Two Dividend Investing Ideas for 2011

Greetings,

The S&P 500 Index has gained around 20% annually for the past two years.  That being said, many stocks no longer appear undervalued as they did back in the end of 2008 and beginning of 2009.  As a result, many are wondering where to invest now.

Here are a few options I am currently considering:

1) Abbott Laboratories (ABT): One of the reasons Abbott is a great buy right now, despite its attractive stock price, is two 'macro' ideas: First, Abbott is able to pass along its price increases to its customers without hurting its sales.   Abbott sustains its growth through making and selling a wide array of pharmaceuticals and medical devices, and has a decent drug pipeline; all reasons to believe Abbott can sustain its growth throughout the long term.  Second, Abbott, similar to Johnson and Johnson (JNJ), is a strong company with strong brands and unique products.  As a $74 billion health care conglomerate, Abbott has created a wide economic moat, and currently pays a healthy dividend of 3.86%

2) Magellan Midstream Partners LP (MMP): Magellan is a master limited partnership, and as a result, is an income-producing giant.  As one of the nations biggest pipelines for refined petroleum, it also can benefit from inflation through an increased demand for fuel as the economy recovers.  Furthermore, Magellan's inflation-indexed tariff business model provides opportunities for cash-flow despite a sluggish economy.  Finally, MMP boasts a large dividend of 5.31%.

Both Abbott and Magellan Midstream Partners are two solid companies worth considering this year.  As always, perform your due diligence before making an investment!

What are your thoughts on ABT and MMP?

Finally, I will continue to provide a new post each weekend.  Over the month of February I will continue look at some great dividend plays for 2011, and will highlight a few new companies each week.  Thanks for reading.

Full disclosure: Long ABT, JNJ.  See a complete list of my holdings under my 'Portfolio' Tab