Updated 2-16-15
THE DIVIDEND ROOM
THE DIVIDEND ROOM
Just as the name Dividend Yield Investor indicates is my affinity with dividends; for they have never gone out of style as far as I'm concerned. In the end they are the real reason investors, as opposed to speculators, purchase quality companies with increasing dividends. In my mind these are the true growth stocks. As the dividend is increased over time so will the stock price. As the legendary Charles Dow has written:
"To know values is to know the meaning of the market. And values, when applied to stocks, are determined in the end by the dividend yield."
The Dividend Room is a new addition to my blog showing a list of high quality dividend paying stocks for your further study. All picks are basic time tested value approach. All companies have a reasonable low level of debt for their respective industry and a low PE multiple. Of course a competitive dividend yield two times greater than the S&P 500 with a payout ratio less than 85% for utilities and all others less than 50%. Also screened companies that have increased their dividends on a regular basis (the true growth stocks). Included is additional screens based upon the Benjamin Graham approach for the defensive investor.
Our attempt is to find ten high quality companies with a yield double that of the S&P 500. Recommend selling when the dividend yield is less than the S&P 500.
Please note: Companies that fall off the list are not necessarily companies gone bad they simply have risen in price or no longer represent the deepest value and/or highest dividend yield.
For diversification purposes recommend building up to 40 to 50 companies.
The price of oil is in the news which has pounded down the prices of many of the finest oil/gas/servicing companies in the world. Let's start there and expand into other industries.
Yield S&P 500 Dividend Yield 1.95%
Oil/Gas/Service
5.10% Sasol Limited symbol SSL
4.00% Helmerich & Payne symbol HP
4.30% Spectra Energy Partners SEP
6.60% Alliance Resource Partners LP symbol ARLP
Utilities
6.60% Companhia de Saneamento Basico symbol SBS
4.10% UIL Holdings symbol UIL
Apparel Stores
4.70% Guess' Inc. symbol GES
Tobacco Products
4.50% Universal Corp. symbol UVV
Toys & Games
5.50% Mattel, Inc. symbol MAT
DYI recommends that you use our stock allocation formula to arrive at your allocation of stocks to bonds. Currently it is at 28% for stocks. For your cash holdings Vanguard's Short Term Bond Index symbol VBIRX or for those in a high tax bracket Vanguard's Limited Term Tax Exempt VMLTX.
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The Dividend Yield Investor is a blog site for entertainment and educational purposes ONLY.
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