading at $77 per share, analysts expect the stock to climb to $85 to $99 per share during the next 12 months.
Kurt Hallead, analyst at RBC Capital Markets, says National-Oilwell is “one of the best ways to play the various positive trends currently driving oilfield services.” He rates the stock as outperform with a 12-month target of $85 per share.
For investors looking for solid investment bets in good or bad markets, there’s nothing like stocks that combine sturdy growth with potentially robust dividend yields. That’s the promise and potential of CF Industries, Mead Johnson and National-Oilwell over the long haul.

Silver: From $30/oz to over $500 by 2020

Silver: From $30/oz. to over $500 by 2020. In under a minute, I can tell you why that price must happen, and likely when. It seems to me that the public will one day wake up and start buying silver to protect from inflation. Thus, long before, say 10-20% of people buy silver, at least 1% of the American public will buy silver. We can calculate what might happen to the silver price when that happens.

The amount of money in US Banks is about $18 trillion. 1% of that is $180 billion.

Very little silver is left; it's mostly all been consumed, so most of what is available to buy is the annual new mine supply which is 700 million ounces.

$180 billion is $180,000 million. Divide that by 700 million, and we get an implied price of $257 per ounce. Do the math yourself. I'll wait.

Permalink: [592] Top Stocks To Buy - Silver: From $30/oz to over $500 by 2020

But that price would mean that there is no newly mined silver left over for any industrial use, and that nobody else outside of the USA could buy any of the world's newly mined silver. Clearly that can't happen; those two groups would continue to buy silver, competing to buy, and driving up the price even more.

Thus, silver is very likely to be about $500/oz., by about the time that 1% of the American public wakes up and starts to buy silver. That will be the very beginning of the bull market in silver, when measured by "popular demand" -- and at that price, silver would still be very unpopular.

Just remember these key facts, and don't let anyone, or even yourself, trick you out of this developing bull market in silver. Don't try to time the peaks, don't wait for dips, just buy and hold real silver, not any kind of paper silver promise.

What kind of annual gains will that be? Let's see, if silver goes from $30 to $500 in ten years, the compound interest rate calculator tells us that will be an average annual gain of 32.49%, which is about the same as what silver has done in the last seven years, from $4.15 to $30, which is a gain of about 32.66% per year, on average.



Oh, by the way, the 1980 high for silver was $50/oz. That was when M3, money in the banks, was about $1.8 trillion. Today, the monetary base has increased about ten times higher. Thus, the true inflation adjusted peak for silver would be $500/oz. That just further confirms this $500 estimate.

But there are many reasons why silver should surpass the former highs.

Key reasons to surpass the former 1980's peak:

1. Silver is more scarce due to 30 more years of industrial consumption.
2. Paper silver scams are more abundant.
3. Baby Boomers will be retiring, cashing out stocks and draining pension plans that have not yet invested into silver, causing other investments to vastly under perform silver, making silver ever more attractive.
4. More trend investors today will notice the silver bull market and continued gains in the silver price, and invest in it, and carry it to further highs.
5. The US government and political leaders are spending like never before, and the people, even the world over, lack the political will to control government spending which will ruin all currencies.
6. There are no "safe" currencies to run to, leaving gold and silver as the only alternatives; and gold and silver have been in bull markets in all major currencies for 10 years now.

I'm sure you can think of many other reasons, but that's enough for now.

So, the true skeptic may ask, "Yes, but this guy is a coin dealer, he's just pushing his product because he has plenty of silver he wants to dump. Besides, what kind of argument will he come up with to sell silver after it hits $500/oz.?"

Let me answer this two part question. Yes, I do have silver! I have it, because I believe that the price will go up a lot, thus, it makes perfect sense for me to carry it as inventory. I sell it, because few people are able to buy it in bulk like we can, so I use my own stash, and industry connections, to enable others to buy it.

But what will I say after silver hits $500/oz., or nears that price?

I'll say, "Obviously this bull market in silver is just getting started. Only 1% of American public money is buying silver per year. Just wait until at least 10% of US money is buying silver in a year, the price will be well over $2500 to $5000 per oz. for silver."

But I would never make that argument now. Too few people would believe me, and they would think I'm some kind of kook. And people never do business with kooks.

And what will I say when silver nears $2000/oz.?

I'll say, "Everyone knows it only costs 4 cents to print up a $100 bill, and everything returns to its intrinsic value. But used paper, particularly smelly paper, is worth even less, which is useful only for things like lining the bottom of the cages of birds, or burning in the fireplace. Thus, the price for silver will soon only be quoted in terms of gold, and certainly not quoted in terms of any kind of paper money at all." But again, I'd never say that today, everyone would think I'm crazy.

Oops. Too late for me. But it's not too late for you to buy some silver!