Dividends4Life: Stability Is Important When Selecting Dividend Stocks

When selecting dividend stocks, most of us agree on a few basics. We are looking for stocks that pay a decent to good dividend, that is both able and willing to increase it over time and that is expected to have a long term solid business for years to come. I don’t think many of you would disagree with such comments. That being said, there are other parts where it would be both logical and expected for some to disagree.

Many are fans of buying dividend aristocrats which are known to increase their payout every year for decades. I’ve said in the past that I was not as convinced. I prefer holding stocks that try to maximize their payouts every year. The advantage of course is that the dividend yield tends to be higher as is the growth. The downside though is that compared with a more traditional dividend portfolio (such as the USDP), this one is more likely to see dividends coming down at some point which would of course be an unpleasant surprise.

Source: Guru Focus

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