Dividends Galore!
There's a link I keep up on my favorite bar, a list I visit very frequently. In fact, it's often one of the first places I go when I've got some extra cash on board, and I'm looking to invest. And when I looked at the link recently, something jumped out at me!
What is this link I'm talking about? Let me share it with you here.
If you haven't clicked already, the link takes you to a listing of the 'dividend aristocrats', sorted by their current dividend yields.
NOTE: Please ignore the error on the VFC yield (sorry, it's not yielding 26%). I checked a number of others on the list, and the rest seem to be accurate.
Dividend Aristocrats: What are they?
To be considered a dividend aristocrat, a company must not only pay a dividend for 25 consecutive years, but increase that dividend for each of the past 25 years. As you can gather from the criteria, these dividend aristocrats are mature, cash generating companies, the likes of AT&T, ExxonMobil, and McDonald's, to name a few. With the reputation of increasing their dividends year in and year out, the dividend aristocrats can be ideal investments for those looking to generate, and increase income indefinitely into the future.
If you're a dividend investor, I'm sure you already know everything I've told you above. So why the post? What is the significance of the link?
What Caught My Eye?
I've had this link bookmarked ever since I was turned onto the idea of dividend investing, somewhere around two to three years ago. By now, I have much of the companies memorized, and I check back in every once in a while to see if any companies have been added to the list, or if there's any yields I haven't noticed creeping up.
But when I visited the link a few days ago, something really popped out at me. Since I've been checking in on the aristocrats, I don't think I've ever seen this much of the list have such high yields.
As of today's date (ignoring the VFC error), AT&T (T) is yielding close to 7%, AbbVie (ABBV) has a yield over 5.5%, four stocks have a yield between 4% and 5%, and another thirteen have yields between 3% and 4%. These yields are even after today's rally, with the S&P 500 up 2.14% at the close of trading. Meanwhile, I get excited when I see a savings or CD rate between 2% and 3%.
As long as the company is showing no sign that they will stop increasing dividends going forward, these stocks are ideal if your goal is generating income. Your principal is not tied up, as in the case of a CD, and your income will continue to increase year after year. Obviously, there is the risk of stock price depreciation, as there is with any stock, but short term price decreases can be mitigated by reinvesting dividends. I often find myself rooting for short term market declines, if for no other reason than to reinvest my dividends at a lower share price.
While I'm not an expert, it looks to me like this could be a prime buying time for a lot of these stocks. Assuming their EPS going forward is sufficient to continue increasing the dividends going forward, these stocks are priced lower than they have been in recent memory, evidenced by their inflated yields. Of course, do your research - look at the payout ratio, read up on analyst and company EPS forecasts, see if there's any reason for a declining price outside of the current market trend.
Does this look like prime picking time for some great dividend growth stocks to you? Or do you have other companies in your shopping cart? Let me know what you think!
What is this link I'm talking about? Let me share it with you here.
If you haven't clicked already, the link takes you to a listing of the 'dividend aristocrats', sorted by their current dividend yields.
NOTE: Please ignore the error on the VFC yield (sorry, it's not yielding 26%). I checked a number of others on the list, and the rest seem to be accurate.
Dividend Aristocrats: What are they?
To be considered a dividend aristocrat, a company must not only pay a dividend for 25 consecutive years, but increase that dividend for each of the past 25 years. As you can gather from the criteria, these dividend aristocrats are mature, cash generating companies, the likes of AT&T, ExxonMobil, and McDonald's, to name a few. With the reputation of increasing their dividends year in and year out, the dividend aristocrats can be ideal investments for those looking to generate, and increase income indefinitely into the future.
If you're a dividend investor, I'm sure you already know everything I've told you above. So why the post? What is the significance of the link?
What Caught My Eye?
I've had this link bookmarked ever since I was turned onto the idea of dividend investing, somewhere around two to three years ago. By now, I have much of the companies memorized, and I check back in every once in a while to see if any companies have been added to the list, or if there's any yields I haven't noticed creeping up.
But when I visited the link a few days ago, something really popped out at me. Since I've been checking in on the aristocrats, I don't think I've ever seen this much of the list have such high yields.
As of today's date (ignoring the VFC error), AT&T (T) is yielding close to 7%, AbbVie (ABBV) has a yield over 5.5%, four stocks have a yield between 4% and 5%, and another thirteen have yields between 3% and 4%. These yields are even after today's rally, with the S&P 500 up 2.14% at the close of trading. Meanwhile, I get excited when I see a savings or CD rate between 2% and 3%.
As long as the company is showing no sign that they will stop increasing dividends going forward, these stocks are ideal if your goal is generating income. Your principal is not tied up, as in the case of a CD, and your income will continue to increase year after year. Obviously, there is the risk of stock price depreciation, as there is with any stock, but short term price decreases can be mitigated by reinvesting dividends. I often find myself rooting for short term market declines, if for no other reason than to reinvest my dividends at a lower share price.
While I'm not an expert, it looks to me like this could be a prime buying time for a lot of these stocks. Assuming their EPS going forward is sufficient to continue increasing the dividends going forward, these stocks are priced lower than they have been in recent memory, evidenced by their inflated yields. Of course, do your research - look at the payout ratio, read up on analyst and company EPS forecasts, see if there's any reason for a declining price outside of the current market trend.
Does this look like prime picking time for some great dividend growth stocks to you? Or do you have other companies in your shopping cart? Let me know what you think!
Some yields are definitely shooting up right now. I have a large position in T already. However, it may be worth adding if they continue to slide. As a percentage, it is definitely less than 10% of my portfolio. ABBV is interesting too. It's funny watching this market. It's hard finding a true discount.
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