All references to Champions mean companies that have paid higher dividends for at least 25 straight years; Contenders have streaks of 10-24 years; Challengers have streaks of 5-9 years. Already in 2011, 18 companies have made their way unto the Challengers list, including such diverse names as Dun & Bradstreet (DNB), Teekay Offshore Partners (TOO), and Union Pacific (UNP).

The up-and-comers include a wide variety of companies, ranging from restaurants and retailers to utilities and Master Limited Partnerships (MLPs) and offering yields ranging from 0.5% to 8.6%. Although they don't have long streaks of dividend increases, it's clear that management at these companies is expressing confidence that their firms will be able to sustain strong enough earnings growth to support rising dividend payouts to shareholders.

Source: Seeking Alpha

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Summary only...

Sam Stovall is the chief investment strategist for Standard & Poor's. Stovall found that a stock portfolio that shifted to defensive sectors such as consumer staples / health care stocks from May through October had outperformed the S&P 500 Index by several percentage points a year over the past 15 years.

Defensive stocks are typically the best performers during the often-weak summer months. They outperformed the market 65% of the time during the past 20 years, with the best average advance of any group says a study released in 2010 by Sam Stovall, Standard & Poor's.

Source: Zacks

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Summary only...

Dividend investing is all the rage. And what's not to love? Getting those four (typically) payments each year feels great for investors. It gives you a tangible affirmation that you're actually getting something out of owning those little pieces of paper sitting in your brokerage or retirement accounts. And beyond the positive affirmation those payments provide, research indicates that companies that pay dividends outperform the market. All in all, dividend investing seems likes an ironclad road to riches.

A high yielder can become deadly when its payout is so high, the company can't afford it anymore. When a company's payout ratio begins to rise about 75%, it's worth taking note. Such a high payout ratio means that the company in question pays more than three-quarters of its income out to owners. While this might sounds like an investor's dream (and not always a negative), such practices can also give companies very little breathing room in running their businesses, especially since evidence indicates firms will often go to destructive lengths to avoid cutting their dividends.

Source: Motley Fool

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Who doesn’t love a dividend? As Robert Powell points out in his Your Portfolio column today, it’s really not enough to just pick any old dividend-paying stock and forget about it. Investors who do that may be missing out on some great advantages and may be paying too much for growth opportunities. Other factors to consider are a track record of strong dividend growth and companies that make good use free cash flow. Powell reviews strategies and lists ETFs, funds and companies you’ll want to look at.

Everybody loves a healthy dividend-paying stock, but investors need to assess companies carefully to make sure the payout is likely to continue. That includes looking at the company’s free-cash-flow yield.

Source: Market Watch

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Barry Ritholtz, chief executive at quantitative research firm Fusion IQ, in a Forbes interview says the firm is long the market and its holdings include exchange traded funds tracking the total stock market and dividend stocks. “We’re now about 86% long and have been for some time,” said Ritholtz, who also writes The Big Picture, a popular blog.

“We’ve played around with a handful of other names,” Ritholtz said, mentioning SPDR S&P Dividend ETF (NYSEArca: SDY), a basket of dividend stocks. Some of the more conservative portfolios wanted to have access to dividends,” he said. “In a conservative way, that’s been a nice holding for us. It’s worked out well.”

Source: ETF Trends

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Summary only...

You’d be hard-pressed to miss the near daily proclamations from gurus and others urging investors to focus on dividend-paying stocks. But not just any dividend-paying stocks. It has to be dividend-paying companies with some sort of unique twist — those that have increased their dividends for 25 straight years, or those that have a high current yield and a long track record of strong dividend growth, or those that make good use of free cash flow, be it on dividends or not.

This week, Sam Stovall, chief investment strategist at Standard & Poor’s Equity Research Services, said investors should pay closer attention to “defensive sectors during the traditionally weak May through October period” and that those who like “owning companies that have consistently increased their cash payouts” should consider the SPDR S&P Dividend ETF (SDY). That ETF, he noted in his weekly commentary, seeks to mimic the composition and performance of the S&P High Yield Aristocrats, which since year-end 1999 has posted a cumulative total return of 164%, besting the S&P 500’s 12% advance.

Source: Market Watch

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"Those who cannot remember the past are condemned to repeat it." That George Santayana quote was always a little pessimistic for me. As investors, it certainly behooves us to study the past, figuring out what didn't work and how we can avoid it. But I think we're also well-served by looking at what did work, and figuring out how we can repeat that. I don't need reminders about why dividends are important -- I already know they're a very important component of investment returns. But I don't mind an extra reminder. But there's been trouble in paradise for dividend investors -- particularly those who like the ease of index funds.

Dividends from the S&P 500 have been like a contestant on The Biggest Loser -- they're getting mighty slim. And with dividends playing such a big part in historical returns, this is very bad news for investors. Happily, we don't have to simply take the S&P's yield and whimper, "Thank you, sir! May I have another?" Instead, we can venture beyond the safety of the index to build a portfolio of stocks with yields worth having.

Source: Motley Fool

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Summary only...

