Value Investing News

Growth or yield? In a perfect world, income investors would want both from their investments and are not interested in investments that offer neither. This is where the common ground ends, and the debate begins. Without the benefit of a perfect world, we are left with the middle ground which is a balancing act between growth and yield.

This is the third installment in a multi-part series that looks at different sectors that have traditionally been very friendly to dividend investors. Last week we looked at Financial Services Sector. This week we are looking at Industrial Materials…

As a dividend growth investor, two of the best dividend lists for further research that I have focused on have been the S&P Dividend Aristocrats and the Dividend Achievers Indexes.

Over the past 80 years, stocks have returned almost 10% annually. Dividends have accounted for approximately 40% of average annual returns. At the same time inflation has averaged 3% annually. These numbers are all averages however – investors cannot expect to generate 10% per year in total returns every single year. Stock returns fluctuate over time.

Air Products and Chemicals, Inc. offers atmospheric gases, process and specialty gases, performance materials, and equipment and services worldwide. The company is member of the S&P 500, Dow Jones Industrials and the S&P Dividend Aristocrats indexes.

Having narrowly missed the tech bubble bursting, I purchased my first dividend stock on December 11, 2003. I had heard dividend investments were supposed to be safer, but knew very little else about the strategy. I was fortunate enough to accidentally buy enough good dividend stocks to learn the “secret” of dividend investing.

The dividend aristocrats list includes companies which have increased dividends for over 25 years in a row. It is equally weighted and re-balanced once an year. Over the past 3,5 and 7 years the index of elite dividend stocks has managed to outperform the S&P 500 by 5%, 3.7% and 4.40% respectively.