5 Basic Dividend Investments To Start Building The Ground Of Your Growth Portfolio

Are you just starting to build an all-important dividend portfolio and need some help separating the wheat from the chaff?

For beginner, it’s important to avoid big losses. A focus on high-quality dividend growth stocks is essential for building the ground of your portfolio.

Well, we think the following five dividend plays would form a solid basis for any income-generating portfolio.

Here is what I'm talking about...

Dividend Kings: An Update Stocks With The Longest Dividend Growth History

A dividend king is a company that has managed to increase dividends to shareholders for at least fifty years in a row.

There are only a handful of these companies worldwide, most of them being US based. 

A company that has managed to increase dividends each year for over half a century has a stable business model that has endured a lot over a long period of time.

As investors who want to live off dividends in retirement, we want to concentrate on quality businesses that operate in industries with significant competitive advantages.

This will allow those businesses to grow earnings and pay higher dividends over time. Raising dividends for over half a century is no small accomplishment and it is testament to the stability of the business model.

There are currently 18 Dividend Kings. Each Dividend King satisfies the primary requirement to be a Dividend Aristocrat (25 years of consecutive dividend increases) twice over.

The table of contents below lists out all 18 Dividend Kings so you can jump to analysis of each specific company:

50 Technology Dividend Dogs As Of June 2016

50 Technology Dividend Dogs As Of June 2016,
Source: Ycharts, Seeking Alpha

17 Dividend Aristocrats With Double-Digit EPS Growth Predictions Over 5 Years

Last month we looked at the Canadian dividend aristocrats, a list of companies that have increased dividends each year for the past five years.

The list of stocks is a good starting point for dividend investors, but it also reveals a number of flaws when looking to invest in a company.

Some companies grow their dividend by a small amount in order to remain on the list, while others ignore poor earnings and continue to distribute more in dividends then they earn.

Dividend growth stocks make an excellent choice for investors seeking both income and growth. Dividend growth stocks raise their dividend year after year, growing their owner’s income streams.

Who doesn’t want a rising standard of living year after year? Not only do dividend growth stocks have practical appeal, they have also historically outperformed non-dividend paying stocks by about 7.8 percentage points per year from 1972 through 2013. Not a bad excess return, for simply buying stocks that raise their dividends year after year.

That’s why it’s important to include additional criteria in your search for the best dividend stocks. One thing to look for is the 5-year average dividend growth rate, which shows how consistently a company raises its dividend over time.

Today I ran a stock screen that looked for companies that should increase earnings per share by 10 percent or more for the next five years. The results showed seventeen companies that should produce five years of double digit eps growth and possible double digit dividend growth. Here’s what we found:

17 Dividend Aristocrats With Double-Digit EPS Growth
Predictions Over 5 Years
(click to enlarge)

20 Highest Yielding Stocks From The S&P MidCap 400 Dividend Aristocrats Index

Most investors know the fantastic lists of long term dividend growers, named as Dividend Aristocrats, Champions, Contenders, Challengers or even Achievers. 

On the lists are many large caps but smaller capitalized stocks don't jump into your mind if you think at these lists. Today I like to show you some of the highest yielding MidCap Dividend Aristocrats. 

Smaller stocks have the advantage to grow faster than large cap holdings. They have a normally a more tighten management structure and could act more dynamic. 

 Here are the 20 highest yielding stocks from the S&P MidCap 400 Dividend Aristocrats sorted by dividend yield from highest to lowest. Each stock has increased its annual dividend 15 or more consecutive years.

20 Highest Yielding Stocks From
The S&P MidCap 400 Dividend Aristocrats Index
(click to enlarge)