Aristocrats, Champions, and Achievers

I have to apologize, this post should have been one of my first ones but I got wrapped up in talking about other things and analyzing specific stocks. Hopefully many of you knew of the following lists, but for those of you just starting in dividend growth investing the following links are a valuable research tool.

Our main goal is to find stocks that not only pay a dividend every year, but also raise their dividend each year.  There are a few official lists that keep track of this information for us.  Each of these is a great place to start looking for potential investment ideas.  Of course, just because a stock is on one of these lists does not mean its a good buy.

Dividend Stock Analysis: Altria (MO)

I'm not sure there is a company that has created more wealth for investors over the past 40 years than Altria Group (formerly known as Philip Morris).  Between the dividends they collectively paid and companies that they've spun-off (Miller Brewing Company, Kraft Foods, and Philip Morris International) you would have made a great deal of money being a long-term shareholder.  Of course in hindsight investing we're all millionaires.  What we're concerned about is can Altria continue creating that type of wealth for its investors, or has its heyday passed by.  Altria is the latest stock I put through my analysis that was recently posted on SeekingAlpha.com.

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Side note:  When a stock like Altria creates so much wealth for shareholders it also can create a lot of loyalty.  As you will see in some of the comments on my post, these loyal shareholders don't take to kindly to my analysis of Altria as a future dividend growth stock.

Boring Terms We Need To Know: Cash Flow

You've probably noticed in my stock analysis that I like to use cash flow.  This is essentially net income for a company, but I feel cash flow is a much better gauge for measuring a company's financial health.  Net income (or earnings) can be more easily manipulated by accounting measures and does not always reflect the actual amount of money made for a period of time. So earnings does not always equal cash.  As dividend growth investors we care about cash first and foremost as a dividend payment is simply cash going from the company to the shareholder.

The Key to Smart Dividend Investing

Ask most income-seeking investors what they like best about dividend stocks, and they'll tell you the obvious answer: their current yield. But if you want to be a smarter long-term dividend investor, you have to go beyond current yields to learn the secret of dividend longevity -- in order to make sure those payouts will keep coming year after year, decade after decade.

It's easy to understand, though, why so many investors look first at how much income a stock will pay them right now. It's really difficult to find good sources of investment income outside the dividend-stock arena, as interest rates on bonds and other fixed-income investments are near rock-bottom levels.   Read More