How to Crush Dividends In 2018

If you are reading this then you almost certainly know what a dividend is. A dividend is a distribution of funds paid to shareholders (investors) based on company profits. These payments are typically made quarterly and are generally in the range of 2%-4% annual. These stocks are classified as income stocks because they provide a steady stream of to the shareholders.

 

Higher Yields Tends to Higher Risk

Investors like to own higher yield income stocks in their fixed-income portfolios in order to get a higher yield that what they can get from other fixed-income products such as CD’s or bonds. The higher yield from the income stocks comes at a cost as the stocks are inherently a bit more risky than the bonds or CD’s.

 

There is a lot to get excited about when considering what dividend stocks can do to your portfolio as many people use these payments as a significant portions of their income. You can use a dividend growth model in order to help you create a solid stream of passive income AND build a sold growth portfolio. Mike at Dividend Stocks Rock (DSR) has put together one of the best models that I have come across to achieve this goal.

 

DSR Model

The DSR model centers around 7 principles that will get to the core which stocks to buy, how long do you hold them, how to diversify them, how to these fit in with my investment goals, etc. The principle help to focus on building a rock solid portfolio.

 

DSR Model Principles

Principle #1: High Dividend Yield Doesn’t Equal High Returns
Principle #2: Focus on Dividend Growth
Principle #3: Find Sustainable Dividend Growth Stocks
Principle #4: The Business Model Ensure Future Growth
Principle #5: Buy When You Have Money in Hand – At The Right Valuation
Principle #6: The Rationale Used to Buy is Also Used to Sell
Principle #7: Think Core, Think Growth

They are succinct in nature but reflects a lot of value and thought consideration. Mike’s dividend growth model is clear, simple, and a home run if your looking to expand your fixed-income portfolio.

 

This was a Guest Post

5 Dividend Paying Stocks You Should Have in Your Portfolio (Dividend Aristocrats)!

If you are saving and investing money and you like the idea of receiving a safe dividend payment at the end of each quarter, then you should certainly consider the below stocks. Dividends are great for a variety of reasons, but they are not all created equally.

 

Dividend Aristocrat??

Many people are not aware of this but there is a list of companies known as Dividend Aristocrats who are recognized for paying (and increasing) dividends for at least 25 consecutive years. While steady paying out a consistent dividend year after year, the companies also routinely outperform the S&P 500. Most of the companies below are on the dividend aristocrats list and should have a place in every investors portfolio.

 

1. Coca-Cola (KO)

Coca-Cola is one of my favorite dividend paying stocks. They are one of the companies that helped make Warren Buffet wealthy. Heck, they helped make Santa Clause’s image recognizable everywhere. Coca-Cola is known for being marketing geniuses and will continue to innovate and grow their company.

Coca-Cola has paid a dividend since: 1893
They have 54 years of consecutive dividend increases
Their current dividend yield: 3.5%

 

2. Exxon Mobil (XOM)

Exxon Mobil is one of the most profitable companies in the world and a leader in the energy industry. They have the ingenuity (and cash) to leaded the worlds energy market for years to come.

Exxon Mobil has paid a dividend since: 1882
They have 34 years of consecutive dividend increases
Their current dividend yield: 3.6%

 

3. General Mills (GIS)

General Mills is a staple in the US economy. Their products are recession proof and a beloved favorite among many.

General Mills has paid a dividend since: 1898
They have 13 years of consecutive dividend increases
Their current dividend yield: 3.1%

 

4. Procter & Gamble (PG)

With the longest steak of consecutive years with dividend increases, Proctor & Gamble is the dividend aristocrat King! With their vast variety of products and consistent performance, it is hard not to have this stock in your portfolio.

Proctor & Gamble has paid a dividend since: 1891
They have 60 years of consecutive dividend increases
Their current dividend yield: 3.0%

 

5. Vanguard High Dividend Yield ETF (VYM)

Although, technically not a stock but rather an ETF and not a dividend aristocrat, I am a big fan of Vanguard funds. With their experienced and talented fund managers and their extremely low fees, Vanguard provides the best results for the money.

Vanguard High Dividend Yield ETF has paid a dividend since: 2007
They have 10 years of consecutive dividend increases
Their current dividend yield: 2.84%