6 dividend all-stars Companies that keep increasing their dividends typically provide superior total returns.
NEW YORK (MONEY) -- One of the most reliable ways for investors to build their wealth is to focus on companies with long track records of increasing dividends. Over the long-term, rising dividends not only provide generous income. When dividends keep climbing steadily, share prices tend to move up as well. That's especially true if a company increases its payout every year. Regular dividend hikes are one of the signs of a solid, seasoned management that is committed to rewarding shareholders. Consistency counts more than current yield. Investors who need income may want to focus on the highest-yielding stocks. But shares that pay as little as 1 percent initially can still be winners if their dividends go up rapidly. I've screened the Sivy 70 list, looking for companies that have raised their dividends 30 years in a row. Then I've pared down that list based on financial strength and the current level of analyst support for the stock. In addition, I've looked for a potential total return averaging more than 12 percent a year, based on a combination of projected earnings growth over the next five years and current yield. The table below shows six companies that meet those tests. You can find more such stocks in a number of conservative investing guides. This list is based on information drawn from "America's Finest Companies," available from the Staton Institute (statoninstitute.com).
P/E and dividend information from Thomson/Baseline
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