For the next year, while the market sentiment for major indices and blue chips is expected to be grey, you should consider promising small- or mid-cap companies that assure income growth through a favorable track record of dividend payments.
Here are three such companies which are going ex-dividend before the end of the year, so your portfolio can get off on a strong footing in 2016.
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1. CyrusOne Inc. (CONE - Get Report)
In the third quarter after the Cervalis Holdings LLC acquisition was complete, CyrusOne gained access to 31 Data Centers and recorded revenues of $111.2 million. Not only was this number higher by 31% year-over-year, but it also surpassed expectations by $2.62 million. Its normalized Funds From Operations (FFO) of $0.57 per share was also higher year over year by 30%.
These positive developments have further caused the management to revise guidance upwards and given investors confidence. The revised figures for Normalized FFO per common share or its equivalent now stands at $2.11-$2.15 from $2.07-$2.13.
Going forward too, CyrusOne has immense expectations from its Carrollton Data Center in Texas. While the facility is only partially built, it is still providing returns on investments. Once complete, CyrusOne sees the development yield rising 18-20%.
Considering its reputation of beating earnings estimates and a "hold" or better rating by all 15 analysts, this stock belongs to a class of reliable income generators that deserve a place in your dividend portfolio. The ex-dividend day is December 22.
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2. LTC Properties Inc. (LTC - Get Report)
Another REIT on the list is LTC Properties, which focuses on investments in senior housing. The highlight of this fund is the monthly dividend of 18 cents it announced, which will be paid on December 31. This figure displays an improvementfrom the 17 cents of September and earlier.
A $2.16 annualized dividend translates to an attractive dividend yield of 5.3%. The stock goes ex-dividend on December 21.
Hedge funds and analysts alike are bullish on LTC's future. By the end of the September quarter, eight hedge funds' portfolios included LTC Properties, up 60% from last quarter. Renaissance Technologies, AQR Capital Management, and Millennium Management were some of the big names to invest.
Among the analysts, Mitsubishi UFJ Financial Group reaffirmed its "overweight" rating on the stock while Canaccord Genuity and Mizuho gave a "buy" rating to the company.
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3. B&G Foods Inc. (BGS - Get Report)
B&G Foods is a stock with a strong track record of consistent performance. Shares of this two decade old company have risen more than 600% since 2009, and 16% just this year vs. a basically flat S&P 500.
The stock has even outperformed its Goliath competitor General Mills on dividend as well as a capital returns basis. While General Mills' stock grew just 10% this year, it also offers a lower dividend yield of 3% compared to B&G Foods' 4% yield.
In its nine years of listed history, the company has cut dividends just once (in 2008) and since then the dividend has pursued an almost linear growth path, with a current quarterly dividend of 35 cents that's more than double the 17 cents in 2009.
B&G Foods has a history of returning value to shareholders (half or more of free cash it has generated from accretive acquisitions).
The latest quarterly results showed a 2.1% year-over-year increase in revenues and a higher than expected earnings-per-share (EPS) of 39 cents. The company's management has a knack for picking smart acquisitions to drive growth and seems confident of continuing its strategy.
With the company's latest acquisition of Green Giant from General Mills, investors are likely to see share prices and dividends increase significantly.
With institutional positions in the stock rising and none of the eight analysts covering the stock having a negative outlook, B&G Foods is the stock to boost your portfolio without risking dividends.
With the ex-dividend date set for December 29, come on aboard before investors ring in the new year.
By Siddhi Bajaj
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