Dividend paying stocks can be an investor’s best friend, especially in times of turbulent and unpredictable markets. A predictable and growing dividend rate is a sign of a strong and company who’s management has faith in the future prospects of the organization. These companies are also usually well known to investors and are typically referred to as Blue Chip Stocks.
While these Blue Chip Stocks are usually very stable companies with solid balance sheets and strong brand names, they also tend to trade at a premium to some of their competitors whose company may be just as solid and whose financial prospects are also strong, but they make lack the “Blue Chip Brand”.
In this article we are looking for solid dividend paying companies that may not have the mass appeal of the general markets. As dividend investors, we may know about these companies, but the general investing public might never have heard of them. The feature of being relatively unknown is what makes these dividend payers attractive. This lack of popularity among the general public gives us the ability to invest in a strong company before it gets to be well known. For instance, an investment in Southern Peru Copper (PCU) before it leaked that Warren Buffet was loading up on shares is a great example of this strategy.
Let’s take a look at 5 Unknown Dividend Plays
- Medtronic (MDT) – Excellent Dividend Growth Rate
Medtronic develops, manufactures and markets medical devices for all types of conditions and diseases. Although the current dividend yield isn’t exceptionally high, the divdend growth rate has been excellent seeing the dividend double over the past 5 years.
In addition to the great dividend growth rate, I am a big fan of Medtronic’s future growth as a large player in the growing health industry looking to take care of those baby boomers!
- United Technologies (UTX) – Another Excellent Dividend Grower
Like Medtronic, when looking at United Technologies we must focus on the dividend growth rate and what that means to our future yield on a current purchase. The UTX dividend has doubled over the past 4 years and if that continues, we could see a dividend rate of $2.12, giving us well over a 3.15% yield on today’s price.
While that dividend yield might not sound great now, this list is meant to be a watch list that will provide us with some great companies to buy when they are out of favor or when the market corrects.
United Technologies provides products and services worldwide under well known brand names such as Carrier (Heating and cooling), Otis (elevator), as well as Aerospace and Aircraft products and services.
- Westpac Banking (WBK) – 4.70% Yield and Increasing Yearly
Like many other players in the Financial Services sector, Westpac provides a healthy dividend yield. However, this Australian bank also provides potential for future growth and a dominant brand in its marketplace. What makes this dividend play even better is its track record for increasing the dividend year after year!
- Manulife Financial (MFC) – Blue Chip Canadian Insurance Provider
Manulife is an excellent dividend growth stock that has doubled its dividend over the past 5 years. The company also has very specific strategies for penetrating the Asian markets, which could indicate a huge boost in future growth. Manulife provides various forms of insurance and wealth management products for customers in Canada, the United States and Asia.
- France Telecom (FTE) – Former Government Monopoly Expanding
This former government controlled monopoly is expanding into Africa and has been buying mobile licenses and acquiring smaller companies in emerging markets. Along with expansion, cost controls were cited as an area of concentration by management as a way to increase profits.
With a dividend yield over 4.5% and future prospects that look strong, France Telecom is a Dividend Money keeper!
These 5 Dividend stocks should keep you busy doing your due diligence, but there are plenty of others out there beyond the United States and North American borders that may just prove to be some of your greatest investments!
Do you have any favorite “unknown” stocks that you would like to share?