You may be familiar with Lowell Miller's recommendation in The Single Best Investment to use utilities and / or other stable,
high dividend stocks as a substitute for bonds in a traditional portfolio.
Not exact matches
There are a multitude of reasons
as to why this occurs but it's a powerful enough force that many investors have done quite well for themselves over an investing lifetime by focusing on
dividend stocks, specifically one of two strategies -
dividend growth, which focuses on acquiring a diversified portfolio of companies that have raised their
dividends at rates considerably above average and
high dividend yield, which focuses on
stocks that offer significantly above - average
dividend yields
as measured by the
dividend rate compared to the
stock market price.
Money trees may not be real, but
high - quality
dividend stocks can be just
as good.
Investors have long known that a
high -
dividend strategy has been subject to various «yield traps,» such
as those stemming from temporarily
high earnings,
high payouts or falling
stock prices.
During the first half of 2016, a rotational migration to low volatility, potentially
higher - income assets became evident,
as did the outperformance of
dividend - generating
stocks.
As far as dividend stocks go — please — sell your dividend stocks off so that I can get a higher yiel
As far
as dividend stocks go — please — sell your dividend stocks off so that I can get a higher yiel
as dividend stocks go — please — sell your
dividend stocks off so that I can get a
higher yield!
These are defined
as stocks that historically paid a persistently
higher - than - average
dividend (
as a percentage of their share price) over time.
As it's become clear that low interest rates are here to stay,
high quality
dividend stocks are harder to find.
In order for companies to keep paying
higher dividends, their earnings also need to increase which usually causes the
stock prices to go up
as well.
My IRAs are primarily in widow and orphan
dividend growth
stocks, and I keep about one year's worth of expenses in
high - yield preferred ETFs
as an emergency fund.
Still,
as a
high yielding
stock this may be one to keep for a limited time
as many
dividend growth investors are looking to jump start their current income and then move into lower yielding,
higher quality and
higher dividend growth
stocks.
High -
dividend stocks such
as utilities and phone companies fell; those
stocks are often compared to bonds and they tend to fall when bond yields rise,
as higher bond yields make the
stocks less appealing to investors seeking income.
I appreciate your argument about how certain
dividend stocks will never be able to to match the returns of
high growth
stocks such
as Tesla.
Furthermore, and perhaps just
as important, one should aim to invest when the valuation on a
high - quality
dividend growth
stock is appealing.
Platinum Members and
higher can access January's
Dividend Growth
Stocks Model Portfolio
as of Friday, January 26.
Value
stocks typically offer
higher dividends as well and are in more mature industries.
As I note throughout the Undervalued
Dividend Growth Stock of the Week series, a high - quality dividend growth stock that's undervalued can confer multiple benefits to the long - term investor: a higher yield, greater long - term total return prospects, and le
Dividend Growth
Stock of the Week series, a high - quality dividend growth stock that's undervalued can confer multiple benefits to the long - term investor: a higher yield, greater long - term total return prospects, and less
Stock of the Week series, a
high - quality
dividend growth stock that's undervalued can confer multiple benefits to the long - term investor: a higher yield, greater long - term total return prospects, and le
dividend growth
stock that's undervalued can confer multiple benefits to the long - term investor: a higher yield, greater long - term total return prospects, and less
stock that's undervalued can confer multiple benefits to the long - term investor: a
higher yield, greater long - term total return prospects, and less risk.
As a side note, you should beware of small cap
stocks that pay
high dividends.
In buying
stocks I try to maintain a balance between
high yielders (such
as most REITS) and low yielders with above average
dividend growth rates (
stock like SBUX, DAL).
This forced investors to seek income from «bond - surrogate» investments such
as high -
dividend - paying
stocks,
high - yield bonds, levered loans and real estate.
Within that group of
high -
dividend stocks, the ones that could potentially get hit the most are the richly valued ones,
as there's a greater chance that they have been overbought due to their yields.
Past this level, I consider the investment
as a
high dividend yield
stocks and I would rather stay away from it.
Without engaging in some due diligence, the passive investor seeking exposure to
high dividend stocks could end up in an ETF with a few
as 46 holdings or
as many
as 680.
As you already know per my investing strategy, I'm not a big fan of
high dividend yield
stocks.
When I send him this email, I also added to be very careful with
high dividend yield
stocks as they are riskier than regular
stocks.
There are other real world factors that could drive down an ideal international allocation, such
as taxation (
dividend investors may prefer a
higher allocation to domestic
stocks due to more favorable tax treatment).