The essence of dividend investing is the fact that dividend stocks are a "total return" product. When an investor buys a dividend paying stock, not only will he have the opportunity to benefit from the stock price performance, but he will also benefit from the yield provided by the dividend issued by the company.

Historically more than half of the total returns investors received by investing in the S&P 500 have come from dividends. Since the 1930s, dividends have comprised 51.5% of the total returns received by investors in the best-known index. Dividends accounted for more than half of investors' total returns during five of the last eight (62.5%) decades, and since the index was actually down during the 1930s and 2000s, dividends were the only source of return during those years.

Source: PR Newswire

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As I promised last time, I am showing our Dividend Valuation Model for Becton Dickinson (BDX). BDX is the second highest ranked stock in our universe behind United Technologies (UTX) in a combination of predictability, valuation, and momentum. BDX is a global medical technology company engaged in the manufacture and sale of a wide range of medical devices and instruments used by many sectors of the health-care industry.

BDX has one of the best long-term earnings and dividend growth records of any company we follow. Dividends have grown by nearly 13% per annum over the last 20 years. Earnings have grown by nearly 12% per year. Over the last three years dividends and earnings have grown at 13.7% and 11.4%, respectively. Wall Street is estimating that 3-5 year earnings will grow at nearly 10%. The model is suggesting that based on next years estimates the stock is undervalued by nearly 14%.

Source: Rising Dividend Investing

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Summary only...

The consensus on Sysco seems to be that its dividend is not in great danger, but that it bears watching because of the effects of rising food costs. Sysco’s F3Q report on May 9 put some minds at ease, as the company beat consensus estimates, and its price surged over 10% on the day of the announcement. The company achieved its results with higher prices and volume, but it also reported that costs had risen amid higher food and fuel expenses.

Sysco derives most of its sales from the restaurant industry, and higher costs are squeezing many food-related companies.
Sysco is on a 41-year streak of increasing its dividend, with its last increase in January of 4%, so it is nowhere near being overdue for an increase. Its next dividend payment would normally be made in July, and if it follows its practice of recent years, that dividend declaration will be made shortly.

Source: Seeking Alpha

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Summary only...

Given paltry yields on savings and high-quality bonds, it's easy to see why dividend stocks are getting more attention these days. Though dividend-paying stocks have a much different risk profile than CDs or Treasuries, a well-diversified portfolio of quality dividend stocks can help boost your current income and provide income growth potential through dividend increases.

According to Capital IQ, energy stocks have been the best performing group in the S&P 500 over the past year, posting 27.9% returns as a group. Much of these gains can surely be attributed to the rise in oil and gas prices over the same period. Last May, crude oil traded for approximately $75 per barrel, and, despite recent volatility, it is changing hands at $100 per barrel today. Still, the industry has a lot going for it, including increasing demand for energy across the global economy. Large oil and gas companies also have a vast amount of infrastructure, specialized knowledge, and scale that provide them with competitive advantages and significant barriers to entry.

Source: Motley Fool

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Summary only...

The search for yield is driving investors toward stocks that pay dividends—and some of the most generous yields are in Asia, where stock prices are among the world's cheapest. While most international dividend mutual funds are heavily allocated to North America and Europe, few have major exposure to Asia.

Dividend growth on the MSCI Asia Pacific Index increased at a compound annual rate of 7.23 percent, vs. 4.85 percent for the S&P 500 and 4.83 percent for the MSCI EAFE Index, which includes companies across Europe, Africa, and the Middle East, according to Bloomberg data. "That goes counter to people's basic understanding of what investing is about," Madsen says. "They've been taught if you want growth, you have to sacrifice yield. But we've seen companies [in Asia] deliver both."

Source: Business Week

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Summary only...

Dividends play two important roles in our stock selection process. 1) They produce a cash return that has represented nearly 40% of the total return of the S&P 500 Index over the last 80 years. 2) For select companies, dividend growth and changes in interest rates provide an excellent valuation tool.

Each week we run all the stocks in the Russell 1000 through our Dividend Valuation model. A look at the model as of Friday reveals that the stock we own with the best overall score is United Technology (UTX). As shown above, the model (blue line) for UTX has been very tightly associated with UTX's actual price (red line) over the last 20 years. The R-squared is .94. The models suggests that UTX is undervalued by about 12%, including dividend. UTX's sponsorship or momentum score is 67, which means that it has outperformed 67% of all stocks over four time frames, from 12 months to one month.

Source: Rising Dividend Investing

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Summary only...

I hate soda. There, I said it. It makes me burp, and because I'm a girl, it's more embarrassing than funny. You'd think that since I'm not a fan of soda, I wouldn't be interested in investing in a soda company, but that's where you'd be wrong. With strong brands, high returns on equity, and attractive dividends, soda companies can make great investments. Let me tell you about three dividend-paying stocks you can't afford to miss.

While there's no sure-fire way to know what will happen in a company's future, Coke, Dr. Pepper, and Pepsi are primed to offer long-term growth with dividend payouts, making them great additions to any Fool's portfolio. What do you think?

Source: Motley Fool

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Summary only...

Investors' stock portfolios were hit hard during the economic downturn, but if they had looked to a little-used income source, they may have avoided the pain of watching their investment income shrink. Dividend investing can give investors steady results, said Harry Cohen, managing director, senior portfolio manager and chief investment officer at ClearBridge Advisors.

