Best of the Week
Most Popular
1.U.S. Housing Bull Market Over? House Prices Trend Forecast Current State - Nadeem_Walayat
2.The Coming U.S. Economic Collapse Will Trigger a Revolution - Harry_Dent
3. Stock Market Crash a Historical Pattern? - Wim_Grommen
4.Global Panic - U.S. Federal Government Stockpiling Ammo – Here’s What We’re Going to Do - Shah Gilani
5.AI, Robotics, and the Future of Jobs - Aaron Smith
6.This is Your Economic Recovery With and Without Drugs - James_Quinn
7.Gold and Silver Price Getting Set To Explode Higher - Austin_Galt
8.The Something for Nothing Society - Lifecycle of Bureaucracy - Ty_Andros
9.Another Interesting Stock Market Juncture - Tony_Caldaro
10.Inflation vs the Deflationary Straw Man - Gary_Tanashian
Last 5 days
Bitcoin Price Might Move Shortly - 2nd Sep 14
Why Brent Crude Oil Prices Won’t Fall Below $100 a Barrel - 2nd Sep 14
3 Important Gold Charts - Transparent Holdings Fall As Bullion Goes East To Russia and China - 2nd Sep 14
NWO Enforcer: NATO Threatens WW III - 2nd Sep 14
"Financialization" Will Ruin America. Unless We Do This... - 2nd Sep 14
Stock and Commodity Market Ratio Messages - 2nd Sep 14
Gold Price - The Thin End of the Wedge - 2nd Sep 14
U.S. Inflation Pressures in Core Food Components - 2nd Sep 14
Independent Scotland Currency, Plan A, B, C or D - British or Scottish Pound? - 2nd Sep 14
Gold and Silver Price A Critical Juncture - 2nd Sep 14
Gold and Silver Precious Metals Complex Contradiction and Potential - 2nd Sep 14
France And The Long-Gone Thatcher Moment - 2nd Sep 14
Stock Market Approaching An Important High? - 2nd Sep 14
Gold, Silver Price Summer Doldrums Coming to an End - 2nd Sep 14
The Ultimate Demise Of The Euro Union - 1st Sep 14
Palladium Price Breaks Multi-Year High Over $900 - 1st Sep 14
When Complexity Becomes Chaos - 1st Sep 14
Designer War By Default - 1st Sep 14
Islamic State or Russia? Ten Key Questions Towards Pragmatism - 1st Sep 14
Mixed Emotions for the Gold Market - 1st Sep 14
These Clowns Are Dragging Us Into War with Russia - 1st Sep 14
Marx And The Capitalist Cancer Of Overproduction - 1st Sep 14
Scottish Banks Salivating at the Prospects for an Independent Scotland of 6 Million Debt Slaves - 1st Sep 14
Small Man Europe Is Now In “Effective State Of War” With Russia - 31st Aug 14
The Unintended Blowback Of False Flags - 31st Aug 14
Tesco Supermarket Death Spiral Latest Profits Warning and Dividend Slashed - 31st Aug 14
Dow, Gold and Silver - A Last Stand, A Fake Out And A Surge - 31st Aug 14
If U.S. Consumers are so Confident Why aren't They Spending? - 31st Aug 14
Scotland Independence House Prices Crash, Deflationary Debt Death Spiral - 31st Aug 14
Obama’s “Catastrophic Defeat” in Ukraine - 30th Aug 14
Stock Market Inflection Point Approaching - 30th Aug 14
Gold And Silver - Elite's NWO Losing Traction. Expect More War - 30th Aug 14
Corporations Join Droves of Americans Renouncing US Citizenship - 30th Aug 14
Peter Schiff U.S. Housing Market, House Prices Bubble Warning - 30th Aug 14
Russia, Ukraine War - It’s Time to Play the “Gazprom Card” - 29th Aug 14
The One Tech Stock Investment You Should Never Sell - 29th Aug 14
Bitcoin Price $500 as Current Downside Barrier - 29th Aug 14
Don't Get Ruined by These 10 Popular Stock Market Investment Myths - 29th Aug 14
Low Cost Transcontinental Gold - 29th Aug 14
Gold Bullish Central Banks Should Give Money Directly To The People - Helicopter Janet? - 29th Aug 14
US House Prices Bull Market Over? Trend Forecast Video - 29th Aug 14
The Fed Meeting at Jackson Hole Exposed Yellen’s Greatest Weakness - 29th Aug 14
AAPL Apple Stock About To Get sMACked - 29th Aug 14
A History of Unlimited Money: Learn From It or Repeat Its Mistakes - 29th Aug 14
How You Can Play to Win When Market Makers Are Calling the Shots - 28th Aug 14
EU Gas Supply Is In Real And Imminent Danger - 28th Aug 14
Central Banks at the Root of Evil - 28th Aug 14
European Bond Market: Bubble of all Bubbles! - 28th Aug 14
Employers Aren’t Just Whining: The “Skills Gap” Is Real - 28th Aug 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

The Biggest lie in Stock Market History Revealed

How to Find the Best Dividend Paying Stocks

Companies / Dividends Apr 19, 2013 - 12:18 PM GMT

By: Money_Morning

Companies

Diane Alter writes: It's only April, but it appears dividend payouts this year will soar past 2012's tally - meaning all investors need to know how to find the best dividend stocks or risk missing out on record-high yield.

