Out Fox The $treet

Though investors had every right to expect the defense sector to struggle over the last year, the way defense stocks Lockheed Martin ( NYSE: LMT     ), Northrop Grumman ( NYSE: NOC     ), and Raytheon ( NYSE: RTN     ) spent their precious shareholder capital sent other signals. Coming into 2012, these three businesses poured substantial amounts into share buybacks. In addition, all three pay solid dividends, providing astute investors signs that their ability to generate strong cash flows might have exceeded the market's expectations. Read the full article here . Disclosure: Long LMT and NOC. Please review the disclaimer page for more details. 

The defense sector has been under attack for the last few years as federal government budget cuts pressure the major companies in the sector. The surprising part is that the associated stocks continue to support very strong dividend yields combined with major stock buyback programs. Lockheed Martin (NYSE: LMT ) , Northrop Grumman (NYSE: NOC ) , and Raytheon Company (NYSE: RTN ) have not only survived the cuts, but in most cases the companies more » Disclosure: Long LMT, NOC, RTN. Please review the disclaimer page for more details. 

This model was up 5.2% in June versus a 4.0% gain for the benchmark S&P 500. As expected the model jumped back after a weak May as investors jumped back into high yielding stocks. Trade No trades were made this month, but several stocks remain on the radar to sell as dividend stocks continue to outperform the market. Some of these stocks are reaching valuation levels were capital gains are likely to be limited for possibly the next few years. Bottom Performers With a strong market in June, it is always worthwhile to review the losing stocks to confirm the long term story remains intact. The model ended the month with 26 stocks, which is slightly higher than normal, and only two stocks had a negative price change. WellPoint (WLP) was particularly weak following the Supreme Courts upholding of Obamacare.  The stock had a nice gain for June until the ruling came out and caused the stock to plummet from near $70 to close the month at $63.79. The company ha...

Nothing like taking a financially strong sector combined with fears of cutbacks to provide for some exciting yields. With major government budget cutbacks expected in the US, the defense sector went through a few rough quarters in 2011. Investors feared the worse. At the end of the day though, the companies remain strong and according to a Bloomberg report, most of the top dividend yielding stocks in the Capital Goods sector belong to the defense sector. Read the full article at Seeking Alpha. Disclosure: Long LMT and RTN. Please read the disclaimer page for more details. 

This report is very behind schedule this month, but I thought it was worth writing anyway. This model continues to work well and the word needs to get out more about the advantage of net payout yields over just focusing on dividends. November was yet another solid month, with a 0.05% gain for this portfolio, on both a relative and absolute basis, as the benchmark S&P 500 lost 0.51%. When the market has down months this model continues to shine and overtime the results become much more evident. For the last 12 months, the portfolio was up 12.72% versus the 5.63% for the benchmark. Despite all the volatility in the markets, the Net Payout Yields Model has had a great absolute and relative performance. Trades The model had only one trade in November. Lowes (LOW) was purchased on November 1st as the net payout yield (NPY) surpassed 16% at the end of October. While LOW only paid a dividend of 2.6% at the time, 2.3% now, the company bought back a significant amount of stock in the f...