"Companies that have the ability to pay a rising stream of dividends, that's what I really like. It gives people a raise every year," Cohen said, adding that yields are typically better than 10-year Treasury notes -- often in the 3.5 to 4 percent range. "You want companies that have strong cash flows." As companies receive pressure from their shareholders to increase their dividends, the opportunity for dividend investing improves, he said.

Source: ctpost.com

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Summary only...

Your dividends depend on two things: a company's yield and its ability to grow those coveted payouts. Ideally, you'll find the best of both worlds: a stock with a high yield, and payouts that company can sustain and grow. Such stocks will pay out the most cash to shareholders for long periods of time. When you identify dividend stocks with both factors, the returns can be tremendous. Consider the "top five dividend stocks" over the last five years -- i.e., the five stocks that yielded the most to lucky shareholders who bought five years ago:

So which names will yield investors the most dividends over the next five years? No one can answer that question with certainty. However, we can calculate an implied five-year payout if we use estimated earnings growth as a proxy for dividend growth. To eliminate names with unsustainable payouts, I also filtered out stocks whose payouts exceeded net income. All of the top 10 companies were trusts or partnerships -- the highest ranked was American Capital Agency (AGNC) -- which are generally required to distribute the vast majority of their earnings to shareholders. To make up for the lack of retained capital, they frequently issue new shares. I'm generally bullish on mortgage REITs and have even bought shares of Annaly Capital (NLY) (which is ranked number five on the list) for the real-money Dada portfolio I co-manage. But I excluded REITs for the purposes of this study because their frequent capital raises would have made the comparison unfair.

Source: Motley Fool

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Summary only...

First-quarter earnings season is well underway in North America, and results have been largely positive. High-quality, high-yield Canadian stocks are again reporting numbers that strongly recommend their ability to cushion stock market corrections and help you build wealth over the long term. Although the market has sold off in recent days, responding to short-term economic, currency and oil inventory data and a corresponding flight from the commodity complex, the long-term factors driving Canada’s rise to global economic prominence remain in place. Job growth north of the border is robust, rankings from Bloomberg Markets confirm the strength of the financial system and demand for oil from emerging markets continues to grow.

One group we follow with great interest but that isn’t represented in the CE Portfolio is Canada’s Big Six banks. National Bank of Canada (TSX: NA, OTC: NTIOF), the smallest of and most recent addition to the Big Six, is third-strongest bank in the world. Canadian Imperial Bank of Commerce (TSX: CM, NYSE: CM) is No. 4. Toronto-Dominion Bank (TSX: TD, NYSE: TD, No. 12), Royal Bank of Canada (TSX: RY, NYSE: RY, No. 17) and Bank of Montreal (TSX: BMO, NYSE: BMO, No. 19) also made the top 20.

Source: Investing Daily

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Summary only...

In compiling the Dividend Champions list I get to see which companies are nearing the anniversaries of their previous dividend increases. Most of these firms raise their payout about the same time every year, but some companies go longer before boosting their dividends, and this can raise concerns about their streaks of increases.

So which dividends might be in danger? Some companies, such as REITs (Real Estate Investment Trusts) and MLPs (Master Limited Partnerships), have a tendency to pay out much more than earnings per share, simply because of their legal structure, so we can't tell much from seemingly high payout ratios or P/Es in such cases. Some alarming Payout Ratios and/or P/Es, like those at Harsco (HSC) and Meridian Bioscience (VIVO) may suggest great risk, but a look ahead at the estimated earnings per share for this year and next might provide a bit of comfort. After the cut at Hudson City, other overdue banking Contenders might raise questions, despite seemingly good Payout and P/E ratios.

Source: Seeking Alpha

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Summary only...

In the aftermath of the global financial crisis, companies around the world have accumulated trillions of dollars in cash on their balance sheets. As far as investors are concerned, now is the time for companies to start using that cash to create shareholder value, according to a recent survey by The Boston Consulting Group. Its annual investor survey suggests investors want ompanies to start putting their trillions in cash into organic growth -- or return that cash to shareholders, preferably in the form of dividends.

"Dividends' growing importance to investors represents a major shift from attitudes in the past few decades, when capital appreciation accounted for the lion's share of TSR," added coauthor Frank Plaschke, a partner in BCG's Munich office. During the past 25 years, dividend yield at S&P 500 companies accounted for only 2.5 percent of an average annual return of 9.9 percent. "But a higher reliance on dividends happens to be a reversion to a longer-term historical trend," Plaschke continued. An analysis of the composition of TSR of the companies making up the S&P 500 from 1900 through 2010 shows that dividend yield accounted for nearly half of total TSR -- 4.6 percent of an average annual return of 9.5 percent."

Source: The Boston Consulting Group

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Summary only...

I have a confession to make. I am an “extreme couponer”. Laugh if you will, but in the last month I obtained all my family’s toothpaste, deodorant and paper products for FREE. Why pay more for something when it can be obtained for nearly nothing? I carry this same sense of bargaining when looking for dividend-paying common stocks to invest in. I never buy retail in my real life – why should I start in my investing life?