Barron's reports that in Q1, 944 of approximately 10,000 U.S. companies boosted payouts, either by increases, extras or resumption. That was up a hefty 39.4% from 677 companies a year ago.


Dividend increases alone tallied $14.5 billion. Cash payments jumped 12%, while the forward indicated dividend rate reached an all-time high.

The following favorite dividend stocks are among those that juiced payouts in the first quarter:

■3M Co. (NYSE: MMM) raised its dividend 8% to $0.63 per share.
■General Electric Co. (NYSE: GE) increased quarterly payment 12% to $0.19 per share.
■Pfizer Inc. (NYSE: PFE) hiked its dividend by 9% to $0.24 per share.
■The Home Depot Inc. (NYSE: HD) boosted its quarterly dividend 34% to $0.35.
With dividends on the rise, investors can't afford to pass up the security and income dividend stocks have to offer.

We asked our Money Morning income expert Martin Hutchinson for more information on how to find the best dividend stocks for your portfolios.

Increasing Demand for Dividend Stocks
Amid five years of near-zero interest rates, dividend stocks have taken on a new revered status.

Indeed, dividends matter.

Over the last 36 years, dividend stocks have outperformed the rest of the S&P 500 by 2.5% annually. Moreover, in addition to paying out cash to shareholders, dividend payers still beat nonpayers by nearly 8% every year, according to Ned Davis Research.

A key consideration about dividends is that investors are rewarded in the traditional way- cash.

With a growing class of dividend payers, investors ought to be selective. That's why we have narrowed down the selection process.

How to Find the Best Dividend Stocks
The best place to start is with heirloom stocks.

"These are stocks you buy, hold and watch them grow-steady earners you can rely on to fund a growing prosperity in retirement, or leave to your grandchildren knowing that the expenses of their lives will be safely covered," said Hutchison. These select stocks "should be an important base of any portfolio, especially one used for retirement purposes."

Heirloom stocks have some distinct investment advantages including:

■Their annually increasing dividend generally moves the stock price higher over time.
■They provide increasing income as well as capital growth.
■As legacy stocks, they are ideal for retirement planning.
■They provide considerable protection against inflation.
■If the company maintains its track record, you never need to sell them.

Where to Find Heirloom Stocks
In all, there are 82 to choose from, with yields ranging from 0.8% to 11.3%.

But simply chasing yield is never prudent. Instead, hunt for stocks with a minimum yield of 2%.

Also key is buying stocks that will maintain their lengthy track record of boosting dividends.

This choice group of 82 stocks has not just paid dividends for 30 plus years, they have also boosted payouts in every one of those years.

Here are a few of Hutchinson's top dividend stocks:

■The Procter and Gamble Co. (NYSE: PG), the consumer products company, has increased its dividend every year since 1954. It yields around 3.0% and its P/E is 17.5 times. The company's dividend has increased 8.2 times since 1993 and its return on equity is 17.5%. As heirloom stocks go, PG is top quality.
■Emerson Electric Co. (NYSE: EMR), provides electrical engineering products and services. It has increased its dividend every year since 1957. Its yield is 2.9% and its P/E is 20.4 times. The company's dividend has increased 4.6 times since 1993 and its return on equity is 20.1%. Again, a top quality Heirloom Stock, albeit a little expensive at the moment.
■3M Company (NYSE: MMM) has increased its dividend every year since 1959. It has a yield of 2.5%, and a P/E of 16.4 times. It has enjoyed a less exciting 2.9 times dividend increase since 1993 but the consumer price index is up only 62% in that period. However, its return on equity is a stellar 26.6%. It may not be rapidly growing, but still makes for an excellent long-term investment.

Warning - Now that you know what to look for in dividend stocks, don't let a high-yield distract you, like the ones offered here: Beware These Three Dividend Stocks Ready to Slash Their Payout

Source :http://moneymorning.com/2013/04/18/how-to-find-the-best-dividend-stocks/

Money Morning/The Money Map Report

©2013 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Free Report - Financial Markets 2014