The Big Dividend Report

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Welcome to the second issue of The Big Dividend Report!

For new readers, my aim in this series is to check under the hood of the biggest dividends in the market and keep you updated on the latest and greatest. We will limit ourselves to the biggest 20 dividends coming from companies with at least $2 billion in market cap.

In our first go-round, we looked at the payout ratio, the most fundamental metric to check for dividend health.

Today, we'll look at those same 20 companies and see their price changes since July 22 -- the height of the stock market before the S&P 500 fell 16.5%.

Company

Sector

Dividend Yield

Stock Price Change Since 7/22

American Capital Agency (NAS: AGNC)

Real Estate

19.6%                          

(4%)                         

Chimera

Real Estate

17.3%                          

(10%)                         

Hatteras Financial

Real Estate

14.8%                        

(6%)                         

Annaly Capital (NYS: NLY)

Real Estate

14.6%                          

(1%)                         

MFA Financial

Real Estate

13.6%                        

(6%)                         

Cellcom Israel

Telecommunication Services

12.2%                          

(16%)                         

Portugal Telecom

Telecommunication Services

11.5%                          

(9%)                          

Cheniere Energy Partners LP (ASE: CQP)

Energy

11.1%                          

(22%)                         

Frontier Communications (NYS: FTR)

Telecommunication Services

10.8%                          

(11%)                         

Inergy, L.P.

Energy

10.6%                          

(19%)                         

BP Prudhoe Bay Royalty Trust

Energy

9.8%                           

(7%)                         

Veolia Environnement (NYS: VE)

Utilities

9.7%                         

(42%)                         

Terra Nitrogen Company, L.P. (NYS: TNH)

Materials

9.4%                           

2%                          

YPF S.A.

Energy

9.4%                           

(12%)                         

Hospitality Properties Trust

Real Estate

8.6%                           

(18%)                         

Windstream

Telecommunication Services

8.6%                           

(8%)                         

CenturyLink

Telecommunication Services

8.6%                           

(13%)                         

Nokia Corp. (NYS: NOK)

Information Technology

8.3%                           

(1%)                         

Southern Copper

Materials

8.3%                           

(17%)                         

Pengrowth Energy Corp.

Energy

8.3%                           

(17%)                         

Source: Yahoo! Finance and Capital IQ, a division of Standard & Poor's.

On average, the stocks of these big dividend payers have fallen slightly less than the S&P 500. But there's no great lesson there given that we're only talking a few weeks.

In this environment, I like to look for bargains among the drops. Frontier has been on my watchlist for a while, and now that its yield has hit double digits, I finally bit the bullet and bought in earlier this month. There's still much uncertainty regarding whether Frontier will be able to maintain its hefty dividend as it incorporates the assets of a Verizon deal that tripled its size. I like what I've seen so far, but operational risk (and the servicing of its increased debt load) is something I will continue to monitor.

Aside from Frontier, what's interesting to me are the outliers: stocks that have fallen much more than average, as well as the ones that have fallen much less than average (or even gained ground).

French waste-management and water supply company Veolia was the biggest loser with a 42% drop that has boosted its dividend yield to near 10% and thrust its forward P/E ratio well below 10. Natural gas receiving terminal operator Cheniere Energy Partners is the only other company on this list that's fallen more than 20%. Read more about its prospects here.

On the other side, it's interesting to note that Terra Nitrogen is up slightly, and three companies fell less than 5% -- Nokia, Annaly Capital, and American Capital Agency. Usually, I'm trolling for future winners among the price losers, but for Annaly, American Capital Agency, and the other mortgage REITs, the lack of a stock price drop is at least partially the result of good news: the Fed's announcement that it will keep short-term interest rates low until at least the middle of 2013.

This ends our second issue of The Big Dividend Report. To keep track of all our analysis on any of these companies, including future issues of The Big Dividend Report, click here to add them to My Watchlist.

At the time this article was published Anand Chokkaveluowns shares of Frontier Communications.The Motley Fool owns shares of Annaly Capital Management, Chimera Investment, and Veolia Environnement.Motley Fool newsletter serviceshave recommended buying shares of Cellcom Israel. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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