The key to buying well is – buy the right stock at the right price. Getting the right price for your stock means assessing the market, looking out for undervalued market segments, and creating a watch list of individual stocks with fundamental and technical characteristics that look to be on the rebound. Once a new investor learns some basic assessment and trading techniques, they can better “sleep at night” with common stocks that they hold for dual purposes of income and capital appreciation.

Source: Seeking Alpha

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Summary only...

Many investors buy utilities stocks as a value investment because of their high dividends and generally low volatility relative to the market. Here we present an interesting list of high-dividend utilities that are currently undervalued based on the Graham equation. Benjamin Graham, the man who developed the equation for the Graham number, was a former mentor of Warren Buffett and is the so-called “Godfather” of value investing.

List sorted by potential upside implied by the graham equation.

1. Portland General Electric Company (POR)
2. Entergy Corporation (ETR)
3. Central Vermont Public Service Corp. (CV)
4. American Electric Power Co., Inc. (AEP)
5. Pinnacle West Capital Corporation (PNW)
6. Integrys Energy Group, Inc. (TEG)
7. SCANA Corp. (SCG)
8. Consolidated Edison Inc. (ED)

Source: Seeking Alpha

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Summary only...

The S&P index of large American companies recently traded at 14 times forecast 2011 earnings. That suggests that, even though the index has quickly doubled since hitting its recessionary low point in March 2009, shares seem priced in line with historic averages. There's one hitch, however. After-tax corporate profits are astonishingly high right now relative to the size of the economy. That's not to say a plunge is imminent, but history suggests corporate profits will revert to or below average levels.

What would happen if profits reverted to their historic share of the economy now? For one thing, the price-to-earnings ratio for the S&P 500 would inflate to a worrisome 20. Shop carefully, stock investors. Below are listed three companies that are one-third cheaper than the index based on earnings and that pay decent dividends. 1.) Pfizer (PFE: 20.98, 0.06, 0.29%) shares have gained 20% since the company announced in January 2009 that it would buy rival Wyeth for $68 billion. 2.) Tyson Foods (TSN: 18.51, -0.02, -0.11%) on Monday reported earnings that slightly missed Wall Street estimates, snapping a two-year string of upside surprises and 3.) Whirlpool (WHR: 85.10, -1.56, -1.80%) has quietly quadrupled in price since March 2009.

Source: SmartMoney

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Summary only...

Ultimately, you'll face at least one of two huge retirement risks: 1.) Running out of money or 2.) Running out of life. One will get you before the other does, but neither one of them is necessarily pleasant to face unprepared. If you run out of life before you run out of money, somebody else will enjoy the rewards from your thrift. If you run out of money first, then you wind up destitute at a stage in your life when you're less likely to be able to go back to work.

The classic strategy is the 4% rule. In essence, you withdraw 4% of a well-diversified portfolio in your first year of retirement. If your portfolio can throw off more than 4% in cash, you can take it as income without selling off the stocks that generate it. If those stocks raise their dividends faster than inflation, your purchasing power can keep pace, too.

Source: Motley Fool

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Summary only...

With concerns about the U.S. economy starting to resurface, many investors have begun to re-examine their portfolio asset allocations to determine if they are taking on too much risk. Some investors have begun to shift their portfolio toward securities that will protect them from a variety of possible scenarios, such as higher than expected inflation, a double-dip in housing or further deterioration in employment numbers. One way many are de-risking their exposure to the U.S. has been through international diversification.

Generally, when people invest in emerging markets such as the BRICS, Asia or South America, the first thing they look for is capital appreciation. It was not common a few years ago for investors to look globally to less-developed countries for dividends and income. However, as the U.S. economy has stagnated recently, many overseas economies have surged ahead, and having exposure to these countries would have added diversification benefits to your portfolio.

Source: Investopedia

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Summary only...

Investors have a lot of good reasons for liking stocks that pay dividends. But dividend-paying stocks have one advantage that many people don't always realize. Paying a dividend ensures that the cash a business generates goes toward a legitimate purpose: paying back shareholders for their investment in the company.

Becoming a solid dividend stock doesn't happen automatically. Companies have to commit to adopting the mindset of paying a consistent and growing dividend before they ever see it come to fruition. But with all sorts of corporate excess running rampant, investors now recognize that the way of thinking about corporate capital that comes from paying a dividend also helps reinforce the responsibility that management teams have in safeguarding shareholder assets.

Source: Motley Fool

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Summary only...

When I speak of valuation, I am referring to the mathematical calculation of the returns, which include both capital appreciation and dividend income, which you could prudently expect to earn from the company's cash flows (earnings). Those returns should be large enough to compensate you more than you could earn from a theoretically riskless investment like a Treasury bond. If you are not being compensated for the extra risk you're taking by investing in stocks, then we believe you are paying more than you should be.

Another very interesting investing principle that can be gleaned from this analysis is how VF Corporation, with the lowest historical earnings growth rate, but best (lowest) starting valuation produced the most dividend income and the highest total return. But most importantly, notice how Procter & Gamble with the worst, or highest starting valuation produced the lowest level of total dividends and the lowest total rate of return. Even though Procter & Gamble's earnings growth rate was slightly higher than VF Corporation, due to excessive overvaluation their total dividend income was less than half that of VF Corporation's and their total return only a fourth of what VF Corporation rewarded their shareholders with.

