Best of the Week
Most Popular
1.UK House Prices BrExit Crash NOT Likely Despite London Property Market Weakness - Nadeem_Walayat
2.BrExit Morning - New Dawn for Britain, Independence Day! - Nadeem_Walayat
3.LEAVE Wins EU Referendum - Sterling and FTSE Hit Hard, Pollsters, Bookies and Markets All WRONG! - Nadeem_Walayat
4.BrExit Implications for UK Stock Market, Sterling GBP, House Prices and UK Politics... - Nadeem_Walayat
5.Trading BrExit - Stocks, Bonds, Sterling, Opinion Polls, Bookmaker Odds and My Forecast - Nadeem_Walayat
6.FTSE and Sterling Brexit Trading, Deconstruction of the EU Referendum Result - Nadeem_Walayat
7.UK Interest Rate Cut to 0.25% Imminent and More QE Money Printing - Nadeem_Walayat
8.Trading BrExit - British Pound Plunges, FTSE Stock Futures Slump on LEAVE Shock Referendum Win - Nadeem_Walayat
9.The Stock Market is Reading it Wrong! - Chris_Vermeulen
10.Breakouts Galore in Gold and Silver - Jordan_Roy_Byrne
Free Silver
Last 7 days
On the Italian and Eurozone Doomsday Scenario - 27th July 16
Japan's "Helicopter Money" Play: Road to Hyperinflation or Cure Debt Deflation? - 27th July 16
Monetary Zika - The Insidious Nature of Credit Expansion - 27th July 16
Gold and Pork Bellies - 27th July 16
Silver Is Insurance Against The Worst Part Of This Depression - 27th July 16
Don’t Buy The SPX Hope Stock Market Rally! - 27th July 16
Bitcoin $650 Still in Play - 26th July 16
Deutche Bank Stock Price Crash - The EU Has Problems Far Beyond the Brexit - 26th July 16
The Forex Markets Are Getting Exciting! - 26th July 16
Underpriced Silver Is the “Rip Van Winkle” Metal - 25th July 16
Declines in Multiple Market Indexes - 25th July 16
Retailers Are Doomed as Most Americans Are Too Poor to Shop - 25th July 16
Here’s One Currency That Could Go to Zero - 25th July 16
Stock Market Top is Expanding - 25th July 16
Silver Manipulation – Because They Needed the Eggs - 25th July 16
Silver Market COT Stuns: What's Going On Here? - 24th July 16
Gold Demand Remains Stable During Sector Weakness - 24th July 16
Sernova, Diabetes and Haemophilia - 24th July 16
Russia: Tensions, Turmoil, and Western Hubris - 24th July 16
Soybean Commodity Price to Soar Again - 23rd July 16
SPX Stock Market Uptrend Continues - 23rd July 16
Gold And Silver – Debt Addiction Will Carry Precious Metals Higher, Guaranteed - 23rd July 16
Pokemon Go - How to Play, First Use, Balls, Stops, Catching Pokemon's... Great Excercise! - 23rd July 16
7 Signs That the Gold Market Remains Resilient - 23rd July 16
Basic Income in The Time of Crisis - 23rd July 16
Silver Bull Faces Correction - 22nd July 16
The Serious Warning No One’s Talking About - 22nd July 16
Stock Market Insight from Greed, Volatility, and Put/Call Ratio - 22nd July 16
What Will Happen To the Stock Market When Interest Rates Rise? - 22nd July 16
How to Escape the World’s Biggest Ponzi Scheme - 22nd July 16
Addicted to Debt - We Can’t Borrow from the Future Anymore - 21st July 16
Not Everything Is Bullish for Gold - 21st July 16
Don’t Get Sucked Back Into the Stock Market - The Big Picture Hasn’t Changed - 21st July 16
Silver – Caught Inside - 21st July 16
Forex: "The Markets Are Getting Exciting!" - 20th July 16
China Economic Troubles - Is Kyle Bass Finally Getting His Revenge? - 20th July 16
Why Lithium Will See Another Price Spike This Fall - 20th July 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

The Power of the Wave Principle

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

© 2005-2016 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

Catching a Falling Financial Knife