A Diversification Opportunity For Dividend Growth Investors

Dividend Growth Investing is a very conservative method of investing your portfolio into a group of stocks that have steady growth with increasing dividends over the long run. By investing in these steady stocks with increasing dividends, your annual income increases every year. It is a very successful strategy for many investors who are building a revenue stream to live on during their retirement. My portfolio is full of these steadily growing DG stocks and I highly recommend investors of any age to purchase dividend paying stocks.

The recent volatility in the stock market that occurred in August and September brought many new names within my yield requirements. Suddenly stocks like AFL, EMR, ETN, HON, ITW and UTX started looking relatively attractive. These stocks showed up in my screens because they are very volatile, meaning they fall and rise much faster than the market. The volatility, or falling stock prices, raised the yields on these stocks to very attractive levels when compared with their low payout ratios and high dividend growth rates. These stocks fell enough that they looked relatively cheap when compared with the dividend yields, payout ratios and dividend growth rates of the steady DG stocks in my portfolio.

Source: Seeking Alpha

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