Source: Seeking Alpha

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Summary only...

In compiling the Dividend Champions list I get to see which companies are nearing the anniversaries of their previous dividend increases. Since most of these firms raise their payout about the same time every year, I can say with some confidence that they are likely to do so again.

This is the third article in the new twice-monthly format, which extended the forward look to a period of about eight weeks. The previous article appeared on April 26th. Of the companies mentioned in that article, 19 have announced dividend increases, including such familiar names as ExxonMobil (XOM), Johnson & Johnson (JNJ), PepsiCo (PEP), and International Business Machines (IBM). The new format leads to some carry-over in the listings, but is designed to help avoid having companies failing to be mentioned simply because they fall in between monthly articles. But there were still a few companies that announced increases as much as two months before the next Ex-Dividend Date, so I'm extending the “forward look” to 60 days and, if necessary, could aim for nine or even ten weeks. :

Source: Seeking Alpha

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Sometimes growth stocks and income-producing stocks are arrayed against each other as some sort of "bubblegum vs. potato chips" argument. In reality, though, investors can usually find a pretty healthy menu of choices among companies that not only return a meaningful dividend to shareholders, but also have growth prospects strong enough to drive future capital appreciation. Although an investor should always hold a diversified portfolio to minimize company-specific risks, a selection of these stocks could offer a bit of the best of both worlds.

Nothing succeeds quite like success, and all of the companies on this list have a long history of success in their chosen fields. They also offer investors a middle route alternative between capital gains investing and the hunt for dividends. While investors must of course do their own due diligence and buy these names only at compelling prices, the underlying businesses are such that long-term holders should expect a good mix of earnings and dividend growth.

Source: Investopedia

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Eleven companies have improved their annual dividend totals each of the last 50 years, putting them at the top of the Dividend Dynamo food chain. In other words, they’ve been giving shareholders consistent raises since before man landed on the moon, before President Kennedy was assassinated, and before the first computer video game was invented.

Since the list is based on annual dividend totals, a company’s Dividend Dynamo status can only be adjusted at the end of each calendar year. But the list is groomed religiously, with each company’s current dividend rate adjusted when necessary. Each company’s dividend total for the previous year is also provided, for comparison purposes.

Source: Guru Focus

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Dividend payers deserve a berth in any long-term stock portfolio. But seemingly attractive dividend yields are not always as fetching as they may appear. Let's see which companies in the application software industry offer the most promising dividends.

Microsoft sports the best combination for a dividend stock, offering solid income now and a good chance of strong dividend growth in the future. The others bear watching, though, as they're the kind of dynamic companies that can grow into more stable behemoths able to pay dividends. After all, Microsoft's dividend began just in 2003, and Oracle's in 2009. Of course, as with all stocks, you'll want to look into more than just a company's dividend situation before making a purchase decision.

Source: Motley Fool

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Diversification is a key investing concept many financial advisers preach to investors as a way to reduce their risk exposures. Many people interpret this advice to suggest that they should invest in several different stocks across different sectors and industries. This is interpretation is partly correct. However, one area many people tend to overlook is diversifying across different countries.

Perhaps accentuated by the financial crisis that originated in the U.S., there has been a growing trend for investors to diversify away from the domestic securities. This is evidenced by the slide in U.S. dollar foreign reserve holdings over the last decade. Diversification may not give you all the protection you want, but diversifying across countries as well as sectors does provide some safety in the event of negative market developments. In addition, investing in large-cap stocks that also pay a dividend will further spread out the risk of all your assets being affected by a single event.

Source: Investopedia

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Wharton professor Jeremy Siegel came up with the term "corporate El Dorado" while studying the common characteristics of the greatest stocks in S&P 500 history. He found that 97% of the total after-inflation accumulation from stocks came from reinvesting dividends. Dividend-paying stocks act, in Siegel's words, as "bear-market protectors" and "return accelerators." When dividends get reinvested, they purchase more and more shares at lower prices during a bear market. These extra shares act as a bear-market protector. Then, when share prices reverse, the extra shares act as a return accelerator and rocket total returns higher.

I kicked off my multivitamin Rising Stars portfolio by buying a stock that I hope will anchor my portfolio for decades to come. Only a "corporate El Dorado" would fit the bill, and in my case, that turned out to be Coca-Cola. Each month I'll be running my screen in order to give you a list of more of these world-beating companies to consider.

Source: Motley Fool

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Showing resilience during a tough week was a group of stocks that has not been heard from much in the past two years. A group that has been standing on the sidelines of the big dance, waiting for someone cute to tap them on the shoulders and pull them in. I'm talking about large-cap stocks, like the dividend-paying defensive stocks in the telecom, drug and utility sectors, such as AT&T Inc. (NYSE: T), Eli Lilly & Co. (NYSE: LLY), Exelon Corp. (NYSE: EXC) and the enigmatic, suddenly awesome Intel Corp. (Nasdaq: INTC), which is almost hard to categorize these days.

One fascinating thing about the Tuesday session in particular last week was that if you look at the stocks in theDow JonesIndustrials that pay a dividend yield of 3% or greater, you will see that all but one was up, and some performed very well -- much better than you would expect given the fact that the index finished flat. This could be a change of tone in the market, though two days' action is not enough time to say for sure. But if we just look at the one-year returns of most of these conservative dividend payers, we can see that they at least have been buoyant for most of the recent past.

Source: Money Morning

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I am working on questions of portfolio construction in light of what I have come to accept as the attributes of dividend-growth stocks. The basic issue becomes, how does one meld dividend-growth stocks with the asset allocation principles that have been derived from the teachings of Modern Portfolio Theory? Hypothesis #1: Dividend-Growth Stocks Are a Separate Asset Class:

I might as well start with a proposition that will make traditionalists cringe. I believe that dividend-growth stocks comprise a separate asset class. Traditionally, stocks are sliced and diced in many different ways. The Morningstar Style Box (MSB) has become an industry standard, so common that a category like “large cap value stocks” goes unquestioned as an asset class, and investors are advised to have a certain portion of their assets in that class. So my hypothesis is that, if a single cell of the MSB qualifies as an asset class, then an oval shaped area that cuts across several traditional cells—but which contains stocks that share important behavioral characteristics—also qualifies.

Source: Seeking Alpha

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Dividend-growth investing is not widely recognized in the established retirement industry. Typically Registered Investment Advisors (RIAs) focus on: 1.) Maximizing capital, 2.) Adjusting the portfolio to make it “safer” as retirement approaches and 3.) Embarking on a “distribution” or “retirement withdrawal” strategy.

Then off you go into a slow-motion race to the bottom, to see which kicks the bucket first. With the help of reader suggestions, I located a few RIAs that see things differently. These firms not only accommodate some degree of dividend-growth investing in a customized portfolio, but they actually stake their businesses and reputations primarily on the dividend-growth strategy.

Source: Seeking Alpha

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An interesting aspect of Joel Greenblatt's Magic Formula Investing (MFI) strategy is that its precepts can be applied to a variety of other stock strategies and focuses. For example, if you like to invest in small caps, MFI can be used to find good, undervalued businesses in a sector that is under-followed by professional equity analysts. If you are looking to invest in foreign markets, MFI can be applied to stocks in foreign exchanges, and so forth.

We can also go the other way, and apply additional criteria to stocks in the official MFI universe. In theory, doing this starts us with a list of good, undervalued companies, weeding out a lot of junk from the beginning. This article will focus on combing through the three screens covered by MagicDiligence (top 50 over $50 million and $1 billion, top 30 over $3 billion), looking for MFI stocks with relatively safe dividend yields above 3.5%, providing ongoing income for investors.

Source: The Street

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Eleven companies have improved their annual dividend totals each of the last 50 years, putting them at the top of the Dividend Dynamo food chain. In other words, they’ve been giving shareholders consistent raises since before man landed on the moon, before President Kennedy was assassinated, and before the first computer video game was invented.

Since the list is based on annual dividend totals, a company’s Dividend Dynamo status can only be adjusted at the end of each calendar year. But the list is groomed religiously, with each company’s current dividend rate adjusted when necessary. Each company’s dividend total for the previous year is also provided, for comparison purposes.

Source: Guru Focus

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Investors can make big money from unknown and misunderstood companies. Recently, I found a spinoff whose fat dividend is "guaranteed" for the next four years. The large dividend and the fact that the company is a spinoff have me excited that this stock could produce huge returns over the years ahead.

The stock is SandRidge Mississippian Trust I (SDT), a royalty trust that was spun off from SandRidge Energy (SD). Royalty trusts entitle unit holders (shares in publicly traded partnerships are called units) to profits from specific mineral properties. Like master limited partnerships, or MLPs, they are taxed differently from normal corporations and have some tax advantages for long-term shareholders. A key difference, however, is that royalty trusts represent a share of proceeds of a depleting asset. There's only so much oil in a given area that can be profitably drilled.

Source: Motley Fool

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After falling by $43.8 billion in the first quarter of 2009, total quarterly dividend payments rebounded by $6.4 billion in Q1 of 2010 and another $19 billion during the first three months of 2011. In a recent Standard & Poor's news release, the company's senior index analyst, Howard Silverblatt, said, "If dividends were a paycheck, dividend investors would have received a 6.7% raise in the first quarter." However, Silverblatt does not believe that dividend levels will return to peak 2008 levels until 2013, so investors have much to look forward to during the next few years.

Dividend increases have been seen across the board in multiple industries as consumers return to the market and sentiment continues to improve. With strong operations and balance sheets, many companies are paying out more than $1 billion in dividends to their investors. In order to find a sustainable dividend, investors will often have to turn to blue chip stocks. Although many of these companies don't offer the desired 10% yield, they have a long history of increasing dividend payouts and providing long-term capital gains.

