Dividend Stocks for the Festive Season - HCBK, LLY, KMB, PAYX

With the festive season here, economic data looking somewhat perkier and some people even lucky enough to get Christmas bonuses it makes sense that a part of your extra cash gets diverted into some high-yielding dividend stocks. Especially if you want a Christmas gift which keeps on giving.

Below are our four stocks dividend seeking investors should be slotting in their stockings this December:
Hudson City Bancorp Inc (HCBK):
Banking stocks have been out of favor with investors still reeling from the fallout of the global financial crisis, but this is one company which has come through with flying colors. Trading on a dividend yield of around 5% you can buy Hudson City (HCBK) on a historic price to earnings multiple of around 11 times earnings. For a bank which has won a number of accolades including "Best Managed" and "Most Efficient" bank by industry peers, this seems like a generous offering.
Bearing in mind that the entire banking sector has been under pressure due to the low interest environment and an unwillingness to borrow, the fact that the company is continuing to generate a return for shareholders should count in its favor. Over the period from December 2009 to 30 September 2010, total shareholders' equity increased $283.6m to $5.62bn.
It is hard to look beyond Hudson City (HCBK) if you want exposure to the financial services sector and are looking for dividend yield.
Eli Lilly Co (LLY)
You don't get much more defensive than the pharmaceutical sector and it would make sense to include an industry leader like Eli Lilly (LLY) in your portfolio.
On the plus side of the equation the stock is offering investors a yield of around 5.5% which is hard to argue with. On the negative side there has been a lot of bad publicity around the sector. In the most recent incident 12 people have died while testing the Melanoma drug Tasisulam which has evoked a consumer and regulatory backlash.
Unfortunately this is the nature of the beast when investing in the pharmaceutical sector. The returns are good but from time to time will be negatively impacted by drug related issues.
It should be remembered that Eli Lilly (LLY) was founded in 1876 and has continued to evolve over time. It has seen good and bad times and continues to churn out shareholder returns.
Kimberly-Clark Corporation (KMB)
You can't complain too much about a 4% dividend yield when you are paying just 13 times earnings for one of the premier listed industrial stocks, especially when that company specializes in providing products which are used once, scrunched up and thrown in a rubbish bin or flushed down the toilet.
It sounds simplistic but investors should remember that everyday 1.3 billion people - nearly a quarter of the world's population - make use of Kimberly-Clark (KMB) products.
The company has recently announced that it has joined the United Nations Global Compact, the world's largest corporate citizenship and sustainability initiative. This should reassure investors that Kimberly-Clark (KMB) will be around well into the future.
Paychex (PAYX)
Small business is all the talk at the moment. As countries invest further in the sector to stimulate employment, there will be increased demand for support services to help these businesses operate.
With that in mind investors can't go too far wrong backing Paychex (PAYX). The company is offering a 4% yield and while it looks a little steep on historic earnings, the company is well positioned to see earnings recover smartly in the coming years.
So in conclusion - Christmas is a time when investors should be able to enjoy the fruits of their labor but shouldn't forget that there is plenty of merit in seeking out dividend yielding stocks to bolster their long-term returns.

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