Every Portfolio Needs a Foundation

“I love the Dividend Income Investing philosophy which is finding great stocks paying higher than normal yields”

As many of you know I am all about High Yield stocks. I love the Dividend Income Investing philosophy which is finding great stocks paying higher than normal yields. But did you know you can apply this philosophy to the Dividend stalwarts commonly call the “The Dividend Aristocrats” or “The Dividend Champions” among many other creative names.

These Aristocrats or Champion stocks are Large Cap stocks that have a long history of paying and / or raising dividends usually for periods exceeding 25 years. Here’s the thing though, occasionally even these stocks find themselves “Out of Favor” for one reason or another. When they do this presents the perfect opportunity for Dividend Income Investors to pick them up at bargain prices and of course as we all know when a stocks price falls its yield increases. So as a result we may be able to find these stocks that normally pay a yield of 4% at maybe 5.5%. This increase in the yield of one and a  half percent can have a huge impact on our returns over a number of years.

How do I play this? Well some of my riskier stocks I do not DRIP the Dividends but let them accumulate into cash. Its this accumulation of cash in my portfolios that I hold back looking for bargains and opportunities. We never know when they will present themselves but when I see one of these “Blue Chip” stocks at bargain prices I add it to my portfolio and use them to build a solid foundation for my portfolio. In this manner I am always adding to the stability of my portfolios without compromising on the High Income I demand.

The point I am trying to convey is that as Dividend Income Investors we don’t have to give up on the more traditional Stocks in order to achieve high yield and high income. Yes, we can have our cake and eat it too!

So what would I consider to be great “Foundation Stocks”?  The list is too large to publish here but you might want to consider some of these:

Proctor & Gamble (PG), AT&T (T), Verizon (VZ), 3-M (MMM), Coca Cola (KO), Pepsi Cola (PEP), Doctor Pepper Snapple (DPS), Pfizer (PFE), General Electric (GE), Johnson and Johnson (JNJ), Honeywell (HON), Altria (MO), Phillip Morris (PM), Duke Energy (DUK), Southern Company (SO), Realty Income (O), Boeing (BA), …………………….. I think you get the point !

Once you get your foundation of best of breed quality stocks established then you can start building on it. This when you have to build a little knowledge and slowly venture into the riskier, but more rewarding stocks that will produce higher income for you. One of my favorite places to look for quality higher yielding stocks is the CCC List or David Fish’s Champions, Contenders and Challenger list (Read : 113 Dividend Increases Expected )  which list dozens of stocks that have raised their dividends for 5 years in a row or more, many for more than 25 years in a row. While it doesn’t guarantee the safety of a stock it is sure a good indication they are serious about maintaining  their dividend payout.

So get started, lay that foundation of quality stocks and prepare to start building on it.

 

What do you think? Do you have a similar philosophy you would like to share? Please comment below.

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113 Dividend Increases Expected

“The CCC list is an excellent resource for Dividend Income Investors.”

One hundred and thirteen companies from Davis Fish’s Dividend Champions, Challengers and Contenders (CCC) list are expected to raise their dividends prior to June 30. This list was compiled by Mr. Fish from his  CCC List and is based on the companies prior history of raising dividends.

Here is a compiled list:

Dividend Champions ( 25 or more years of Dividend Increases )

W.W. Grainger Inc., PPG Industries Inc., Exxon Mobile Corp., Sonoco Products Co.,MSA Safety Inc., Johnson & Johnson, Weyco Group Inc, Conn. Water Service, NACCO Industries, RLI Corp., PepsiCo Inc., Donaldson Company, Farmers & Merchants, Leggett & Platt Inc., UGI Corp., First Financial Corp., Tootsie Roll Industries, National Fuel Gas

Dividend Contenders (10-24 years of Dividend Increases)

Costco Wholesale, Donegal Group Inc. A, Donegal Group Inc. B, People’s United Financial, Franklin Electric Co., Ameriprise Financial Inc., AmeriGas Partners LP,International Business Machines, Southern Company, Xilinx Inc., United Technologies, CCFNB Bancorp Inc, Cullen/Frost Bankers, Expeditors International, FactSet Research Systems, Monro Muffler Brake Inc., Northrop Grumman, Flowers Foods, Travelers Companies, Chesapeake Utilities Corp., W.R. Berkley Corp., FedEx CorpRepublic Bancorp KY, Tiffany & Company, Portland General Electric Company, HDFC Bank Limited, Chubb Limited, National Healthcare Corp., Armanino Foods, Cardinal Health Inc., Farmers & Merchants Bancorp, Regal Beloit Corp.

Dividend Challengers ( 5-9 Years of Dividend Increases)

Signet Jewelers Limited, Aon , Celanese Corp., Lazard Limited, Heritage Financial Corp., Lakeland Bank Corp., Wells Fargo & Co., American Water Works, Apple Inc. , Aspen Insurance, Webster Financial Corp., West Bancorp Inc., Winmark Corp., Invesco Limited, Lithia Motors Inc., Sabra Heath Care REIT, Tractor Supply Company, Materion Corp., Phillips 66, HNI Corp, Pool Corp., Marriott International Inc., PetMed Express Inc., Whirlpool Corp., LyondellBasell Indus., Barnes Group Inc., Avery Dennison Corp., Hyster Yale Materials, KeyCorp, ManPower Group Inc., Sinclair Broadcast GP, Insperity Inc., Southwest Airlines Co., CNO Financial Group, NASDAQ Inc., Legg Mason Inc., Ominicon Group Inc., El Paso Electric Co., Extra Space Storage Inc., Macy’s Inc., MB Financial Inc., Service Corp Int’l, First Financial Bankshares Inc., Franco-Nevada Corp. UnitedHealth Group Inc., Convergys Corp., Lennox International Inc., Towne Bank, Black Box Corp., Domtar Corp., Shoe Carnival Inc.

