These 7 Dividend Cash Cows Produce Money Like Milk (Part I)

Investing is great. You can spend money on stocks and if your bet goes wild you will make a lot of money. That's a great dream for all of us and I can tell you that it's possible to become an investment Pro.

I'm a guy who looks steadily at stocks and try to find attractive investment stories and cheap stocks in order to make a good return.

I'm not short term focused; plan to hold most of my stocks over years and decades. Due to my long investment horizon, I need good companies that grow over time their business, pay me good dividends, and grow dividends as well.

But the most important question is that the corporate can grow without taking new investors on board. Those actions will grow outstanding shares in general and bring pressure on earnings per share growth.

I look for companies have generated high free cash flows, companies with a business model that don't need much money to keep their operational business alive.

I've tried to find some new ideas with an old screener who has a quick option; it’s called the reinvestment rate. I don't know how they calculate this ratio but when I sort the list of large with high margins by this ratio, companies with low investment spending on their operational cash flow come first.

Big Money Roll In Your Pocket

I talk about companies with a high scalable business, stocks with the lowest need of capital expenditures. First you might think about Facebook or all the great tobacco companies. For sure those shares generate big free cash flows.

But there are much more companies, I talk about technology stocks and money platforms. The key is here the platform business. Each new customer doesn't cause new costs and bring free cash into the corporate. That's a great idea of making money.

The only item to care about is market entry barriers. Can competitors easily enter and push down margins? If yes, keep your fingers away of buy only at low multiples.

Below are seven detailed stocks. I will follow up with 8 additional stocks. That's only a selection; there are much more companies available. Some of them pay no dividends other a low one but dividend is not the key.

Look at Part II here: These 8 Dividend Stocks Bubbling Cash Like Lava Gold Mines (Part II)

Most of the presented results come from the tech and financial space.

7 Dividend Stocks with strong free cashflows are...

My Stock Buy Report | 3 Opportunities From The Technology And Financial Services Sector

Yesterday I made 3 stock buys for my private real portfolio. I bought shares of Oracle, CA Technologies and stocks from the financial services group CME. As you see, I try to increase my current share of technology stocks in my private portfolio. The yields are not high but the growth opportunities are still attractive in this investment category. 

Not enough, the EV/EBITDA ratio are between corridors of 5-8!

I am not a guru or something but I think that this sort of investments could double in five years or so if you believe that the business environment should be stable and grows solid.

I have no idea if it works, but for my recent EBAY deal it worked well and I oubled the investment amount in only three years.

Oracle shares have a yield of 0.76 percent and the company will not pay dividends for the next 3 quarters due to early paid dividends in terms of fiscal cliff protection.

CME is a bit different. The whole financial sector is under pressure. Financial institutions cut jobs, close divisions and reduce costs. All leads to slowing growth potential for the CME group and more pressure and competition because other providers try to grow by diversification and hunting of market shares. But I think the company offers a bit of value of a solid price.

I have shares of Deutsche Boerse, NYSE Euronext and Bolsas y Mercados Espanoles. All investments developed robust and they paid me goods dividends over the recent years. I think they could pay high dividends for the future if the business doesn’t break down in a hard way. The yield of CME is around 3.5 percent while the P/E is 11.52.

CA Technologies is a high-yielding technology and software stock. The company develops and delivers software and services. The Company operates in three segments: Mainframe Solutions, Enterprise Solutions and Services. The Company addresses components of the computing environment, including people, information, processes, systems, networks, applications and databases, across hardware and software platforms and programs. 

I bought this stock in order to increase my technology portfolio share. CA is one of the highest dividend paying stocks within the software sector and one of the 10 biggest companies of the industry. I believe that dividends could be doubled over the next decade. I will also put CA shares this Friday in my virtual Dividend Yield Passive Income Portfolio (DYPI). I let you know.

Do you have any stocks I recently bought? Let me know your thoughts below!