A recent article by SA contributor Mr. Nelson Smith caught our attention and perhaps the attention of a lot of Dividend Growth Investors [DGI] on Seeking Alpha. The comments section in that article is an evidence of it. Mr. Smith's main argument is that investors might be over paying for dividend growth giants like Coca-Cola (KO), McDonald's (MCD), Johnson & Johnson (JNJ) and that dividend growth investors should look beyond these well known names. Sure, there is nothing wrong with diversification but why would so many investors stick with these companies through good times and bad? We present a few reasons below, with all due respect to Mr. Smith and his article. Let us get into the details.
Portfolio Volatility: One of the main reasons dividend growth investors tend to stick with a few well known companies is the steadiness that these companies offer. Sure, one can always look back at periods like 2009 and say no company is safe. But you need to have your money invested somewhere (unless you want to play the riskier game of timing the market each time). Reliability: Hang on a minute before you dismiss this as being the same as the last point about volatility. This reliability factor is about these companies and their dividend growth streaks. Staples: Mr. Smith also pointed that Staples like Coke, McDonald's and Altria (MO) are heavily favored by dividend growth investors. Diversification: Who says there cannot be a diversified portfolio of dividend growth stocks? Dangers of High Yield: Buying the highest yielding stock might look like a no brainer.
Source: Seeking Alpha
Related Articles:
- International Diversification May Be Closer than You Think
- 10 Dividend Stocks With A 10% Yield In 10 Years
- Free Cash Flow Payout vs. Dividend Payout
- 9 Dividend Stocks Trading at a Double-Digit Discount
- 6 High-Dividend, Low P/E Value Stocks
Dividend Growth Investors Are Perhaps Doing It All Right
Posted by D4L | Monday, December 30, 2013 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
~
Popular Posts Last 30 Days
-
Long-term investors know that dividends can have a major impact on returns over time. When the stock market is struggling to make gains like...
-
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...
-
We decided to go on a hunt for quality stocks that for one reason or another have been buried, and not just this year. We found three incred...
-
Buy and hold ... forever? It's a tall order, but a select few companies are potentially up to the task. You can build a wealth-compoundi...
-
Does the high interest rate environment we're living in have you feeling down? Here's something to remember that can help you turn t...
-
Dividend stocks can be consistent market-beaters. However, empirical research shows that the best dividend stocks tend to generate better-th...
-
High-quality dividend stocks are always worth loading up on. This is doubly true for companies that offer shareholders an attractive mix of ...
-
Some dividend-paying companies have seen their financials struggle over the years. These companies become vulnerable to dividend cuts which ...
-
Essentially, we’re looking for more Apples – tech firms with a large market cap (at least $1-billion) and the financial means necessary to p...
-
Numerous high-quality dividend opportunities are up for grabs at the moment, which may be appealing to some investors given the uncertainty ...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.