The CCC list is an excellent resource for Dividend Income Investors. While there of course no guarantees that companies will continue to raise their dividends , history is one of the best indicators. You are encouraged to to visit the CCC List site at the link above.

 

Thoughts or Comments? We would love to hear them.

Top Ten Yielding Champions

“As a Dividend Income Investor – Why settle for lowering yielding stocks?”

The Top Ten Yielding Stocks from the Dividend Champions list for 2017 !


As you can see these are top quality stocks and each and every one of them have been paying dividends for over a quarter of a century and one, Target Corporation, for almost a half a century. Now these are dependable by any measure.  As a Dividend Income Investor I like to choose the top yielding stocks. I could invest in an Index Fund (ETF) that will pay about half of these picks but why? You get  double the income with these picks.

As a Dividend Income Investor – Why settle for lower yielding stocks? Take a look at the top yielding stocks from the Dividend Champions.  And……….. hardly anyone can argue with the quality here.

AT&T Inc.  -33 Years T – 4.70%
Mercury General Corp. -30 Years MCY – 4.25%
Helmerich & Payne Inc.-44 Years HP – 4.31%
Target Corp. – 49 Years TGT-  4.52%
Universal Health Realty Trust 30 Years UHT- 4.31%
National Retail Properties – 27 Years NNN- 4.15%
Chevron Corp.- 29 Years CVX- 4.00 %
ExxonMobil Corp.- 34 Years XOM – 3.69
Old Republic International- 36 Years ORI – 3.80%
Consolidated Edison- 43 Years ED – 3.52%

Average Yield for all 110 Dividend Champion is 2.35%

Average yield of the S&P 500 is only 1.95%

The Average Yield for the top 10 Dividend Champions is 4.125% ( as of 3/27/17)

If you had $100,000 invested in each here is the Income that would be produced :

All Dividend Champions = $2,350 per year

S&P 500 = $1,950 per year

Top Ten Dividend Champions = $ 4,125

Double the Income = Double the Fun ! Why settle for less? For me it doesn’t make sense to do so when you can increase your quality of your holdings and make more income at the same time. With just a little thought we doubled our income. This is what Dividend Income Investors do ! We don’t just invest – we think first, then invest.

This data is courtesy of David Fish and is derived from his CCC List ( Dividend Champions, Contenders and Challengers) You can visit his site(The DRiP Investing Resource Center)

and download the CCC list in Excel or PDF format.

 

We would love to hear your thoughts – Feel free to share with us !

Champions, Contenders and Challengers

“The Dividend Champions, Contenders and Challengers are a valuable resource for the Dividend Income Investor “

What are the Dividend Champions, Contenders and Challengers (CCC Lists) ?

They are a list of stocks that are maintained by David Fish, Editor of the Money paper and, Co-Manager of the Mutual Fund MP 63 Fund (DRIPX),   which invests exclusively in companies that offer Direct Reinvestment Plans. His lists are provided in both excel and PDF can be found at the DRiP Investing Resource Center

He is also an author of 473 articles that he has shared on Seeking Alpha,  a major online investing blog. You can check out his latest articles there by visiting his personal seeking alpha page.

Here is the basic criteria for each category:

Dividend Champions – Companies that have increased their Dividends Payouts for at least 25 consecutive years

Dividend Contenders – Companies that have increased their Dividend Payouts for 10 – 24 years

Dividend Challengers – Companies that have increased their dividend Payouts for 5-9 years

There are currently 115 Champions, 236, Contenders and 480 Challengers on the Lists. As you can see it takes a tremendous amount of effort to make sure they are keep up to date.

Mr Fish keeps the  lists current and in addition has a wide array of media and tools on the website in addition to the CCC lists. There are even lists of Dividend Champions from other countries such as Canada , The United Kingdom and Sweden.

The Dividend Champions, Contenders and Challengers are a valuable resource for the Dividend Income Investor because while history does not predict the future it serves to show the companies that the odds are favoring in terms of trust. It is easy to read and easy to differentiate companies on the list by a wide array of factors and criteria such as the companies Name, Ticker Symbol, the industry or sector, the number of years on the list, its curre4nt dividend yield and even if it is in danger of losing its status by failing to raise its dividend for more than a year.

Dividend Income Investors intends to keep our readers updated on this valuable resource by publishing several articles a year about the list. We intend to update our followers with our picks from each category at least twice per year and write articles that are fact based on data derived from these lists. Thanks to the generosity of Mr. Fish for allowing us access to this valuable data this will enable  provide you, our readers with very informative and actionable articles to help you make decisions on your financial future.   Don’t miss out – be sure to follow us and stay on top when it comes to your dividend Income Investing.

We love to hear from our readers so be sure to share your thoughts and comments below.