Recently, I was asked on another blog what are the top 5 income stocks that I like? It was an fascinating question that I quickly answered. I thought it would be interesting to expand on my answer here. It is important to note these picks will change over time (maybe even by the time the market opens on Monday) and are based on how I define "like". These are the ones I listed:
1. ACAS - High and growing dividend yield. How can you not like a company that has a double-digit current yield and has raised it's dividend on average 7.7% over the last 5-years? ACAS is planning, and publicly stated, its intentions to increase its dividend 4 times in 2008.
2. AFL - Low yield, strong dividend growth. A traditional dividend play. ALF's dividend increase has averaged 22.3% over the last 10-years; 28.7% over the last 5-years. Plus my kids love the duck commercials.
3. GE - Moderate growing yield. I was once asked if I were limited to buying only one stock for the rest of my life, what would it be? GE was my answer. Over the decades I think GE has been one of the best, if not the best, managed companies. They just execute and win. They are quick to cut their losses and move one when something does not work. With a current yield of 3+%, it is a great place to park cash.
4. RY - Moderate growing yield. I am still getting to know this Canadian bank - the more I learn, the more I like it. It has been unfairly punished for the U.S. banking debacle. With a current yield of 4+% and a 10-year average dividend growth rate of 19.7% (on the U.S. ADR), I am buying all that my allocation will allow.
5. JNJ - Low yield, strong div growth. Another traditional dividend play. JNJ's 10-year dividend growth rate is 14.6%; 15.8% for the last 5 years. This is a stock I have tried to buy for a long time and 2007's market decline finally provided me the opportunity. I will continue to buy as long as my window of opportunity is open.
Disclaimer: Material presented here is for informational purposes only and is based solely on my opinion. Before buying or selling any stock you should do your own research and reach your own conclusion. See my Disclaimer for more information.
Full Disclosure: At the time of this writing, I own shares of all the above-mentioned stocks.
What are your 5 favorite stocks?
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D4L:
I agree with all your choices. I think other Cdn banks will also do well (ie. BNS) and Cdn Life insurance companies (i.e. MFC)
On another note, can you control the advertising on your site, "Asian girls for love" doesn't seem to fit with the integrity with which you write?
thanks for a great blog,
RickT
Anon: Thanks for your comment and the heads up on the "Asian girls for love" advertising. I had not seen that one. If you see it again, please get me the URL and let me know where it is at (google ad, sidebar, footer header,etc.) and I can put it in the block filter.
Best Wishes,
D4L
Evidently, we are not all seeing the same ads. I went into Google AdSense and searched on "Asian girls" and found what may be the ad you referred to. I put the URL into the block filter. If it, or any other offensive ad, comes up please send me the URL, location of the ad, Ad Network and any other information you can about the ad.
Thanks,
D4L
I'll bite:
Manulife Financial
General Electric
Johnson & Johnson
Procter and Gamble
Toronto Dominion Bank
MG: I have heard and read a lot of good things about Manulife Financial. At some point I need to take a look at it.
Thanks for sharing your 5 favorites!
Best Wishes,
D4L
Four financials and one healthcare company? Not very diversified. I think we have seen over the past few months that it is not a great idea to be 80% in financials (BTW, yes, I consider GE a financial).
How about swapping one of those for ArcelorMittal MT which grew its dividend over 15% this year and continues to buy back large amounts of shares.
"The policy of ArcelorMittal aims to return 30% of ArcelorMittal’s prior year’s annual net income to shareholders every year through an annual base dividend, supplemented by share buy-backs."
http://www.arcelormittal.com/index.php?lang=en&page=442
Other nonfinancials I own with solid growing dividends include:
-SSL (South African energy and chemicals)
-VFC (retailer)
Royal is a great bank to own. I have a few shares myself.
As MG mentioned Manulife is great too. They have been growing their dividend over the last 5 yrs by more than 20%.
cavemanus: Applying asset allocation and value strategies, would lead one to purchase stocks when they are beaten down. that is the current situation for financials. The 80% would only apply if these 5 stocks were my entire portfolio, as it is, all five stocks combined represent only 2.4% of my entire portfolio.
dividenddollar: I have been well-pleased with RY and have got a lot of good feedback on Manulife. thanks for commenting!
Best Wishes,
D4L
My five favourite dividend stock:
ACAS
O
JNJ
SSW
LYG
D4L If you are interested in Canadian Fiancials check out Sun Life (SLF) On the NYSE.Its average dividend growth over the last 5 years has been 17.6%.
dividends4life:
i very much enjoy your blog.
i too own ACAS, however i think they have stopped paying a dividend for now . please confirm this if you can in your next blog.
looking forward to reading it on 11/19/08.thanks
Anon: Yes, ACAS halted their dividend. As is my policy, I immediately sold the stock.
Thanks for your kind words.
Best Wishes,
D4L
didnt go to well for ya
mineare duk,xom,pg,jnjand mutualfunf ifabx