With U.S. companies in the holiday spirit, here are the three best dividend stocks to buy in December.
The holidays are almost upon us. And U.S. companies are in a giving mood.
Dividend payouts have become a popular December stocking-stuffer. Some big-name public companies are handing out dividends next month. Several of them are actually increasing those dividends.
‘Tis the season.
So as we prepare to stuff ourselves with turkey, gravy and pumpkin pie this Thursday, here are three appealing dividend stocks worth filling up on for the holiday season.
They are the three best dividend stocks to buy in December.
December Dividend Stock No. 1: Cedar Fair (NYSE: FUN)
Cedar Fair’s dividend has been all over the map since the recession. More recently, however, it seems to have settled into an encouraging pattern of steady growth.
The entertainment company is upping its quarterly dividend by five cents, from $0.70 to $0.75, for shareholders of record as of Dec. 3. The first payment is due Dec. 15. The 75-cent dividend translates to a hefty 6.4% yield for a stock with a share price of $47.
It’s the third dividend increase Cedar Fair has made in the last two years. As recently as 2011, Cedar Fair’s dividend was a mere eight cents per share, having plummeted from a high of 48 cents per share prior to the recession.
Since then, the company’s earnings have stabilized. After losing money from 2006 through 2009, Cedar Fair has accumulated $7.58 in earnings per share in the last 11 quarters.
Cedar Fair is an Ohio-based company that owns and operates 11 amusement parks across the country. Its struggles during the recession are no surprise; not many people were spending what little excess cash they had on roller coaster rides and water parks back then. Now, as the economy has picked up, so have Cedar Fair’s profits.
The stock has had a bit of a rough year, down 5%. That said, shares are up a whopping 430% since 2009. Trading at just 15 times next year’s earnings, FUN is a relative bargain. Throw in the dividend growth and the 6.4% yield, and you have the potential for even more FUN.
December Dividend Stock No. 2: Regal Entertainment Group (NYSE: RGC)
The largest movie-theater chain in America always makes a killing during holiday movie season. And it routinely returns a good chunk of that money to shareholders.
For the third December in five years, Regal is paying a special one-time dividend that’s well above its usual payout. RGC will pay $1.22 per share to investors of record as of Dec. 4. That includes its usual $0.22 dividend, plus an additional dollar.
In 2012 and 2010, Regal paid similar special dividends of $0.79 and $1.40, respectively.
Regal Entertainment’s latest act of generosity comes in the midst of rumors that the company is on the brink of joining forces with the second-largest movie-theater company in America, AMC Entertainment (NYSE: AMC). In an odd twist, Regal would actually sell to AMC, the smaller of the two companies. Regal announced last month that it had hired Morgan Stanley to weigh its sale options.
Myriad hurdles exist, namely the fact that an AMC-Regal deal could violate antitrust laws. But the mere rumors of a Regal buyout have sent shares soaring 11% in the last month.
Chances are the deal won’t actually happen. In the meantime, enjoy the early Christmas present of a special $1 dividend.
December Dividend Stock No. 3: Dow Chemical (NYSE: DOW)
A $60 billion chemical company isn’t as exciting as the largest movie-theater chain or an upstart amusement park operator. But the dividend growth is even more impressive.
Dow Chemical is upping its dividend to $0.42 from $0.37 next month, the fourth double-digit percentage increase since 2011. The latest increase will be paid out on Jan. 30 to shareholders of record as of Dec. 31.
Dow Chemical’s yield is now a healthy 3.3%.
The company is a leader in delivering specialty chemicals for use in the electronics, water and energy sectors. While its margins are pretty thin at less than 7%, Dow Chemical is growing earnings at a 38% clip and is expecting another 15.5% increase in 2015. Meanwhile, the stock is up 17% year to date and 76% in the last two years.
Despite that recent run, DOW shares trade at a very reasonable 15.3 times 2015 earnings estimates.
Collect Dividend Income Every Month!
We’ve put together a simple calendar that pulls together all the market’s best dividends into a single, easy-to-read document. One look, and you’ll be able to set up a 12-month dividend stream for regular income every month. Click here to see the full details.