Investments such
as convertible bonds, preferred
stocks, and
dividend - paying
stocks have
higher correlation to the equity markets and are more subject to equity sensitivity than fixed income investments such
as U.S. Treasuries.
As you can see many of the
stocks mentioned may have
high current PE's but also feature long to very long
dividend histories with relatively
high ten year annualized
dividend growth rates at around or better than 10 %.
It depends on how your
stock portfolio performs and is somewhat correlated (
as we saw earlier) with how
high your
dividend yield is.
Stocks in the utilities sector offer one of the
highest dividend yields
as a group, around 3.6 % for the Select Sector SPDR Utilities Fund (XLU).
We think they're attractive because they have faster rising earnings,
higher dividend yields and lower valuations than U.S.
stocks, and they can benefit
as global growth accelerates.
That is, set up your investments for direct withdrawal from your checking or savings account, reinvest
dividends, and focus on only buying the lowest risk,
highest quality, most attractively valued
stocks or index funds such
as one based upon the S&P 500.
But today, their
high dividend payouts make these
stocks attractive bond substitutes, and
as such, they sell at much
higher P / Es than they have historically.
Most utilities, packaged food and mature pharmaceutical companies possess characteristics often thought of
as typical for value
stocks:
high free cash generation,
high quality balance sheets and
high dividend payouts.
As a result, the biggest losses went to high - dividend companies such as utility and real estate companies whose stocks become less appealing than bonds to investors seeking incom
As a result, the biggest losses went to
high -
dividend companies such
as utility and real estate companies whose stocks become less appealing than bonds to investors seeking incom
as utility and real estate companies whose
stocks become less appealing than bonds to investors seeking income.
UK
stocks (
as measured by the FTSE 100 Index) offer the
highest dividend yield of any major region (
as measured by the MSCI World Index).1 UK valuations are the cheapest relative to the rest of the world in 15 years.2 What's more, FTSE 100 Index companies with more than 70 % of their revenues from abroad stand to benefit from the weaker pound.
Pick the 10
stocks as of the end of 2016 that had the
highest dividend yields, and then buy shares of them in equal dollar amounts.
Typically, it connotes the purchase of
stocks having attributes such
as a low ratio of price to book value, a low price - earnings ratio, or a
high dividend yield.
Value
stocks: companies that appear to be underpriced based on a number of fundmental factors, such
as low price - to - earnings and price - to - book ratios or
high dividend yield
Another option, though may be not
as safe
as CDs or money market accounts, is
high quality
dividend paying
stocks (always understand that investing in the
stock market is riskier than putting money in bank accounts), some with more than 5 %
dividend yield at the end of 2010.
History shows that times of
high market volatility are good times to be in growth investments such
as dividend - paying
stocks.
As a result, they now offer some of the
highest dividend yields in the
stock market.
Some examples of defensive sectors include utility, pipeline, pharmaceutical
stocks as well
as stocks with
high dividend payouts.
As an investment, Cisco meets all my criteria: It's a
high - quality
dividend growth
stock that appears to be trading below fair value.
The clear investment implication is to begin reducing risk in your
stock portfolio — either by building up cash or shifting your holdings toward more conservative
stocks, such
as those with strong balance sheets and which pay
high dividends.
Speculative traders who focus on
high - risk,
high - reward
stocks (such
as penny
stocks) are more heavily scrutinized than someone who invests in blue - chip,
dividend paying companies that are held for the long term.
To achieve superior returns through bull and bear markets alike, investors should look to
stocks with the very
highest dividend yields, according to a new study by Dow Theory Forecasts, an investment newsletter published since 1946,
as reported by Barron's.
If you stick with top quality
stocks paying the
highest dividends, the income you earn can supply a significant percentage of your total return —
as much
as a third... Read More
As long as I consistently buy stocks with yields of 8 - 10 % and continue my matching program, I think 2016 will see new highs for dividend income (assuming no significant dividend cuts happen or the stock market crashes
As long
as I consistently buy stocks with yields of 8 - 10 % and continue my matching program, I think 2016 will see new highs for dividend income (assuming no significant dividend cuts happen or the stock market crashes
as I consistently buy
stocks with yields of 8 - 10 % and continue my matching program, I think 2016 will see new
highs for
dividend income (assuming no significant
dividend cuts happen or the
stock market crashes).
Other investments are often touted
as a substitute for
high - quality bonds, including
dividend stocks, preferred shares, real estate investment trusts (REITs) and
high - yield bonds.