This week we are going to use the DividendMax optimizer to pick out our dividend of the week. Our critieria is to pick all stocks in the FTSE 350 with an annualised dividend yield of over 9%. The resulting list is First Group, Man group, ICAP, Petropavlovsk, Tullet Prebon, African Barrick Gold, Admiral Group, Carillion, UK commercial property trust, Phoenix Group, Balfour Beatty, Halfords and Resolution. Surprising to see Resolution still in there as it went ex-dividend last week. However as a previous dividend of the week it will be discounted. As will Man Group, First Group, ICAP and Admiral for the same reason. I don't fancy the UK commercial property trust as I don't know much about their business.
Petropavlovsk looks to have a high yield, but you have to bear in mind that only 2p of the 7p is cash, the rest being a scrip dividend (which of course could be a good thing at these prices - it has a 52 week high of 494.5p and currently stands at 142p) African Barrick Gold is in a similar position at 182p at the time of writing having fallen from a 52 week high of 499p. They yield 12.34% and 10.7% respectively on the three dividend optimizer, but you have to be concerned about the next two dividends. Everybody is now talking about there being no need to hold gold right now and the gold price fell dramatically a week or so ago. At these levels, both look like good value to me. African Barrick go ex pretty soon (1st May) and their dividend is all cash, so on balance, I think I prefer them.
Tullet Prebon are another stock that has performed badly, but have a very good dividend track record. They go ex tomorrow for 11.25p.
Carillion have been a bit of a dog, but they do have a very good track record of increasing the dividend. They have decent dividend cover so another, albeit small increase can be expected next year. On a P/E of 7, they look very good value.
Phoenix Group are another Resolution type company. As with all of the insurers, they have bounced strongly this year so probably too late.
Balfour Beatty look like they are struggling to me having only maintained their final dividend.
Halfords was once top of the optimizer with a yield of 16% (one of the highest ever) and a share price pretty much half the current level. If you did not buy it then, you missed the boat. It was an obvious trade ahead of the Olympics with our cyclists expected to perform well.
It is a very tough call between the gold miners and Carillion and it really does depend on your view of the global economy and the outlook for gold. I am not convinced that we are out of the woods yet in terms of Eurozone worries, global growth and in the UK the deficit is stubbornly high. However, for the low PE and and solid dividend track record, I am going to go with Carillion. They go ex dividend on the 15th May for 11.85p.
