Value Investing News

For many people the S&P 500 and U.S. Stock Market are synonymous terms. While in reality the U.S. stock market is much larger with public companies numbering in the thousands. The S&P 500 Index is owned and maintained by Standard & Poor's, a division of McGraw-Hill. The index was first published in 1957 and is the second most recognized index in the U.S.

It seems that every financial adviser or financial publication is proclaiming that you should own dividend stocks. Each are eschewing the virtues of dividend stocks from their own perspective. To that I have two questions:

Investing in dividend growth stocks is a long-term proposition. One of the beauties of following a dividend growth strategy is that you don't have to watch your portfolio or the market on a daily basis. For the most part, daily, monthly and yearly movements are just noise in the system.

Advertisement:

Utility dividend stocks. When you hear those words what do you think of? Long considered the domain for "widows and orphans", utilities have developed a somewhat stodgy reputation. Why are utilities considered good for widows and orphans? Here a few reasons:

Investing in dividend growth stocks is a long-term proposition. One of the beauties of following a dividend growth strategy is that you don't have to watch your portfolio or the market on a daily basis. For the most part, daily, monthly and yearly movements are just noise in the system.

The Pocket Change Portfolio (PCP) was first introduced on September 13, 2008 as a real money dividend income portfolio funded by the "pocket change" earned from my various online endeavors. Each month I report on the portfolio's progress and update its holdings. Dividends Received
Total dividends received during the month were...

Most CEOs give lip-service to their commitment to shareholders, but what happens when times are hard. When the economy turns down and the future looks bleak, will the company hoard cash and stop its dividend or put action behind its words? The key to successfully selecting dividend growth stocks is the ability to identify companies that will not only maintain but grow their dividend.

It is my goal to create an ever-increasing income stream from dividend growth stocks, while it is my desire to beat the S&P 500 index over the long-term. I believe in long term my dividend income will rise AND I will beat the S&P 500. Otherwise, it would not be a realistic desire. This has been the case since I have been publically tracking my dividend growth portfolio.

Advertisement:

Dividend stocks are sometimes referred to as defensive stocks since many investors flee to them in an economic downturn. Their dividends, if sustainable, provide a minimum level of positive return. This cushions the downward pressure from the market. But what happens when the market turns up?

Make no mistake, Dividend Aristocrats are the blue-blood of dividend growth stocks. When building your core portfolio, this list is where you want to start your evaluation. If you want dividend growth, these stocks have been there, and done that - for decades.

The Pocket Change Portfolio (PCP) was first introduced on September 13, 2008 as a real money dividend income portfolio funded by the "pocket change" earned from my various online endeavors. Each month I report on the portfolio's progress and update its holdings.

If your goal is to accumulate wealth for a comfortable retirement, then there is no risk-free path. Throughout time every angle has been tried and failed. Inherently, individual stocks will carry higher risk due to the lack of diversification when evaluated on a stand-alone basis.

Advertisement:

Over the last several years many companies have chosen to not raise their dividend, while some decided to cut their dividend and some even decided to stop paying a dividend. In some cases their financials did not warrant the change. As investors in dividend growth stocks, we want to look for companies with a positive dividend culture.

Advertisement:

When it comes to dividends, investors either immediately grasp the concept or dismiss it altogether. After all dividend payments are more stable than price returns. In addition to that, dividends have accounted for 40% of average annual total returns since the 1920s. Reinvested dividends on the other hand have accounted for over 90% of total stock market returns since 1871.

When investors put their hard earned money to work, they are always hoping that they would receive a positive return on their investment. The profits could come either through capital gains, from dividends or from a combination of both. Dividends have traditionally been more stable than capital gain returns.