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Dividend Expert Eyes A Four-Pack Of Favorites

 December 24, 2009 11:43 AM

In our annual Top Stocks Report, dividend specialist Vita Nelson chose Florida utility FPL (NYSE: FPL) as her top pick for 2010.

However, the editor of the Moneypaper emphasized her preference for a more diversified approach and submitted a package of 5 favorite stocks. Her commentary on FPL appears in our Top Picks report; here, we share her other 4 favorites.

"cbrl (NASDSAQ: CBRL) headquartered in Tennessee, operates nearly 600 combination full-service restaurant and gift shops in 41 states.

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"Most are company owned, not leased, and can be found along major highways. The restaurants, which feature home-style country cooking menus, accounted for 79.2% of revenues in fiscal 2009. (Fiscal year ends last Friday in July.)

"The gift shops feature rocking chairs, apparel, toys, cookware, ceramics, and an array of food items.

"The company reported a 37% increase in first-quarter (October) earnings per share and consensus estimates call for it to earn about $3.23 per share in the fiscal year that ends next July and $3.47 in fiscal 2011, compared with $2.89 in fiscal 2009.

"The stock sports a price/earnings ratio of about 12 and its 80 cent-per-share annual payout results in a yield of 2.1%.

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"Founded in 1847, clf (NYSE: CLF) -- the former Cleveland-Cliffs  -- is the largest producer of iron ore pellets in North America, accounting for almost 45% of the market.

"Since acquiring Alpha Natural Resources in 2008, a significant producer of metallurgical coal for the steel-making industry. It operates six iron ore mines in Michigan, Minnesota, and Eastern Canada and coalmines in West Virginia and Alabama.

"The company also owns an Australian iron ore mining company and has interests in a Brazilian iron ore facility and an Australian coal mining operation.

"CLF is a cyclical company whose shares declined from a 2008 high of $121 before rebounding from $11.80 to a recent $41.30.

"Consensus estimates call for it to earn about 70 cents per share this year and $2.73 in 2010, compared with $6.57 in 2008. But Value Line projects earnings per share of over $4 in 3-5 years.

"The shares split 2-for-1 in 2005, 2006, and 2008. With a dividend yield of just 0.8%, the primary goal of CLF investors is capital appreciation.

"ge (NYSE: GE) operates as a technology, media, and financial services company worldwide.
"Its Energy Infrastructure segment produces gas, steam, and aeroderivative gas turbines; generators; and combined cycle systems, and provides water treatment services and equipment.

"The Technology Infrastructure segment manufactures jet engines, aerospace systems and equipment. The Consumer & Industrial segment produces various household appliances, lighting products, and electrical equipment and control products.

"GE was founded in 1892. The stock currently trades at a price/earnings ratio of less than 15 and its dividend provides a 2.5% yield.

"Founded in 1885, jnj (NYSE: JNJ) is a major health-care products company that derived about 49% of its $63.7 billion in 2008 sales from overseas.

"Its consumer brand names include Band-Aid, Monistat, Neutrogena, Tylenol, Stayfree, and Reach.
"Typically, the company spends at least 12% of its revenue on research and development.

"Earnings per share were $4.57 in 2008, compared with $4.15 in the previous year, and consensus estimates call for the company to earn about $4.58 in 2009 and $4.93 in 2010.

"The annual dividend has been increased for 47 consecutive years, and now stands at $1.96 per share, providing a yield of 3.12%."



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