General Electric’s Dividend Increase Signals Progress for Income Investors
General Electric (GE) announced a 4% dividend increase on Friday, increasing its quarterly payout by a penny from 23 cents per share to 24 cents. While General Electric’s dividend increase was perhaps smaller than some long-term shareholders desired, it was still meaningful because it marked the company’s first payout raise since late 2014. However, GE’s dividend payout remains 23% below its peak of 31 cents per share, which ended in early 2009 when the company slashed the quarterly dividend to 10 cents. General Electric is one of those companies that elicits strong feelings (to put it nicely) from many investors. The company has a history of overpromising and under delivering, GE’s share price remains lower than it [...]
Procter & Gamble (PG): A Dividend King Poised for Faster Dividend Growth
Many investors think that the only way to build truly substantial long-term wealth is to buy the next high-flying tech stock such as Facebook (FB), Amazon (AMZN), or Alphabet (GOOG). However, as you can see below, boring but slow and steady growing blue chip dividend stocks, especially the dividend aristocrats and dividend kings such as Procter & Gamble (PG), are also great ways to meet your financial goals over the long run. While these types of businesses don't have the lofty growth rates boasted by some companies, their predictability has clearly benefited dividend growth investors over time. In fact, over the past 21 years, including dividend reinvestment, Procter & Gamble has crushed the S&P 500 701% [...]
PepsiCo (PEP): A Top Dividend Growth Stock for Long-term Investors
PepsiCo (PEP) is one of the best dividend growth stocks in the market and a core holding in our Top 20 Dividend Stocks portfolio. The company has paid dividends for more than 50 years while rewarding shareholders with 44 consecutive dividend increases, making it a member of the exclusive dividend aristocrats list. Sporting an above-average dividend yield and solid long-term earnings growth potential, Pepsi is a dividend growth machine that dividend growth investors should familiarize themselves with. Let’s take a closer look at Pepsi’s business and why it is such a special dividend stock. Business Overview Pepsi incorporated in 1919 and is a leading global convenience food and beverage company with about $63 billion in revenue. [...]
Simon Property Group (SPG): A Blue Chip REIT Down Over 20% Since July
Real Estate Investment Trusts, or REITs, are a great way for long-term income investors to gain exposure to real estate without the hassle that comes with actually owning, maintaining, and managing rental properties. In fact, REITs, if carefully chosen, can help you achieve the ultimate form of financial freedom; being able to live off pure dividend income during retirement, including early retirement. Of course with so many REITs out there investors can have a tough time choosing where to invest their hard earned money. Let’s take a look at one of the largest blue chip REITs, Simon Property Group (SPG), and see if now, thanks to the recent REIT correction, this mall owner deserves a core spot [...]
AmeriGas Partners (APU): The Gold Standard of Propane MLPs Is Still a High-Risk Proposition
Master Limited Partnerships, or MLPs have been an increasingly popular stock sector in recent years thanks to their preferential tax treatment that results in a business model that pays out the majority of cash flow in the form of very generous high-yields. However, as with most high-yield stocks on Wall Street, one needs to be extra careful because MLPs, like many industries, have their own risk factors to keep in mind. In addition, investors need to carefully research any individual MLP to make sure that a sky-high yield doesn’t signal that a stock is a value trap (i.e. its business is in distress). This brings me to America’s largest and most popular propane MLP, AmeriGas Partners (APU). [...]
Coca-Cola (KO): A Safe Dividend King Trading at Its 52-Week Low
When it comes to long-term blue chip investing, it’s hard to go wrong with dividend aristocrats. Of course, the only thing better than a company that has grown its dividend 25 or more consecutive years is a dividend king, like Coca-Cola (KO), which has one of the best payout growth track records in America with 54 straight years of dividend growth under its belt. Then again, long-term investing is a forward looking endeavor, and many dividend lovers are understandably worried about where Coke’s future payout growth is going to come from. Fortunately, management has a turnaround plan in place that could allow the dividend growth train to keep rolling along nicely for many more years, and possibly [...]
Enterprise Products Partners (EPD): How Safe is this High-Yield MLP’s Distribution?
Over the last few years, record low interest rates have made Master Limited Partnerships, or MLPs, one of the hottest high-yield equity classes on Wall Street. While it’s true that this sector has its own risk factors that investors need to be aware of, certain midstream MLPs (those that operate gathering, processing, storage, and transportation infrastructure such as pipelines) can make compelling long-term, high-yield dividend growth investments. Let’s take a look at one of the largest midstream MLPs, Enterprise Products Partners (EPD), to see if this high-yield energy stock is one of the few “sleep well at night” or SWAN names in its industry and a potential fit for our Conservative Retirees dividend portfolio. More importantly, find out [...]
Bank of America (BAC): A Dividend Growth Stock That Benefits from Rising Interest Rates
Few investors will ever forget the terror of the financial crisis of 2008-2009, when the global financial system was on the verge of complete collapse and many people were convinced we were headed for another depression. Shareholders of U.S. megabanks such as Bank of America (BAC) were especially brutalized, when one of America’s largest banks came within a stone’s throw of complete insolvency and saw its shares fall over 90% from their all-time high. Understandably, large banks have been incredibly out of favor since then, despite what has been one of the more impressive turnarounds in corporate America. In fact, Bank of America’s efforts allowed it to raise its dividend by 50% earlier this year, and more payout [...]
MLP Tax Guide: Key Issues and Benefits to Be Aware Of
Master Limited Partnerships, or MLPs have become an increasingly popular equity class, and for good reason. With most MLPs concentrated in the midstream sector (i.e. gathering, storage, and transportation of oil & gas), the business model for many MLPs is built around long-term contracted, fixed-fee, tollbooth style cash flow. Since most MLPs pay out almost all of their distributable cash flow, or DCF (MLP equivalent of free cash flow and what funds the payout), MLPs generally offer attractive high-yields, which has attracted massive investor attention in this age of historically low interest rates. Of course, on Wall Street there are always tradeoffs, and MLPs, like all equities, come with certain risks that investors need to understand before investing [...]
5 Reasons to Be a Dividend Growth Investor
As a dividend growth investor knows, it’s not exactly a secret that the U.S. stock market has been one of the greatest long-term wealth generators in history. In fact, between 1871 and 2015 the S&P 500 has recorded a compound annual growth rate, or CAGR, of 9.1%, increasing a staggering 285,436.41 times in value. However, as with most things in life, actually reaping the potential rewards is much harder said than done. For example, according to BlackRock (BLK), the world’s largest asset manager with $5 trillion in assets under management, the average retail investor has woefully underperformed the market over the past few decades. As seen below, the average investor generated an annualized return of 2.11% over [...]