The Ultimate Stock-Pickers’ Top 10 Dividend Stocks

What looks to be shaping into a potential trade for some income-seeking investors is the appearance of a handful of oil-related stocks-- ConocoPhillips (COP), Occidental Petroleum (OXY), National Oilwell Varco (NOV), and Exxon Mobil (XOM)--on our list of top 10 dividend-yielding stocks held by our Ultimate Stock-Pickers. No doubt, this is in response to the impact that the dramatic drop in oil prices has had on the price of oil company stocks the last couple of quarters, as the yields on these firms' shares have risen enough to supplant other names on the list.

Even as our Energy team has reset its expectations for midcycle oil prices (from $100 per barrel to $75 per barrel for Brent crude oil), taking the group of oil-related stocks that Morningstar covers from a price-to-fair value multiple of about 80% to near 90%, there still are a few bargains in the group. Our screen of top dividend-paying stocks tries to hone in on the highest-quality names that are currently held with conviction by our top managers. We do this by taking an initial list of more than 500 different dividend-paying stocks held by our Ultimate Stock-Pickers, and focusing in on firms that we think not only have competitive advantages that should allow them to generate the cash flows they'll need to maintain their dividends longer term, but be able to do so with far less uncertainty.

Source: Morningstar

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