Buy and hold stocks are definitely underrated. Some investors spend copious amounts of time tracking their investments and hoping their value increase.
Then there are dividend investors. Sure, they like watching the value of their stocks rise, but they also like getting free money every three months—money they can either cash or reinvest.
Dividend investing might not be as exciting as trying to find the latest tech stock that is about to soar, but that’s because dividend investing is a long-term sport for patient investors. Dividends are typically paid out by larger, well-established companies and have become increasingly popular in the current near-record-low interest rate environment.
After all, it’s easier to have your money work for you when you invest in a company that provides an annual dividend of four percent and has a long history of increasing its annual dividend than, say, putting your money in the bank or bonds, where the yields are virtually zero.
Dividends are typically by companies that make a lot of money, but don’t need all of the cash to fund growth. Instead of reinvesting all of their money into the company, they pay some of it out to shareholders.
If you’re looking at adding dividend growth stocks to your portfolio, pay particular attention to the price/book (P/B), price/earnings (P/E), return on equity (ROE), payout ratio, and levered free cash flow.
Also, look for stocks with a high barrier to entry. This prevents other companies from entering the fray and taking a bite out of profit margins, which keeps the company making money and the dividend yield safe.
Here are my top 10 stocks to buy and hold for the next decade...
Dividend growth stocks deserve a place in your portfolio, no matter how modest the allocation, simply because they often return 100% to 200% or better relatively quickly as their payouts rise.
You’ve probably noticed you rarely see your favorite stock paying more than 2% or 3%, even if the company raises its dividend every year.
That’s because its price gets bid up as its payout rises – so you never quite get the bargain 4% yield you’re always waiting for, unless something really bad happens (like 2008).
Here are four stocks from my watch list trading at less than 10-times free cash flow. All are growing their payouts quickly AND reducing their share counts meaningfully – a bullish sign of things to come:
We have seen that simple value strategies tend to outperform. This has been the case with each one we have looked at so far, including the P/E ratio and its alternatives.
Today's article will change that trend. Normally there would not be much point in writing an article about what doesn't work.
But this particular ratio is one of the most frequently reported and used, so I think it's worth discussing.
The price to book (P/B) ratio is defined as:
P/B = Market Cap / Book Value
The low P/B strategy buys companies that are trading at the largest discounts to their net asset values.
Today I will share the 20 cheapest Dividend Aristocrats by P/B ratio with you.
Here are the results...
Only the incredibly wealthy can afford to leave dividend stocks out of a retirement portfolio. The rest of us would run the risk of outliving our money.
It's really hard to find bargains with low risk and high dividend payments. The most of the high yielders offering enormous risks.
That's exactly why I keep my investment focus on dividend growth stocks with a higher capitalization. Those are real assets that could survive the next crises easily.
We’ve done the research and found 11 great stocks that could increase your income safely! Not to mention, they’re still underpriced.
Each of the attached results is a member of the Dividend Aristocrats Index. That's one of the most trusted investment categories you can find on the market.
These are the results...
While it is easy to get caught up in dividend stocks with a high yield, investors tend to earn higher returns by investing in companies that pay a growing dividend.
While several energy stocks have managed to grow their dividends in good times, only the best handful have succeeded in raising their payout throughout more than one energy cycle.
For sure engery dividend stocks are cyclic but some of them have strong assets and cash flows, generated by these assets.
Here are 15 dividend achievers that have delivered consistent dividend growth for more than a decade:
