Dividends4Life: Buy XOM and CVX, Set Up a DRIP and Watch the Returns Pile Up

Anyone and everyone with a few bucks in the stock market should know what a DRIP, or dividend reinvestment plan, is. And anyone with a long-term time horizon should simply buy Exxon Mobil Corporation (NYSE:XOM) and Chevron Corporation (NYSE:CVX) stock, set up a DRIP, sit back and wait patiently. The returns aren’t likely to disappoint. Here’s why I think XOM and CVX — especially when coupled with a DRIP — are such unique opportunities.

Let’s say you set up a DRIP with XOM stock 30 years ago. If you put $10,000 in that DRIP in April of 1985, that money would be worth more than $400,000 today. No, I didn’t misplace a decimal. The return of the S&P 500 over the same time frame, with dividends reinvested, would still have been remarkable — your $10,000 would’ve turned into $230,00 — but you would’ve left about $170k on the table. CVX stock illustrates the power of DRIP investing pretty powerfully, too. Chevron is also a perennial dividend-raiser, with 29 straight years of dividend growth to its name. In the 25 years between 1988 and 2013, a $10,000 investment would’ve transformed into $253,657 with dividends reinvested … and “only” $136,437 if you simply took a dividend check each quarter.

Source: InvestorPlace

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