5 Best Dividend Stocks To Invest In 2014

As we slide toward the end of the year, be aware that we actually can do year-end tax planning. Unlike the last few years, we aren’t caught between tax provisions that are set to expire and a Congress that meets through the holiday season trying to cut a deal. It looks like we have some certainty about what the tax law will be for at least 2013 and 2014.

Keep in mind that there are several new or renewed provisions that increase taxes. The Pease limitation on itemized deductions and the phaseout of personal and dependent exemptions are back in the law. High income taxpayers (married couples with adjusted gross income above $300,000 and singles above $250,000) are subject to these.

Also, the top tax rate on long-term capital gains and qualified dividends was raised to 20%. But keep a couple of other points in mind. Only those in the top income tax bracket pay the 20% rate. Most others pay a 15% top rate. Even better, remember that the 0% tax rate on long-term capital gains and qualified dividends was made permanent. Those below the top of the 15% pay 0% on capital gains and dividends. The 0% rate applies to married couples filing jointly with taxable incomes below $72,500 and singles below $36,250.

Top 10 Gas Utility Companies For 2015: Cornerstone Progressive Return Fund(CFP)

Cornerstone Progressive Return Fund is a closed-ended equity fund of fund launched and managed by Cornerstone Advisors, Inc. The fund invests funds investing in the public equity markets of the United States. It invests in stocks of companies operating across diversified sectors. Cornerstone Progressive Return Fund was formed on April 26, 2007 and is domiciled in the United States.

Advisors' Opinion:

• [By Dan Caplinger]

  But you can see in several places the consequences of the stampede toward high yield. Here are just a few:

  Closed-end funds Cornerstone Progressive (NYSEMKT: CFP  ) and Pimco High Income (NYSE: PHK  ) both make fixed payments back to fund shareholders on a monthly basis, and their distribution yields are truly extraordinary, at about 17% and 12%, respectively. Those dividends have enticed shareholders to pay $1.30 to $1.40 or more for each $1 of assets in the funds. Yet during most months, a substantial portion of those distribution payments has simply been a return of investor capital rather than true income from the funds' investments. A recent study discussed in The Wall Street Journal found that returns on a portfolio with a combined value and dividend-income strategy outperformed a strategy focused more exclusively on maximizing dividends by an average of 1.7 percentage points per year, a huge edge in long-run returns. In the dividend ETF arena, most funds tend to focus on maximizing yield. Although the popular Vanguard Dividend Appreciation (NYSEMKT: VIG  ) ETF bucks the trend by screening first for consistent dividend growth and only then looking at yield as a factor, many rival ETFs start with high-yielding stocks as their baseline and only then consider other desirable traits. Others focus solely on high-dividend niches of the market, such as iShares FTSE NAREIT Mortgage-Plus (NYSEMKT: REM  ) and its concentration on high-yield mortgage REITs.

  When dividend stocks get too popular, their prices get out of line with both their dividend income and the fundamentals of the businesses that underlie those stocks. In simpler terms, when dividend stocks become bad values, it's time to consider looking elsewhere for a margin of safety.

5 Best Dividend Stocks To Invest In 2014: Kohlberg Capital Corporation(KCAP)

Kohlberg Capital Corporation is a private equity and venture capital firm specializing in buyouts and mezzanine investments. It focuses on mature and middle market companies. The firm structures its investments through senior debt, second lien debt, secured and unsecured subordinated debt, mezzanine debt, and equity. It invests in all sectors except cyclical industries. The firm invests equity in both minority and control transactions alongside other equity investors. It invests through its own balance sheet. Kohlberg Capital Corporation is based in the New York, New York.

Advisors' Opinion:

• [By Monica Gerson]

  KCAP Financial (NASDAQ: KCAP) is projected to report its Q4 earnings at $0.25 per share on revenue of $13.27 million.

  Home Inns & Hotels Management (NASDAQ: HMIN) is estimated to post its Q4 earnings at $2.18 per share on revenue of $1.54 billion.

5 Best Dividend Stocks To Invest In 2014: R.R. Donnelley & Sons Company(RRD)

R.R. Donnelley & Sons Company provides pre-media, printing, logistics, and business process outsourcing products and services to private and public sectors worldwide. The company operates primarily in the commercial print portion of the printing industry, with related product and service offerings designed to offer customers solutions for communicating their messages to target audiences. Its products and related service offerings include magazines, catalogs, retail inserts, books, directories, financial print, direct mail, forms, labels, office products, statement printing, pre media, and logistics services. The company also offers business process outsourcing services that comprise transactional print and outsourcing services, statement printing, direct mail, and print management services; and product configuration, customized kitting, and order fulfillment for technology, medical device, and other companies. It distributes its products to end-users through the United Sta tes postal services, retail channels, electronically, or by direct shipment to customer facilities. R.R. Donnelley & Sons was founded in 1864 and is based in Chicago, Illinois.

Advisors' Opinion:

• [By Dan Burrows]

  R.R. Donnelley (RRD)

  RRD Price/LFCF: 9.4
  RRD Dividend Yield: 6.7%

  It’s hard to find a more boring company than R.R. Donnelley (RRD). It both prints and creates custom content (e.g., annual reports) for private and public companies.

5 Best Dividend Stocks To Invest In 2014: 3M Company(MMM)

3M Company, together with subsidiaries, operates as a diversified technology company worldwide. The company?s Industrial and Transportation segment offers tapes, coated and non-woven abrasives, adhesives, specialty materials, filtration products, energy control products, closure systems for personal hygiene products, acoustic systems products, and components and products that are used in the manufacture, repair, and maintenance of automotive, marine, aircraft, and specialty vehicles. Its Health Care segment provides medical and surgical supplies, skin health and infection prevention products, inhalation and transdermal drug delivery systems, dental and orthodontic products, health information systems, and food safety products. The company?s Display and Graphics offers optical film solutions for LCD electronic displays; computer screen filters; reflective sheeting for transportation safety; commercial graphics sheeting and systems; and mobile interactive solutions, includin g mobile display technology, visual systems products, and computer privacy filters. The company?s Consumer and Office segment provides office supply products, stationery products, construction and home improvement products, home care products, protective material products, certain consumer retail personal safety products, and consumer health care products. Its Safety, Security and Protection Services segment offers personal protection products, safety and security products, cleaning and protection products for commercial establishments, track and trace solutions, and roofing granules for asphalt shingles. The company?s Electro and Communications segment provides packaging and interconnection devices; fluids that are used in the manufacture of computer chips, and for cooling electronics and lubricating computer hard disk drives; high-temperature and display tapes; insulating materials, including tapes and resins; and related items. The company was founded in 1902 and is based in St. Paul, Minnesota.

Advisors' Opinion:

• [By WALLSTCHEATSHEET]

  Given its strong history of successful research and development, as well as its substantial economies of scale in over 200 countries, 3M�� competitive advantage should remain in tact over the long term. The company reported strong second quarter earnings, underscored by a continued ability to generate significant free cash flow. Moreover, the company is actively returning its cash balance to investors, in the form of share repurchases and dividend increases. Its investment in emerging markets is paying off, as healthcare and infrastructure spending in Latin America and Asia continue to grow. While the company is expensive relative to its historical price to earnings multiples, it is not likely to grow cheaper in the near-term, given its strong second quarter. Still, 3M�� steady earnings and dividend growth make it a long-term buy. 3M is an OUTPERFORM.