Dividends4Life: Steps For Finding The Best Dividend Stocks To Hold Forever

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There is no question that one of the safest and surest ways to build long-term wealth in the stock market is through dividend reinvestment. This reinvestment allows for a form of interest compounding to take place that builds up the portfolio's value over time. While this makes perfect investing sense, there is more to it than simply buying high-dividend stocks. I learned this the hard way, but my experience helped me to develop an easy three-step method to determine the best dividend-paying stocks for a dividend reinvestment portfolio.

With these points understood, just what makes a dividend stock the best? To answer this question and provide a framework for choosing dividend-paying investments while avoiding questionable high yielders, I developed a universal three-step screening process: 1. Solid Companies with Market-Dominating Products/Services. 2. Consistent History of Dividend Increases. 3. The Buffett Factor - Knowing that Warren Buffett or another proven large investor holds shares of a particular dividend paying stock lend tremendous credence to the investment.

Source: Investopedia

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