Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Here’s Why You Should Look for Dividend Stocks — and How

Companies / Dividends Aug 19, 2016 - 04:20 PM GMT

By: John_Mauldin

Companies

BY TONY SAGAMI : I love dividends, and I’m not alone.

One of the biggest dividend lovers of all is Warren Buffett. He has more than 90% of the Berkshire Hathaway portfolio invested in dividend-paying stocks.

Sure, a 1%, 2%, or 3% dividend may not sound like a fortune, but what looks like small payouts really adds up.

For the first seven months of 2016, the S&P 500 was up 6.3%.With dividends, the total return increased to 7.7%. That’s an extra 22%!


Take a look at the chart below.

The positive impact of dividends can be seen not just in the US, but all over the world. And it’s even more impressive over time.

Since 1930, dividends have made up roughly 40% of the total return of the S&P 500 Index. Plus, dividend-paying stocks have compounded total returns of 9.2% vs. 2.3% a year for non-dividend-paying stocks.

Look for companies that increase dividends

The sweetest spot of the dividend-loving world is companies that can routinely increase their dividend.

Here’s what I mean: If you invested $10,000 in a company that pays a 3% dividend, you’ll receive $300 in dividends a year.

But, what if that company increases its dividend by 5% a year? After 10 years, you’ll have $3,773 in dividends and enjoy a yield of 4.65%.

Companies that regularly increase dividends

These 10 S&P 500 stocks have raised their dividends the most over the last three years: SunTrust Banks (STI), Citigroup (C), Bank of America (BAC), Zions Bancorp (ZION), Regions Financial Corp. (RF), MasterCard (MA), Danaher (DHR), Southwest Airlines (LUV), Capital One (COF), and Vulcan Materials (VMC).

Of course, dividends are not a sure thing. They can be reduced or removed at any time a board of directors sees fit. But this select group of companies has increased dividend payments for 25+ consecutive years in a row.

3M (MMM)
Abbott Laboratories (ABT)
AbbVie (ABBV)
Aflac (AFL)
Air Products and Chemicals (APD)
Archer-Daniels-Midland (ADM)
AT&T (T)
Automatic Data Processing (ADP)
Becton, Dickinson & Company (BDX)
Brown-Forman (BFB)
Cardinal Health (CAH)
Chevron (CVX)
Chubb (CB)
Cincinnati Financial (CINF)
Cintas (CTAS)
Clorox (CLX)
Coca-Cola (KO)
Colgate-Palmolive (CL)
Consolidated Edison (ED)
CR Bard (BCR)
Dover (DOV)
Ecolab (ECL)
Emerson Electric (EMR)
Exxon Mobil (XOM)
Franklin Resources (BEN)
Genuine Parts Company (GPC)
HCP, Inc. (HCP)
Hormel Foods (HRL)
Illinois Tool Works (ITW)
Johnson & Johnson (JNJ)
Kimberly-Clark (KMB)
Leggett & Platt (LEG)
Lowe’s (LOW)
McCormick & Company (MKC)
McDonald’s (MCD)
Medtronic (MDT)
Nucor (NUE)
Pentair (PNR)
PepsiCo (PEP)
PPG Industries (PPG)
Procter & Gamble (PG)
Sherwin-Williams (SHW)
Sigma Aldrich (SIAL)
S&P Global (SPGI) (formerly McGraw Hill Financial)
Stanley Black & Decker (SWK)
Sysco Foods (SYY)
T. Rowe Price Group (TROW)
Target (TGT)
V.F. Corporation (VFC)
W.W. Grainger (GWW)
Walgreens Boots Alliance (WBA)
Wal-Mart Stores (WMT)

The media calls these companies “Dividend Aristocrats,” and they are a great starting point for all dividend hunters.

3 ETFs that focus on dividends

If you’re more of an ETF investor, there’s a trio of ETFs that are tailored toward dividends.

SPDR S&P Dividend ETF (SDY) is one of the most popular dividend-focused ETFs. It is made up of companies that have been consistently increasing their dividends every year for at least 25 years, such as the Dividend Aristocrats.

Vanguard Dividend Appreciation ETF (VIG) invests in the NASDAQ US Dividend Achievers Select Index (companies that have increased dividends over the past 10 years). 

SPDR S&P Global Dividend ETF (WDIV) takes a global approach to dividends, with companies that have raised dividends for at least 10 consecutive years.

Dividends may seem boring if you’re looking for casino-like thrills. But, the path to long-term wealth is slow and steady.

Subscribe to Tony’s Actionable Investment Advice

Markets rise or fall each day, but when reporting the reasons, the financial media rarely provides investors with a complete picture. Tony Sagami shows you the real story behind the week’s market news in his free weekly newsletter, Connecting the Dots.

John Mauldin Archive

© 2005-2022 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