Intel (INTC): A Technology Monopoly Paying Safe, Growing Dividends
Intel (INTC) is one of the most dominant and pervasive technology companies in the world. The business essentially operates as a monopoly in its core computer and data center markets and has numerous competitive advantages that are virtually impossible to replicate by most companies. Intel also offers a healthy dividend payment that scores very well for Dividend Safety and Dividend Growth prospects. While we typically veer away from technology stocks, Intel is the type of business we like to invest in for our Top 20 Dividend Stocks and Conservative Retirees dividend portfolios. Business Overview Intel was incorporated in 1968 and is the largest manufacturer of semiconductor chips in the world. Intel’s primary products are microprocessors and [...]
Cisco (CSCO): Safe, Strong Dividend Growth and a 3.7% Yield
Cisco (CSCO) has been nothing short of an impressive dividend growth stock since it began paying dividends in 2011. The company’s quarterly dividend payment has increased from 6 cents per share in 2011 to 26 cents most recently, including management’s 24% boost to the dividend in February 2016. With a low price-to-earnings multiple, a dividend yield near 4%, and very strong Dividend Safety (87) and Dividend Growth (80) scores, Cisco has caught the attention of many income investors. Let’s take a closer look at the investment case for Cisco as we consider the stock for our Top 20 Dividend Stocks and Conservative Retirees dividend portfolios. Business Overview Cisco was founded in 1984 and has grown to [...]
Monthly Dividend Stocks: How to Get Paid Each Month
Monthly dividend stocks appeal to income investors for several reasons. Stocks that pay dividends monthly provide more predictable income and make it easier to budget, especially for those living off dividends in retirement. Most companies pay dividends on a quarterly schedule, which can result in a lumpier income stream. Monthly dividend stocks better match income with monthly expenses such as mortgage and utility payments to make budgeting easier. Monthly dividend-paying stocks come with another potential benefit as well – faster compounding. Simply put, the more often we receive dividends, the faster we can reinvest to buy more shares and generate even more dividend income. Stocks that pay monthly dividends allow us to potentially increase the number of [...]
Dividend Payout Ratio: How to Calculate and Apply It
The dividend payout ratio is one of the most informative and popular metrics used to analyze the safety of a company's dividend. However, many investors do not realize the number of different ways that dividend payout ratios can be calculated and the other factors that should be considered when assessing the safety of a dividend. Gaining an understanding of the dividend payout ratio can help income investors make better decisions, avoid riskier dividend stocks, and improve the quality of their portfolios. What is a Dividend Payout Ratio? Simply put, a dividend payout ratio reports the proportion of a company's profits that are paid out as a dividend to shareholders. Income investors like to review a company's dividend payout [...]
Qualified Dividends: What You Need to Know to Lower Your Taxes
In the spirit of tax season, it's worth reviewing the differences between qualified dividends and ordinary dividends. While not the most exciting of subjects, understanding what you can do to maximize the amount of your dividends classified as qualified instead of ordinary can potentially save you thousands on your tax bill - and it only takes a few minutes to learn. Each year, we receive a 1099-DIV form in the mail. Banks, brokers, and others are required to issue this form to taxpayers and the IRS to report the total dividends and other distributions that we earned during the year. You can see the list of information reported on Form 1099-DIV below, and we will focus on the first two [...]
Flowers Foods (FLO): Predictable Dividend Growth and a 3.2% Yield
Flowers Foods (FLO) is a reliable company in the consumer staples sector that currently offers a reasonable valuation, a safe 3.2% dividend yield, and above-average dividend growth potential. The business has been very good to shareholders over the last decade as well. FLO’s stock delivered a 12.9% annualized return from 2006-2015, handily beating the market’s 7.4% annual return. The company’s annual dividend payments also ballooned from 9 cents per share in 2004 to 57 cents in 2015, representing an 18% compound annual growth rate. We are interested in Flowers for our Top 20 Dividend Stocks and Long-term Dividend Growth portfolios. Let’s take a closer look at the business. Business Overview Flowers was founded in 1919 and [...]
H.B. Fuller (FUL): A Small Cap Stock With Big Long-term Dividend Growth Potential
H.B. Fuller (FUL) is a small cap dividend growth stock that few investors are familiar with. However, this dependable business has increased dividends paid for 46 consecutive years and is worth some attention. The company operates in a large and stable industry with strong growth prospects. Management is also shifting more of H.B. Fuller’s mix into higher-margin applications, which is expected to drive profits higher over the next five years. Given the company’s potential for meaningful income growth and capital appreciation, H.B. Fuller is the type of investment we look for in our Top 20 Dividend Stocks and Long-term Dividend Growth portfolios. Business Overview H.B. Fuller is a leading provider of specialty adhesives used to create hundreds [...]
National Retail Properties (NNN): A Conservative REIT with 26 Straight Years of Dividend Growth
Fewer than 100 of the more than 10,000 publicly-traded companies have increased annual dividends for at least 26 consecutive years. National Retail Properties (NNN) is one of them. Perhaps more impressively, National Retail’s average annual total return for the past 25 years has been 14.8%, significantly outpacing the market to provide meaningful value for shareholders. The company is conservatively managed and generates a stream of highly predictable operating income, making it an appropriate income investment for our Conservative Retirees dividend portfolio. Business Overview National Retail was formed in 1984 and is a real estate investment trust (REIT) with more than 2,200 properties over 47 states. The company’s retail properties are leased to more than 400 tenants across [...]
Sherwin-Williams to Acquire Valspar in $11.3 Billion Deal
News broke this weekend that Valspar (VAL) agreed to be acquired by Sherwin-Williams (SHW) for $113 per share, representing a premium of 35% to Valspar's closing price on Friday. We own Valspar in our Long-term Dividend Growth portfolio and were pleased with this development. We had previously analyzed the coatings industry and published research on Sherwin-Williams and PPG Industries (PPG). Both of these companies are members of the dividend aristocrats list and Valspar has increased its dividend for more than 35 consecutive years, so it's no surprise that coatings companies are some of our favorite blue chip dividend stocks. According to PPG, the coatings industry is about $130 billion in size but highly fragmented - the largest player has less than 15% market share. [...]
Digital Realty Trust (DLR): A High Quality REIT Consistently Growing Dividends
Digital Realty Trust (DLR) is a fast-growing real estate investment trust (REIT) that has raised its dividend every year since going public in 2004. While the company is far from having a long enough dividend growth history to quality as a member of the dividend aristocrats list, it has numerous attractive qualities. Digital Realty is a direct beneficiary of the rapidly growing usage of data by businesses and consumers alike. It powered through the financial crisis and also scores well for dividend safety and growth. Digital Realty’s stock has been one of the best-performing holdings in our Top 20 Dividend Stocks and Conservative Retirees portfolios, and we remain optimistic about the company’s dividend growth trajectory. Business [...]