Blackrock Advisors Llc is a giant fund manager with $95 billion worth of assets under management. This article shows five of the top dividend stocks held by this Plainboro, New Jersey-based asset management firm. Dividend income-seekers can take a look at these stocks to see if these are worth including in their portfolio or not.
Most of these have been experiencing positive earnings surprises, positive quarterly revenue growth, double-digit profit margins, and consistently huge increases in dividend payments.
Sources: www.finviz.com, www.marketwatch.com, and www.whalewisdom.com; Data retrieved March 29, 2013.
Comcast Corporation (NASDAQ:CMCSA)
The media and technology company’s quarterly revenue has grown 5.95% year-over-year. It currently enjoys a higher than usual profit margin at 12.57%, and although it had slightly missed the latest earnings estimate by a small margin, the company’s core operations are exhibiting a healthy trend with increasing net operating cash flow. In 2012, this grew by 3.5%, and from 2008 to 2012 net operating cash flow grew by an annual average rate of over 9%. Therefore, Comcast Corporation (NASDAQ:CMCSA)’s payout ratio based on cash flow remains at a sustainable level of 10.84%. Dividend income seekers can also sit back and relax as the company continues to have an adequate level of free cash flow, at $7.5 billion in 2012, slightly lower than 2011’s $7.8 billion, but notably higher than 2010’s $5 billion. With these performances, and a P/E ratio of 18.33, it’s no wonder that Comcast’s stock price has been rallying robustly. The company’s EPS forecast for 2013 has been revised upward twice. Based on these indicators, the stock remains an attractive investment.
Comcast’s NBCUniversal spent about $4.8 billion to obtain the rights for the 2016 and 2020 Summer Olympics. The company had recently reported that it does not expect to make huge earnings from this multi-billion investment, but this should give the company much greater exposure and content that it needs to narrow the lead that industry leader ESPN enjoys. It has also recently announced an improvement in the speed of its XFINITY Internet plan at no additional cost, which can potentially boost the company’s popularity.
Microsoft Corporation (NASDAQ:MSFT)
Microsoft Corporation (NASDAQ:MSFT) is in for some momentum in 2013. This is shown by company’s high profitability, at a net margin of 21.20% and an ROE of 22.6%, and positive revenue growth combined with a low P/E ratio of 15.72 and a forward ratio of 9.14. Income-seeking investors can only laud its 20% payout ratio based on cash flow, and an outstanding average growth of 16% in its annualized dividend payment. Microsoft Corporation (NASDAQ:MSFT) has recently surpassed its earnings estimates by a margin of 8%, thanks to lively core business operations. In fact, the net operating cash flow increased in 2012 by 17%. This brought the free cash flow to $22.94 billion in 2012.
Microsoft Corporation (NASDAQ:MSFT) is now loosening up its unsuccessful multi-billion dollar acquisition AQuantive through its deal with Facebook for its Atlas Advertiser Suite, a tool that can elevate the competition between Facebook and Google for online display ads. The deal has just been approved by the US Federal Trade Commission. Another bit of positive news that can likely contribute to Microsoft Corporation (NASDAQ:MSFT)’s upturn is its recent win over the US ruling in its Xbox case.
Johnson & Johnson (NYSE:JNJ)
As with many fund managers, Blackrock’s dividend gem is Johnson & Johnson (NYSE:JNJ). With an annualized dividend payment of $2.40 per share, which has grown by an average annual rate of 7.5% within the last 4 years, a double-digit profit margin, and revenue growth of 8%, JNJ has proved its dividend income prowess. It has recently grown its net operating cash flow by 7.7% and has been surpassing earnings estimates during at least the last 4 quarters. And it looks like the robust rally in the stock price will continue as the company gets the nod from the FDA on its Type 2 diabetes drug. The disease is the most common variety, affecting about 24 million people. The first-of-its-kind drug only spells growth for this leading pharmaceutical company.
Oracle Corporation (NASDAQ:ORCL)
Oracle Corporation (NASDAQ:ORCL) could hardly go unnoticed by dividend income seekers for its over 40% average growth in dividend payments during the last three years. With high profitability, a net margin (ttm) of 28.45%, a low payout ratio based on cash flow of 8.8%, and a P/E ratio of 15.04 that shows a notable allowance for value appreciation, Oracle Corporation (NASDAQ:ORCL) remains an attractive addition to an investor’s portfolio. In fact, investors should take advantage of the recent plunge in the stock price as the company is poised to recover soon. The earnings for the quarter ending in May have been revised downward twice, but upward four times. The company’s net operating cash flow increased by a remarkable 22% in 2012, and so did its free cash flow, which stands at $11.89 billion for 2012. With this, Oracle Corporation (NASDAQ:ORCL) is currently boosting its communication segment after making a $2.1 billion acquisition of Acme Packet during the previous month and Tekelec for a still undisclosed amount. Tekelec is a provider of network signaling, subscriber data management, and policy control solutions for communications networks. This technology is the one being utilized by hundreds of customers in 100 countries across the world.
The Procter & Gamble Company (NYSE:PG)
The Procter & Gamble Company (NYSE:PG) pays a high annualized dividend of $2.21 per share. The company was able to grow this at an average growth rate of 9.3%. This popular dividend stock continues to pose double-digit profit margin and ROE. Its quarterly revenue has grown by about 2% year-over-year; in fact, it has consistently exceeded earnings expectations in all four quarters of 2012. However, the payout ratio based on cash flow at 46.2% is bordering the 50% mark. Its core business may have grown in 2012, as shown by the 0.4% growth in its net operating cash flow, but if the company intends to uphold its good reputation in dividend growth for the long term it has to do more than this.
A quick look at Blackrock’s dividend stocks provides a diverse set of dividend investment ideas that one can consider. If you do not have these yet in your portfolio, it is time to seriously consider them. I would take JNJ without question for its huge growth potential.
The article Top Dividend Stocks Chosen by Blackrock Advisors originally appeared on Fool.com and is written by Aubrey Tabuga.
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