Dividend Stocks for Patient Investors

When it comes to picking dividend stocks, the current high-yielders are just too obvious. There's nothing easier than looking up whatever stocks have the highest yields at any particular moment. As a potential shareholder, therefore, you have absolutely no competitive edge over any other investor when it comes to buying shares of these companies. Essentially, you're investing with the herd. Again, that's not necessarily a problem -- if you're comfortable with the dividend herd's results. To gain an edge, though, you have to look deeper at something that doesn't pop off the stock pages. In my opinion, that edge lies in dividend growth, especially among stocks whose yields are at least still on the low side.

Here's the theory: Before any dividend stock can arrive among the highest-yielding investments out there, it has to come up through the ranks. At some point, nearly every dividend stock started out paying a relatively small amount to shareholders. Yet time after time, you'll see how over the years, those modest dividends increase and eventually represent real money to investors.

Source: Motley Fool


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