Dividend Tycoon

Capstead Mortgage (ticker CMO) was up almost 5% on an upgrade by Keefe Bruyette from market perform to outperform.

Capstead Mortgage currently has a 17.5% dividend yield.

Capstead Mortgage should continue to be a strong company as long as the US continues to keep interest rates at their record low.

Diversification is a word that everyone throws around.  It is good make sure your portfolio is well diversified in many industries, but be careful how much you diversify!  Over diversifying can also hurt your returns.  The more you diversify the less your risk, but the less your returns.  If you own 1 company and it goes bankrupt you loose everything, if you own 10 companies equally and one goes bankrupt, that’s 10 percent of your portfolio, if you have 100 companies and 1 goes bankrupt, that’s only 1% of your portfolio, but if you have one company and it doubles, your whole account doubles, if you have one stock that doubles in a 10 stock portfolio, your account will increase 10%.  If you have one stock that doubles and you have a 100 stock portfolio, your account will only increase 1%.  Over diversification will cut back on losses, but will hamper returns.  As the market always increases over time, the more diversified you are, the less chance you have of truly getting rich in the stock market, and just getting average returns.

Disney has won approval for a Disneyland style theme park in Shanghai from the central government of China.  Disney expects to open it’s $3.5 billion dollar park within 5 to 6 years.  The initial resort will include hotels, shopping, and a Magic Kingdom style park in a 1,000 acre area of the cities Pudong district.

Disney’s goal is to create a real drive in demand among China’s 1.3 billion residence for other Disney products.  Disney will own about 40% of the resort with a holding company for a group of Chinese companies owning the rest of the resort.

Nordic American Tanker Shipping (NAT) is our first stock added to our recommended dividend stock list.  NAT has been added at $32.42 giving a current dividend rate of 10.6%.  While the tanker market is currently in horrible shape (tanker spot rates continue to remain in a state of collapse, over supply of tankers being added to the market, and huge OPEC cuts currently in the market).  We feel the bad news is all out and priced into the stock.  With oil prices continuing to increase OPEC shouldn’t cut any more oil supplies, we feel the tanker market will start to improve in the next 12 months and removal of the single hull tankers in 2010 and an improving economy will be the drivers of this.  With little to no long term debt, NAT has one of the lowest cash break-even levels in the business at a break-even level of less than $10,000 in costs per day per ship.

Dividend Tycoon is your tool to finding some of the best dividend paying stocks available.  Dividend paying stocks won’t make you instantly rich, it’s doubtful any of them will be the next Microsoft, but they will give you more than just normal stocks capital gains, they also give you incoming cash flow.

Capital gains are a great way to make money in an up market, but in the market we have had over the past year, almost all companies have created negative capital gains.  If you had purchased Chico’s (CHS) two years ago at $27.25 per share your stock would currently be trading at $7.25 per share.

Companies paying dividends can have the same negative capital gains as companies not paying dividends, but dividend payers also have the added advantage of cash flow.  If you had purchased Nordic American Tanker Shipping (NAT) two years ago at $44 per share, it would currently be worth $33 per share.  But during that time you would also have gotten cash flow of $8.11 per share.