Value Investing News

In the U.S. and Canada, most companies pay dividends quarterly. In other parts of the world, it is not uncommon for companies to pay an annual or a semi-annual dividend. That is not to say that North American companies sometimes choose not to pay quarterly dividends.

The recent turbulence in the market has provided income investors first hand experience in managing their dividend growth portfolio in a declining market. Here are some things that will help you succeed and thrive when the bear puts his paw print on the market:

From the time the first fire was discovered until now, energy has played a critical role in the development of modern man. As our society has developed, we have require an increasingly large amount of energy. We rely on companies in the Energy Sector to supply our needs.This sector will only become more valuable as time passes and resources become more scarce.

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When selecting dividend growth stocks, I take a value approach in determining the maximum price I can pay and still obtain my long-term target. The focus is on the investment's value derived from the future dividend stream generated by the stock. Since I am looking at stocks differently than many other investors, I can often find value, as I have defined it, when others can not.

To succeed as a dividend growth investor you must identify and purchase stocks with sustainable dividend growth. Inertia is powerful force. Once a company has established a track record of growing its dividend over the decades and developed a shareholder base that expects higher dividends each year, it becomes increasing difficult for management to cut or fail to raise their dividend.

Few companies have managed to raise dividends for several consecutive years in a row. For example there are fewer than 300 companies listed on US exchanges which have raised distributions for more than one decade. Of particular interest to many dividend investors are companies which are able to raise earnings, which fuels future dividend growth.

Are you confident and secure in your investing process? It appears many people are not. We must follow a process we are 100% confident in. Doubt is the gateway to destructive behavior. For me, dividend growth investing is what I am confident and secure in.

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.