Finding The Top Dividend Stocks

Companies are starting to part with some of their cash and deliver those sought-after dividends. So far this year, seven companies have initiated dividends and another 98 have increased theirs. In 2010, just 80 companies raised dividends in the entire first quarter. S&P estimates a first-quarter dividend payout of $56.6 billion, up 16% versus the year-ago period and forecasts a total dividend payout of $225 billion by year-end.

One time-tested dividend hunter is Thomas Cameron. He’s the 84-year-old senior portfolio manager of the Rising Dividend Growth Fund (ICRIX), which invests in firms that pass what Cameron calls the 10/10 Test: companies have to consistently pay dividends at an increasing rate that averages at least 10% per year for a minimum of 10 consecutive years. There are reasons to believe that this investment process works. Through March 9, the fund’s 5-year annualized return of 6.91% bests its benchmark, the S&P 500, by 4.02 percentage points, and leads its Morningstar rivals by 4.48 percentage points, landing in the top 3% of its category.

Source: Minyanville

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