This week we are going to use DividendMax to highlight a selection of dividend yields that look crazy. Our selection criteria is simple. All dividends with an annualised yield of over 10% over the next 3 dividends that are due / expected. The dividends of the week will be the one that we think looks the most plausible in the UK and one from Europe.
Our initial criteria revealed too many stocks with 18 over 10%. The geographic spread is interesting:
U.S. none Spain Eight U.K. Four Belgium two Portugal two France two
This says a lot about the woes of Europe at the moment, but we need more critria to shrink the list. Dividend cover greater than 1 shrinks the list to twelve. We then use market Cap > 2Billion The final criteria that we will use is, will the dividend increase. This brings the list down to a manageable level of 6 stocks.
Top of the list is ACS of Spain, followed by Ferrovial of Spain, who announced a whopping interim dividend of 1 euro last week. Next comes EDF and Resolution Ltd. Finally, Gas Natural and Iberdrola of Spain. For readers who do not venture out of the U.K, Resolution is the choice of the U.K. stocks. It is some way before any dividend is expected (April 2013). The annualised yield is just over 12%, with decent cover of 1.5.
For those of you who want some short term income and are happy to look abroad, my dividend of the week is Ferrovial, paying out 1 Euro against a price of Euro 11.45. These guys are not small and whilst exposed to Spain, they do have major assets that we all know with Heathrow and other U.K. airports following their takeover of B.A.A a few years back. According to my research, they go ex-dividend and pay the dividend on the 13/12/12, which is this coming Thursday. Check with your broker that you qualify for the dividend, which yields over 8% just for this one dividend.