The best dividend stocks are great businesses, but not all great businesses are great dividend stocks. To be considered among the latter, companies need to jump a number of dividend-related hurdles -- five to be exact. 1. A verbal commitment: You care about dividends, so it makes sense the company should, too. Take this quote from Realty Income's (NYSE:O) CEO John Case in his 2014 letter to shareholders: "Our mission, as always, is to manage our real estate assets so that they continue to generate the lease revenue to support growing monthly dividend payments." 2. Proven dividend track record: But talk can be cheap. You are also going to want proof that the company is following through on its verbal commitment. Aflac and Realty Income have increased their dividend every year for at least the last two decades.
3. Model for consistency: Long dividend track records are often made possible because certain companies can generate predictable income -- and that is exactly what you want. 4. Higher than average yield" Beyond the nuts and bolts of the business, you're also going to want some bang for your buck. 5. Growth of income: The real money is made through dividends plus stock appreciation -- and dividend growth is an important factor in that formula. This is because a company's stock price follows the growth of income. It may not happen in lock step, but companies that grow dividends eventually see their stock price follow. Long track records and high yields are icing on the cake. It not as delicious without it, but it all begins with a solid foundation. Start with a wonderful business, decide if it has the five additional qualities, and you will be spotting top-notch dividend stocks like Realty Income and Aflac in no time.
Source: Motley Fool
Related Articles:
- A Disciplined Approach To Dividend Growth Stocks
- 5 Low Beta, Higher Yielding Dividend Stocks For The Next Downturn
- 7 High-Yield REITs With Growing Dividends
- 26 Income Securities For A Well-Rounded Asset Allocation
- International Diversification May Be Closer than You Think
5 Essential Signs of the Best Dividend Stocks
Posted by D4L | Saturday, December 05, 2015 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
~
Popular Posts Last 30 Days
-
If you're worried about inflation rearing its ugly head next year, you should probably worry about more likely catastrophes, such as bei...
-
As a relatively new blogger, the one thing that has stood out in my mind is the number of Canadian bloggers in the areas that I am most inte...
-
When a company pays a dividend, it's a good thing for shareholders. When a company consistently pays a dividend every quarter, it's ...
-
If you've been holding back from investing in your future just because you don't have a lot of extra cash to spare, I've got gre...
-
If you are looking for high-yield dividend stocks that can beat the market, you might want to check out these three companies. They all have...
-
If you are here to build a portfolio that thrives in all seasons, consider dividend stocks. They can generate steady returns and provide sta...
-
My top financial goal is to eventually become financially independent. The foundation of my strategy is to make investments that produce an ...
-
One way to achieve financial freedom is to create passive income, or income that does not depend on your active involvement beyond a certain...
-
The company's remarkable consistency and low-risk business model make it a "first-choice investment opportunity," according to...
-
Since 1926, dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciations have contribut...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.