Harry Domash's Winning Investing


 Seven Dividend Stocks For 2015 

It's that time of year again. I'm going to suggest seven stocks for you to consider for 2015.

Last year's list averaged a disappointing 6% return, far short of the S&P 500's 12% return for the year.

My portfolio's returns were squashed by Meridian Bioscience's (VIVO) 37% loss. The maker of medical diagnostic test kits ran into tough competition and the resulting price cuts depressed earnings. Another pick, natural gas pipeline operator Plains GP Holdings (PAGP), got hit by the energy sector downturn and ended the year with a 1% loss. My remaining five picks were: NextEra Energy (NEE), up 26%, Wells Fargo Bank (WFC), up 23%, Blackstone Mortgage Trust (BXMT), up 14%, Cinemark Holdings (CNK), up 13%, and Verizon Communications (VZ), up 1%.

Here's this year's list. I know that it's somewhat unfashionable, but this is a "buy and hold" portfolio; that is, these stocks are intended to be held until year's end. All are dividend payers. That way, if the market tanks, you'll still be collecting dividends while you wait for an upturn.

Six Flags Entertainment (SIX)
A repeat from two-years-ago, Six Flags owns and operates 16 amusement parks in the United States, one in Mexico City and one in Montreal, Canada. Six Flags has a troubled past, emerging from a 2009 bankruptcy in 2010. Shortly thereafter, the firm brought in a new CEO who has embarked on an aggressive program to grow revenue by adding major new attractions to the parks. It has worked. September quarter earnings and cash flow were both up double-digits vs. year-ago. Moreover, Six Flags will benefit from lower gasoline prices, which should put more money in people's pockets in 2015. Also adding to its long-term outlook, Six Flags recently announced plans to build new theme parks in China and Dubai. Current dividend yield is 4.8%.

Cinemark Holdings (CNK)
Cinemark, a repeat from 2014, is one of the largest U.S. movie theater operators, another sector likely to benefit from lower gasoline prices. Further, in addition to more than 330 theater complexes in the U.S., Cinemark owns over 150 theaters in Latin America, which is a faster growing market. Thanks to a lack of appealing product, movie attendance was down in 2014, but analysts expect higher grossing movies this year. Yield 2.8%.

Hospitality Properties Trust (HPT)
Hospitality owns hotel properties that it leases to major operators such as Marriott and Wyndham. It also owns travel centers located adjacent to interstate highways. Both the hotel and travel center businesses should also benefit from lower gas prices. Hospitality is a real estate investment trust (REIT), which is similar to a regular corporation except that REITs don't pay federal corporate taxes if they distribute at least 90% of taxable income to shareholders as dividends. Yield 6.2%.

Macquarie Infrastructure Trust (MIC)
Macquarie owns and operates a variety of infrastructure properties, the largest segment being corporate and private airplane repair and fueling facilities located at airports. These are also businesses likely to benefit from lower fuel costs. Although organized as trust, MIC is treated as a corporation for income tax reporting purposes. Yield 5.6%.

Physicians Realty Trust (DOC)
A July 2013 IPO, Physicians, also a REIT, owns healthcare properties leased to physicians, hospitals and other healthcare operators. Its properties are typically on a campus with a hospital and/or other healthcare facilities. Being a recent IPO, Physicians is still in fast-growth mode. Yield 5.3%.

Tekla Life Sciences (HQL)
Tekla is a closed-end fund that focuses on U.S.-based biotechnology and pharmaceutical stocks, expected to be a hot industry again in 2015. Closed-end funds are similar to conventional mutual funds, but unlike conventional funds that sell and redeem shares as needed, CEFs sell a fixed number of shares via an IPO. After that, the funds trade like stocks. For reasons too involved to spell out here, CEFs should outperform conventional mutual funds specializing in the same sector. Yield 7.3%.

Wells Fargo (WFC)
Another repeat from 2014, Well Fargo, one of the largest U.S. banks, offers retail and commercial banking, insurance, investment, mortgage, and consumer finance services, coast to coast. Large banks in general should do well again this year, and, as I commented last year, "Wells Fargo is as good as it gets." Yield 2.7%.

These are my ideas. However, do your own due diligence before you act. The more you know about your stocks, the better your results.

published 1/12/15

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