Forget Yield -- Dividend Growth Is The Metric That Matters For Retirement Income

Income investors had a little scare in May and June. Bond prices took a tumble and dragged down assets that have come to be viewed as bond substitutes—including popular dividend-paying stocks, MLPs and REITs.

Now that the dust has settled and the income markets have regained some semblance of normalcy, let’s take a step back and review the case for income stocks.  With the Fed’s quantitative easing eventually coming to an end and with bond yields likely to rise in the years ahead, does it still make sense to look to the stock market for income?  Or might investors be better off buying and rolling over a bond ladder to meet their income needs? READ MORE

Disclosure: Long O, WMT

TAGS: [O] [WMT] [JNJ]

Dividend Investors Should Ignore Price Fluctuations

In this day and age we are bombarded with stock market information anywhere we go. You can find stock prices on many TV channels, newspapers, the internet and mobile phones or tablets. This excess of information creates information overload which creates the urge to buy and sell stocks in nanoseconds. This could prove hazardous to your wealth however. Research has shown that investors who actively trade the markets generate lower returns that index funds. In fact, investors would be better suited to just ignore price fluctuations and simply focus on fundamentals. READ MORE

Disclosure: Long WMT, MCD,ABT

TAGS: [KO] [WMT] [MCD] [JNJ] [ABT] [PG]

Dividend Growth Investing is a Perfect Strategy for Young Investors

Imagine your perfect day. You wake up when you are rested, without the need of any alarm clocks. You then do some working out , followed by having a nice healthy breakfast. You then read at your leisure, have a lunch later in the day to beat the 11:30 – 1 pm crowds, and then review your brokerage accounts. You notice dividends from several companies are deposited today, and you decide to transfer them to your checking account. You check for any major items concerning your portfolio holdings, and spend a few hours researching a new dividend stock.

After that you get more time to concentrate on your activities, be it volunteering at the local homeless shelter, mentoring high school students, learning a new language or simply catching up on some good books. Later that day, you might decide to enjoy a few with your mates/gals. This dream is brought to you by dividend investing.  READ MORE

Disclosure: I am long KMR

TAGS: [KMI] [KO] [PM] [PG] [JNJ] [KMR]

Dividend Income is More Stable than Capital Gains

Over the past century stocks have delivered a 10% annual total return on average. The total return consists of price appreciation and dividend payments. The issue with average returns is that over the past century, there are only a few occasions where stocks clocked in annual returns of somewhere close to 10% in a given year. In reality, some years these returns have been much more than 10%, whereas in other years these returns have been less than 10%. As a result, investors should be warned that these 10% in annual returns are not a sure thing every year.  READ MORE


Full Disclosure: Long WMT, KMR, O

TAGS: [MCD] [WMT] [CVX] [KMR] [O]

7 Banking Stocks To Buy For Current Yield And Future Dividend Growth

In 2007 the financial sector was responsible for $51 billion in dividend payments to shareholders. By 2010, that amount had decreased to just $19 billion. The mortgage crisis forced many banks to cut or even suspend dividend payments. Returning the clock to present day, it is hard not to get excited about the potential for bank stocks in the current market. The Financial Sector ETF (XLF) has gained nearly 20% since the beginning of the year. The majority of banks are passing the government mandated "stress tests" and dividend payments are increasing on a regular basis once again. READ MORE



TAGS: [BMO] [BNS] [FLIC] [JPM] [SASR] [TD] [WFC] [PNC]

A Reminder Of Why You Stick With Dividend Stocks

Sorry for the long delay since my last post. I've been very busy and I've had little time to dedicate to original posts of my own. I'm slowly working on analyzing additional banking stocks to consider for my dividend growth portfolio and hope to have that completed soon. In the meantime, here is a Seeking Alpha article from an author I've enjoyed reading.

One of the unfortunate side effects of buying an overvalued stock is that, almost by definition, there will be a period of time in which the total return rate that the investor enjoys will likely trail the growth rate of the firm (provided prices are rational and do not transition from "overvalued" to "more overvalued"). This fact can make it worthwhile to pose the following question: If I currently own a stock that is trading above a price that I would be willing to pay to purchase additional shares, what is the point of continuing to hold it? READ MORE

Disclosure: I have no position in the stocks mentioned in this article

TAGS: [CVX] [JNJ] [PG] [XOM]

Banking Stocks Continue to Improve

Back in late 2011 I decided it was time to invest in banks again. The affects of the mortgage crisis had finally took a turn for the better and banks' financials were improving. TARP funds were being paid back, lending was opening back up, and most importantly dividend payments were increasing again. I wrote about four bank stocks with future dividend potential, and due to the research from that article I decided to take a chance on PNC Financial Services Group, Inc. (PNC).

Since then, PNC hasn't rewarded me much in price appreciation, but it has rewarded me in dividend increases. Last year PNC gave investors a 14% raise. This past week it increased its dividend payment again by 10%. The new payout gives PNC a yield around 2.7%.

Phillips 66 Upcoming MLP: How It Will Affect PSX

Phillips 66 (PSX) has been on a tear since splitting from ConocoPhillips (COP) last year. Aside from its run-up in price, it has also raised its dividend for three straight quarters as well as announced plans to spin-off certain assets into a Master Limited Partnership (MLP).

All of this of course was great news, but I wanted to know about the details of the MLP spin-off. What assets were going to be included in the new company? Will existing shareholders receive shares of this new company, or will it benefit through holding stock in PSX? Well PSX recently shed some light on these questions.

2 Big Dividends to Avoid (and 1 to Embrace)

The following post comes from the Motley Fool. It serves as a nice reminder that bigger is not always better when looking at dividend yield.

With yields on ultra-safe debt stuck in the gutter, many investors are reaching for higher income through dividend-paying stocks. That's a fine strategy -- as long as you're comfortable with the extra risks involved.

To minimize those risks, you won't want to reach too high. Dividend yields that are more than about 4%, for example, are usually worth extra research. You'll also want to screen for dividends that are backed up by strong earnings and sales growth. Ideally, those dividends will have a good chance of rising -- or at least staying put.  READ MORE

My Annual Roth IRA Rant

It's tax time. Time for everyone to get a fresh reminder that Uncle Sam is a greedy old fart who takes away a lot of your money. Oh, and next year most of you will be paying even more. Are you ok with that? I should hope not, but don't fret there is a way to fight back. Invest your money in a Roth IRA.

Those of you who have followed me know I'm a huge proponent of Roth IRAs and dividend stocks. It gives me great pleasure to receive dividend payments in my Roth IRA account, reinvest those dividends to utilize the compounding affect, and not have to worry about paying a cent to the IRS.