As Fast Money series producer John Melloy wrote earlier today in his blog, the iShares Dow Jones Select Dividend ETF is doubling the return of the S&P 500 over the last 1 month, reflecting a rotation out of the riskier (and non-income generating) trades like gold and into some good old-fashioned steady eddies. We've highlighted this trade throughout the month on the show as well as in this space. The ETF in this chart seeks to track companies that have stable dividend payouts that they increase consistently over time.
One reason why this trade is working is because the threat of dividend cuts, especially in the financial sector, is starting to lift. There have been zero dividend cuts or suspensions this month, according to Howard Silverblatt of Standard & Poors. What's more, with stocks already up more than 60 percent off their lows, investors believe valuations are stretched and believe price appreciation will be a smaller portion of overall stock returns next year. Dividends will take on a more crucial role, as they have throughout history to you Benjamin Graham fans.
As you might imagine, the Fast Money gang has plenty of dividend picks. They follow:
"I like Ship Finance for dividend yield," says Karen Finerman.
"Verizon is my dividend yield play," says Guy Adami.
"Piedmont is also worth a look," adds Joe Terranova.
"I’m looking at the utilities ETF," explains Pete Najarian. "Or you can play it with TECO and/or FPL."
"Also I like generic names in Pharma that pay a dividend. And I’m also watching General Mills and Coke," he adds.
-With reporting by Prasanna Subramanian
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Trader disclosure: On December 22nd, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (INTC), (MSFT), (NUE), (BTU), (AGU), (C), (GS); Pete Najarian Owns (CLF), Is Short (CLF) Calls; Pete Najarian Owns (MS), Is Short (MS) Calls; Pete Najarian Owns (MRVL); Pete Najarian Owns (STX) Calls; Pete Najarian Owns (UUP) Call Spread
For Joe Terranova
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (CLB)
Virtus Investment Partners Owns More Than 1% Of (DLR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (UA)
For Jon Najarian
Jon Najarian Owns (RYL)
Jon Najarian Owns (KBH)
For Eric Beder
Beder Owns (ANF)
Beder Owns (TGT)
Brean Murray, Carret & Co. Is A Market Maker In (BEBE), (CACH), (TRLG), (WTSLA), (URBN)
For Peter Schiff
Schiff Owns Gold
Finerman's Firm Is Short (IJR)
Finerman's Firm Is Short (MDY)
Finerman's Firm Is Short (SPY)
Finerman's Firm Is Short (IWM)
Finerman Owns (AAPL)
Finerman's Firm Owns (BAC) Preferred, (BAC), (BAC) Call Spread
Finerman Owns (BAC) Preferred, (BAC)
Finerman's Firm Owns (BDX)
Finerman's Firm Owns (BCR)
Finerman's Firm Owns (MSFT)
Finerman's Firm Owns (PLCE)
Finerman's Firm Is Short (TLT)
Finerman's Firm And Finerman Own (WFC) Preferred
Finerman's Firm Owns (WMT)
Pete Najarian Owns (CAT) Calls
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