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The Option Market's Favorite Dividend Champions

By: Kapitall
Posted: 3/8/2011 12:15:00 PM
Referenced Stocks: BKH;CTAS;MSA;PBI;TR

Compiled by Luis Gonzalez: If you're interested in income investing ideas, the following list might offer an interesting starting point.

The following is a list of dividend champions--stocks that have raised dividends every year for more than 25 consecutive years. 

In addition, all of these dividend stocks have seen a rapid increase in the number of open call option positions--suggesting that options traders expect some near-term upside for these names. For each stock we'll list the Put/Call ratio, which expresses the open call options positions relative to put option positions. 

Considering the options market's bullish sentiment, do you think these dividend champions are set for a rally? Full details below.

Options data sourced from Schaeffer's, short float and performance data sourced from Finviz. (Please note: All changes in the Put/Call ratio occur between 2/22  - 3/07)

Analyze These Ideas (Tools Will Open In A New Window)

1. Access a thorough description of all companies mentioned

2. Compare analyst ratings for all stocks mentioned below 

3. Visualize market cap changes for the top stocks mentioned


The list has been sorted by the change in the Put/Call ratio.

1. Tootsie Roll Industries Inc. (TR): Confectioners Industry. Market cap of $1.58B. Dividend yield 1.12%. Current Put/Call ratio at 0.8 vs. a previous ratio of 1.37 (41.61% change). 

2. Mine Safety Appliances Co. (MSA): Medical Appliances & Equipment Industry. Market cap of $1.27B. Dividend yield 2.86%. Current Put/Call ratio at 0.76 vs. a previous ratio of 1.18 (35.59% change). 

3. Black Hills Corporation (BKH): Electric Utilities Industry. Market cap of $1.23B. Dividend yield 4.67%. Current Put/Call ratio at 0.31 vs. a previous ratio of 0.42 (26.19% change). 

4. Pitney Bowes Inc. (PBI): Business Equipment Industry. Market cap of $5.03B. Dividend yield 6.0%. Current Put/Call ratio at 0.96 vs. a previous ratio of 1.2 (20.0% change). 

5. Cintas Corporation (CTAS): Business Services Industry. Market cap of $4.07B. Dividend yield 1.75%. Current Put/Call ratio at 0.17 vs. a previous ratio of 0.2 (15.0% change). The stock has gained 11.64% over the last year.