Source: Investopedia

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Dividend growth reflects a strong historic corporate performance and the anticipation of future prosperity in the years ahead. In order for a company to issue a dividend it must have sufficient earnings and cash flow to sustain such a policy over the long term. Because investors do not respond well to dividend cuts, a corporation is unlikely to either issue or raise its dividend if a subsequent cut is probable. Therefore, growing dividends reflect a firm's commitment to continuous growth.

While corporations will frequently provide optimistic guidance of future activity, there are two fundamental measures to assess their true beliefs about growth prospects. Firstly, investors can look at the ratio of inventory to sales. As inventory levels increase proportionally, firms are anticipating a spike in demand. Unfortunately, this indicator is somewhat ambiguous because rising inventory levels can also indicate that a company's products are obsolete. On the other hand, the second measure, a growing dividend payout, is less subject to interpretation.

Source: Investopedia

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Morningstar Dividend Investor's Josh Peters addresses the questions every investor needs to ask before buying a stock for yield. My process is really based on the idea of getting the questions right and knowing which questions to ask about a specific business when you're looking at it for the first time and then subsequently as you're evaluating it. Those questions are, if anything, more valuable than the answers. Anytime you make an investment, no matter how conservative or how much you are trying set aside speculation, you are making projections about the future because that's where your profits lie. Your dividend payments, your capital gains, everything.



Source: Morningstar

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Sometimes investors are easily attracted to high dividend yields and they immediately add those stocks to compliment their income portfolios. The fallacy in such a strategy is that the full story behind the stock is often not explored. There could be many different reasons why some companies currently support substantial dividend yields, and these reasons must be analyzed prior to purchasing a stock.

Rather than just looking at the dividend value, investors must take other quantitative and qualitative factors into consideration to determine if the yield is sustainable. Companies that have an unreasonable payout ratio may turn out to be a good investment if their situation improves. However, investors must look beyond just the dividend. (These five qualitative measures allow investors to draw conclusions about a corporation that are not apparent on the balance sheet.

Source: Investopedia

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The power of dividend investing is pretty well known these days. Higher-yielding stocks tend to offer higher returns over time than low- or no-yield stocks do, according to research from Jeremy Siegel and others. In fact, the 20 best-performing survivor stocks from the original S&P 500 in 1957 are all dividend payers.

As the recent economic crisis illustrated all too well, however, you can't buy just any high-yielding stock. Dividends that get cut or suspended entirely can wreak havoc on a stock price -- and thus, your portfolio. Fortunately, there are steps you can take to lessen your chances of buying one of these train wrecks. Siegel sums it up nicely in his book, The Future for Investors: "Bear markets are not only painful episodes that investors must endure, but also an integral reason why investors who reinvest dividends experience sharply higher returns."

Source: Motley Fool

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In a bull market, all eyes are on stampeding capital gains, but when markets fall, slow-and-steady dividend investing often enjoys renewed popularity. During the last recession, however, many dividends got slashed. In fact, the fourth quarter of 2008 was the worst year for dividend cuts since 1956, when Standard & Poor’s began to keep records. Three years later, dividend stocks are again a stable choice, especially since many investors aren’t confident in the growth of equity markets. And the best dividend performers tend to be rock-solid companies with a low chance of seeing their yields cut or eliminated.

Some of the companies on this list are returning favourites. Among them are Enbridge and Rogers, which have consistently increased their dividends—even during the recession. Corus Entertainment also rejoins the list after dropping off last year. Among the big banks, which are generally considered safe dividend picks because they pay out solid 4% yields, only one made our cut: RBC. Now that its U.S. consumer banking unit is reportedly up for sale, the company may put an end to its decade-long struggle south of the border, which should be good news for the stock.

Source: Canadian Business

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I’ve written before about the power of fat dividends to crush the market, and I’ve discussed five special dividend stocks that are poised to rapidly increase their payouts. But it not only feels good to invest in high-yielding dividend stocks for current income -- it’s a viable long-term strategy, too. And the situation is even better if you can find stocks that are mispriced because investors do not fully understand them, so that their yields are even higher than they otherwise would be.

Ask the good folks at Tweedy, Browne. They reviewed the academic and professional research and concluded that high yields lead to attractive returns over long periods. Dividend stocks also provide decreased volatility and more downside protection. Good news for those of us (like me) who invest in such stocks. I’ve shown elsewhere that if you’re investing for yield, it makes a lot of sense go with a higher yield over faster-growing but lower-yielding dividend payers. That high yield gives you a great head start. In fact, it can take a decade or two for even the fastest-growing dividend stalwarts to catch just a reasonably growing high yielder.

Source: Motley Fool

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It's no wonder that investors are so hungry for dividend stocks. Not only do dividend-paying stocks provide income, but they also consistently outperform their counterparts, especially during periods of market pullbacks. When it comes to investing, it just doesn't get much better than that. Here we examine the long-term performance of dividend-paying stocks compared to those that do not offer the income benefit. The results are rather intriguing.

In the 14-year time frame beginning March 1997, the S&P Global 1200 Index produced a total return of 100%. However, the S&P Global Dividend Opportunities Index produced a nearly 300% wealth gain during the same interval. Likewise, investors whose portfolios mimicked the broad S&P 500 would have seen their portfolios increase by a whopping 150% over the last 15 years. On the other hand, those who invested in the S&P 500 Dividend Aristocrats Index would have realized a gain of approximately 290%. This discrepancy in returns becomes magnified when assessing the returns between March 2000 and 2010.While the broad S&P was practically flat, the High-Yield Dividend Aristocrats Index gained around 150%. Clearly, dividend-paying stocks tend to significantly outperform their counterparts during market downturns.

