As a tool for the creation of a stable residual income, the dividend was the test of time. Studies show that from 1926 to 2004, dividends accounted for 35% of shareholder value. But to increase after the addition of the strong impact of the reinvestment of dividends and composition, the dividends of more than 25 times the price.
To buy during the tech bubble / dot.com boom of the late 90s, many investors ignore dividend yield to find the best stocks. But that is no longer the case, as now, “Today, many high-tech companies also started to pay off.
In fact, since 2003, told CNN that “There were over 100 dividend increases and initiations in high-tech companies, from 4 cups of dividends. Initiating dividends helped these companies have the confidence of investors shortly after the bursting of the Internet bubble to get it back. “
So what makes this group so special dividend stocks. Finally, not every stock dividend, the purchase value, even if it pays a high dividend. In fact, an unusually high dividend is often a warning to investors to income? To avoid floor, although the highest dividend in the comparison group.
What distinguishes Dividend Aristocrats in the S & P is that this group of stocks whose dividends for 25 consecutive years of increase. It is noteworthy that some of these companies increased their profits more than 50 years of service. These are the stocks with a long history of regular dividend growth, to say the least.
Logic would require that each company continues to increase to support a solid business model with enough cash flow to their payments over two cycles of good and bad economy. where, given the current economic downturn of 2008-2009, some of these companies actually cut their dividends and are removed from the group next year.
Yes, that companies investing in this group in fact the best stocks. You need only buy stocks with the highest dividend yield, or is it to find a better way to invest the best dividend stocks in this sector?
First, take a look at the areas of: Is it attractive stocks in a sector beaten down or is currently lagging behind such as health care or public services? For example, these two sectors by 6.5% and 7.1% in 2009, while the material sector is currently up over 27%!
Value as an investor, you can create files that don ‘made huge spectacular run to look to new highs, but are a little late. The trick to this strategy is to ensure that t the stock or group of peers doesn ‘serious internal problems and external problems. For example, tobacco companies were to invest in solid stocks for many years, problems than on health.
Peer companies always compare companies? to get more clear picture of their strengths and weaknesses. A good place for it is clean on the grounds of the station, a menu with a feature called “base rate”, can you compare a stock with industry, sector and S & P simultaneously. You’ll see comparisons between the many statistics, including: market capitalization, revenue per employee, the dividend yield dividend growth, return on assets, return on equity, return on investment, P / E to book price, price to cash flow, debt / equity, and many other statistics.