The Dynamic Dividend

Dividend Stock Value Rankings

Below is my list of the 25 best values among dividend-paying stocks, which I update on the first market day of each month. This is by no means a “buy” or “recommended” list. I publish the rankings in an attempt to give investors some quality stocks — which I believe are currently undervalued — to research for themselves. Each entry is accompanied by some very basic commentary. Last Update: August 1, 2011.

I track hundreds of dividend-paying stocks in my personal database, keeping a close eye on (what I deem to be) their most important attributes. These factors are largely fundamental-based, and include (but aren’t limited to): dividend yield, dividend growth history, financial ability to continue dividend growth, perceived willingness to continue dividend growth, balance sheet health, management strength, industry strength, industry position, and how the current share price stacks up against various valuation methods.

I tweet regularly about the stocks I’m analyzing and where they fall on my expanded database. If you’re interested in those updates, simply follow @dynamicdividend on Twitter.

	1. Intel Corporation (INTC) Holds top spot for a third straight month as yield continues to test historic highs. Shares popped in April (+15%) on great Q1 results but failed to carry the momentum into subsequent months, and now trade at just 8.8x future earnings with one of the best yields in tech (3.80%).
	2. RPC (RES) Moves up six spots this month following the market's cold reception to yet another stellar quarter and dividend hike. RPC raised its dividend twice and split its stock in 2010, and has already posted two earnings beats and a pair of big dividend hikes in 2011.
	3. Friedman Industries (FRD) My favorite micro-cap retains the third spot this month despite jumping 11% in July. The stock has been running up since Friedman reported huge fourth quarter growth and pushed its dividend to a new all-time high, but still trades at just 8.2x future earnings with a 4.4% yield.
	4. Tower Group (TWGP) Undervalued and unnoticed. Reported yet another solid quarter in May, and tacked on yet another monster dividend hike. Has now boosted its payout by 650% since 2007. After falling 4.5% in July, shares trade at just 7.3x future earnings and yield 3.3%.
	5. Guess? (GES) I've long said Guess will remain my favorite apparel value as long as it remains under $50... which it's done for about eight months now. Shares fell again in July on a variety of outside factors, but the stock's fundamentals remain strong, with a yield that's now over 2%.
	6. Chevron Corporation (CVX) Shares bagged several new all-time highs in April and began to threaten those levels again in July, but a slight pullback to close the month left the stock trading at just 8x next year's earnings with a 3% yield.
	7. Republic Bancorp (RBCAA) Alleviated RAL concerns by focusing on ERC/ERDs during its lucrative tax season, resulting in a first quarter profit that beat many full-year earnings estimates. Raised dividend by 8% in May, pushing its payout higher for the 11th straight year.
	8. Corning (GLW) Increasingly focused on display business, so its no surprise the stock took a beating when Corning downgraded its full-year Gorilla Glass sales guidance last month. But was it an overreaction? Shares now trade at barely 7x future earnings.
	9. Nucor (NUE) Has improved its annual dividend total every year dating back to 1974. Since 2005 alone, the steel giant has raised its payout by 383% and distributed an additional $4.785 per share via special dividends.
	10. Amtrust Financial Services (AFSI) Has hit several all-time highs lately, and AmTrust has supplemented those returns with aggressive dividend growth. After a 13% dividend hike in July, AmTrust has now raised its payout by 350% in less than five years. Not bad for a stock trading at just 8.2x future earnings.
	11. Bunge Limited (BG) Recently raised its dividend for the ninth consecutive year, and the streak isn't ending any time soon. Earnings have much greater momentum, keeping forward payout ratio at just 15%.
	12. TICC Capital Corp. (TICC) The tech-focused BDC reported a bland first quarter, but did raise its dividend for the fifth time in six quarters. Shares really struggled during the second quarter, pushing yield over 11%.
	13. Vale S.A. (VALE) Has been slipping down the rankings recently, but remains my #1 international value. Alleviated leadership concerns with a CEO appointment earlier this year and recently announced plans to distribute an extra $3 billion to shareholders through a special dividend.
	14. Main Street Capital (MAIN)) The monthly dividend-payer recently raised its payout by 4% and reported blowout fourth quarter results. Yet shares have hardly budged on the year, leaving that juicy 8.9% dividend yield ripe for the picking.
	15. ConocoPhillips (COP) Recently gave shareholders their biggest raise in six years (20%), pushing its payout higher for the 11th consecutive year. Stock has barely moved since the company announced spin-off plans, giving investors a chance to lock in an elevated yield.
	16. Occidental Petroleum Corporation (OXY) Ten dividend increases -- including seven of at least 10% -- since 2003 have boosted the company's payout by a total of 268%. And yet Oxy still maintains a payout ratio below 20%, leaving the door open for the accelerated dividend growth to continue.
	17. CF Industries Holdings, Inc. (CF) Barely trades at 10x future earnings despite popping 10% in July. Would be in the top ten if it either smoothed out its dividend growth or launched its yield into relevancy with another huge dividend hike. The fert giant hasn't touched its payout since a quintupling in 2008.
	18. Cliffs Natural Resources (CLF) Makes its Value Rankings debut after doubling its payout for the second consecutive year. The average analyst expects the company to earn $15 per share in 2012, which means the stock is trading at an absurd 5.9x future earnings.
	19. Wells Fargo & Company (WFC) Still the only major U.S. bank to ever appear on the Value Rankings. Yields just 1.71%, but 14% forward payout ratio leaves plenty of room for growth when it becomes more appropriate (read: allowed). Trades at just 7.9x next year's earnings.
	20. Thor Industries (THO) Makes its Value Rankings debut after the stock tanked in July (-14%) , falling to just 9.5x future earnings. If recent figures from Harley and Polaris are any indication, Americans are beginning to spend on "fun" vehicles again... at what point does this RV manufacturer benefit?
	21. Annaly Capital Management (NLY) Remains the best value among the high-yielding mortgage REITs, but it falls five spots this month as the "all assets guaranteed by government agencies" thesis loses some clout. Currently pays 15% thanks to a recent uptick in its payout, and will set you back just 7.2x next year's earnings.
	22. Getty Realty Corp (GTY) The service station REIT debuts after a late-July earnings miss sunk its shares. Despite the disappointment, profits and rental property revenue both showed improvement during the second quarter. Yields more than 8%, with a dividend hike likely on the way this month.
	23. Archer Daniels Midland Company (ADM) After rising more than 23% during the first four months of the year, shares gave back nearly all of those gains over the last three, launching ADM back onto my value radar. The stock now trades at just 9x future earnings and yields 2.1% with a 36-year dividend growth streak.
	24. Harris Corporation (HRS) Makes the Value Rankings for the first time as shares sit at their post-recession low. The communications and IT company features a sub-20% forward payout ratio despite growing its payout by 900% since 2002, and has yet another dividend hike coming this month.
	25. Rock-Tenn Company (RKT) Took a tumble in June (-14%), launching it onto my radar -- and onto the Value Rankings for the very first time. After falling another 8% in July, the stock trades at just 8.5x future earnings and yields 1.31% thanks to huge dividend hikes in both 2009 (50%) and 2010 (33%).