3 Strong Stocks that Pay Dividends

Dividend Stocks

Mastery examines 3 stocks that pay a respectable dividend and should increase in share price in 2012.

Mastery wants dividend paying stocks and we are spreading our money around in a few sectors for our latest picks.  We are selecting Molson Coors Brewing Company (TAP), NY Mortgage Trust (NYMT) and U.S. Bancorp (USB).

When it comes to solid businesses that survive any economic situation, its beer.  We prefer Molson Coors Brewing Company (TAP) and their 3.08% annual dividend yield.  TAP just paid $3.5 billion to drink up StarBev, they are now have a core operation in Europe and the move will pay off in the long run.  TAP shares have fallen 8% since announcing plans to acquire StarBev but today its share price is finally up .5%.  Consider Molson Coors' average analyst target price is $45.67, which implies a 10% gain in the next 12 months.  TAP goes for $41.52 a share.

When it comes to banking and selecting a low risk financial play, U.S. Bancorp (USB) is the clear winner.  USB pays a 2.46% annual dividend yield.  USB's chart is a thing of beauty when compared to every other American bank stock (see below).  USB passed the recent Stress Tests with ease and announced it raised its annual dividend 56%.   Unlike many of its competitors, U.S. Bancorp has shown no interest in shrinking its balance sheet or its loan portfolio . According to Fool.com:
While institutions like Citigroup (C ) and Bank of America Corp (BAC) have intentionally been shrinking their balance sheets, perhaps in large measure to give a boost to capitalization measures, U.S. Bancorp (USB) has been in growth mode. Since late 2008, it has acquired 14 separate failed banks in deals with the FDIC, most of which involved little risk due to loss sharing agreements with the FDIC. 
USB trades at $31.82

Roll the dice with NY Mortgage Trust (NYMT) to enjoy the incredible 14.79% annual dividend yield.  Don't sell the house and buy NYMT, rather invest a small position and get a feel for how this stock trades.  NYMT shares have gained 4% in the past 12 months and swung all over the place in the process.  NY Mortgage Trust (NYMT) NYMT is a self-advised real estate investment trust (REIT).  What we like about them is a large part of NYMT’s portfolio is in LIBOR-adjusting business loans, which yield more as rates increase.  NYMT is trading at $6.76 per share.

MASTERY Bottom Line (Ninja Style)

MASTERY Bottom line:

Dividend paying stocks is where its at for 2012.  In order of preference we would buy USB, TAP and throw a little coin at NYMT.