Top Tips:  Best Dividend Stocks

For Long-term Wealth Creation

Click Best Dividend Stocks for this month's recommendation!

Why Dividend Stocks?

For & foremost, let’s remind ourselves why investing in dividend-paying companies makes the most investment sense.  Dividend paying companies became also passé in the last two decades; rather, people wanted returns via stock price appreciation.  Well, the facts are in….and I think you’ll find the results interesting.

As I develop this site further (I launched the draft website in September 2013 and aim to get a first-cut ‘production site’ launched by November 2013), I will be adding new ideas that the New Investor can consider including in his/her investment portfolio. 

For now, let me highlight a few items on how this section will be structured and how I intend to develop it in the future.

My Two Dividend Payer Groupings

Best Dividend Stocks, also referred to here as Core Dividend Stocks should be considered for at least your first 3 or 4 DRIPs - i.e., the are 'core' to your long-term investment portfolio.  If you have a portfolio allocation strategy that includes a 5th DRIP, then you can then consider including one or more Higher-Growth Dividend Stocks. 

The distinction, as I see it, is that the Core Dividend Stocks are large, global multinational companies with sustainable competitive advantages, have well-balanced product offerings, have a long track record of shareholder-friendly policies, and excellent management.  They also have a track record of not just stable dividends but increasing the dividend payout, year after year.

In the Higher Growth Dividend Stocks, my intention is to seek out companies that are in the early stages of increasing dividends by a huge percentage basis.  The idea is to capture the excess returns from companies that are well-established, have probably been high growth, and now find themselves spinning off too much cash to reinvest in their business.  As a result, they have or are about to change their dividend policy to return a higher and higher amount per year to their shareholders.  

To make it easy, I rate the various recommendations with my 'blue chip meter', ranging from 1 to 4, with 4 blue chips meaning the company is the bluest of blue chips (i.e., the highest quality).

As with everything on this website, the ultimate decision lies with you as only you know where you stand on the risk-return tradeoff spectrum.

One last thing:  remember to use the principles of SMART investing as you build out your portfolio.

Core Dividend Stocks

Coca-Cola (September 2013)

3M (September 2013)

IBM (November 2013)

Higher-Growth Dividend Stocks

Cisco (October 2013)

Discussion Board

Bloomberg Businessweek

Myths Dispelled

Hot off the press!

  • Check out the NITK Weekly Journal here!
  • The NITK blog here
 Subscribe in a reader Subscribe in Bloglines

The Water Cooler

  • Click here to comment, suggest, even rant (!)