Source: Investopedia

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With the 10-year T-note yielding only 3.21%, investors interested in getting income from their investments are in sort of a tough place. Dividend-paying stocks are a very good place to look for a replacement. One thing you know for sure is that the coupon payment on a 10-year note is not going to rise. A yield of 3.21% does not offer much of a cushion against inflation.

A company that has a long history of dividend growth is more likely to increase its dividends in the future than companies that have gone for years without an increase in the checks they send to shareholders. Some of the firms on the list below have extremely high dividend growth histories over the last five years. I would not expect those rates to continue.

Source: Zachs

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Summary only...

We prefer high dividend stocks since they generally perform better and usually increase dividend payments over the next 5-10 years. Some sectors contain many high dividend stocks and may appear attractive to dividend lovers. In these sectors stocks' performances are usually more robust and correlated with higher dividend yields within.

Utilities sector is one of the high dividend yielding sectors. We compiled a list of top 30 U.S. Utilities Stocks (the sector classifications are sourced from Finviz) by market cap and ranked them based on their 12-month dividend yields. We strongly believe that these 30 stocks as a portfolio will beat the 10-year Treasury bonds. It is also very likely that the outperformance will be substantial. Investors should consider building a diversified portfolio of high dividend utilities as an alternative to investing in long-term government bonds.

Source: Seeking Alpha

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Summary only...

For investors with a long-term horizon, it’s important to not only look at a stock’s current dividend yield but also to look at its payout ratio. A payout ratio is simply the percentage of net income a company pays out in dividends. A young, fast growing company will likely have a very low payout ratio, assuming it even pays a dividend at all. As the company grows and matures, however, it will have less growth opportunities and will plow back less cash into the company and more into your wallet.

For a company to consistently raise its dividend at such a high rate over a long period of time, it needs to generate solid free cash flow, have a strong competitive advantage, and more than likely raise its payout ratio. Stocks with excellent potential have strong cash flow, a history of double-digit dividend increases, a relatively low payout ratio, and a competitive advantage in their respective markets.

Source: Zacks

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Summary only...

With the markets showing continued signs of volatility, investors are looking for safe havens. Dividend paying stocks traditionally get attention during hectic times in the market as investors are more likely to believe in the company's security and real earnings power. During the financial meltdown, several conglomerates were forced to cut their hefty dividend payments, however after posting improved profits in recent quarters, many industry heavyweights have begun returning more value to shareholders.

Executives at General Electric said the company's profit growth should accelerate in the second half of this year and next as the company emerges from recession with a simpler group of businesses. With the company's bottom line improving, GE has now boosted its dividend in three consecutive quarters. The company's Chairman and Chief Executive Jeff Immelt called the latest dividend increase a show of confidence in GE's outlook but said the company aims to eventually return to its pre-recession tradition of predictable, annual increases. The company's 2009 dividend cut was the company's first in more than seventy years, Immelt calling it "the toughest decision (he) ever had to make as CEO."

Source: Market Wire

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Summary only...

It's official: According to Howard Silverblatt at Standard & Poor's, the first four months of dividend increases in 2011 have already surpassed total dividend increases for the full year of 2010. In total, the 500 largest firms on Wall Street have increased their payouts by nearly $21 billion so far this year, a massive upswing in the cash that companies are willing to part with for the benefit of their shareholders. But the dividend hikes that companies are paying out right now are even more significant than that massive $21 billion number suggests.

Historically, statistics show that dividend stocks are about much more than just income payouts. On a total return basis, they significantly outperform their non-payer peers as a whole. Over the last 36 years, dividend stocks outperformed the rest of the S&P 500 by 2.5% annually, and they outperformed nonpayers by nearly 8% every year, all while paying out cash to their shareholders, according to a study from NDR.

Source: The Street

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Summary only...

Because stocks have had solid double-digit gains over the last 12 months, we hear many people predicting that they are ready for a fall. In addition, the "Sell in May and Go Away" crowd is giving us all the statistics of how stocks have fared between May and November historically. The reasons given for a stock sell off are full of language about momentum, price gains, and too much-too soon. We want to add very quickly that few of the "stocks are too high" crowd today were among the "stocks are too low" crowd at the market bottom in March of 2009. Indeed, if you go back to their blogs and read what they were saying around the bottom of the market, you will find many of them were saying "stocks are too high," even then.

Ah, but we beg to differ! In the long-run, valuation will rule just like it always has.The reason is over the last 80 years, S&P stock prices are highly correlated to both After Tax Profits and Dividends. The computers and traders will wage their daily battles of betting on zig or zag, but in the long-run, zigs and zags will ultimately be seen as vanity, a chasing after the wind. From a valuation perspective, stocks are still cheap and could only become expensive if the economy were to fall off a cliff and drag earnings and dividends with it.

Source: Rising Dividend Investing

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