For those income-minded investors which are looking for solid returns from their stock portfolios, high dividend stocks remain attractive. Over time, high dividend stocks have historical payoffs than other investments. According to the historical statistics over the past 100 years, approximately one-half of the market returns of the component stocks of the Dow Jones Industrial Average and S&P 500 Index were derived from dividend payouts.
Today, we pick two stocks with the history of paying high and solid dividend over the recent years along with the current consensus recommendations of “buy”.
Compass Diversified Holdings (NYSE: CODI)
Compass Diversified Holdings is a public investment firm specializing in acquiring controlling stakes in small to middle market companies that have positive and stable cash flows and face minimal threats of technological or competitive obsolescence. The company is engaged in making the middle market and buyout investments with long-term macroeconomic growth opportunities.
CODI currently sports a dividend yield of 9.9%. Over the past five years, the company on average yielded 10.41%. According to the Yahoo finance data, analysts on average estimate the CODI stock price target of $16.25 per share versus the current CODI stock price of $14.74 per share (CODI closing price on April 16, 2012). CODI shares currently trade at a trailing twelve months P/E ratio of 10.8, compared with the Staffing & Outsourcing Services industry P/E ratio of 55.6. We give CODI stock a “buy” rating.
Ituran Location and Control (NASDAQ:ITRN)
Ituran Location and Control provides location-based services, consisting predominantly of stolen vehicle recovery and tracking services in Israel, Brazil, Argentina, and the United States.
ITRN currently pays a 8.9% dividend and paid an average juicy dividend 8.0% percent over the past five years. The company paid dividends of $1.23, $1.00, $1.50 for the fiscal year 2012, 2011 and 2010, respectively.
ITRN stocK currently trades 11.8 times earnings per share compared the 50.62 multiple P/E ratio of its direct rival LOJN and 12.00 of the industry average level. Analysts on average project the ITRN stock price target of $18 per share. IRTN stock price closed at $13.63 per share on Monday (April 16, 2012). We currently give a suggestion of “buy” on ITRN stock.
Clearly, solely picking high dividend stocks without agreeable fundamentals doesn’st make much sense and investors should also consider the rationality of stock price as no one wants to pay a high premium just for a dividend. At present, there are many high dividend stocks being actually trading at reasonable prices, making this kind of stock picking area wider and worth more investment ideas.