“There are lots of ways to invest, and which is best depends upon the individual investor’s personal situation. There has been 1 investing strategy that has afforded investors upside participation when markets are rising, modest downside protection when markets are falling, and steady dividend income throughout. This makes it a winning strategy over the long run“– Paul Ebeling
This strategy is to invest in the best dividend stocks, like the Aristocrats and reinvest the dividends. Over time, this strategy allows for investors to generate income, which rises over time, and receive a measure of volatility protection during market downturns.
The Aristocrats represent the most resilient and time-tested businesses, and investing in the best dividend stocks has many benefits.
The Aristocrats: in order for a stock to make it into this prestigious index it has to be a member of the S&P 500, meet certain size and liquidity requirements, and have a dividend increase streak of at least 25 yrs. A 25-year dividend increase streak means that any company in this list can not only pay its dividend during recessions, but also raise it.
Meaning that the company’s earnings and cash flows can support a rising payout irrespective of the economic climate. This means the stock is likely to hold up much better during such events than a stock that does not pay a dividend. That helps with volatility during tough market frames, it also provides the benefit of income, even when the going gets tough.
Our list of Aristocrats contains 65 stocks. The exclusivity of the Aristocrats gives investors an idea of how difficult it is for a company to raise its dividend for at least 25 consecutive yrs.
High-quality dividend stocks give investors access to very resilient and time-tested businesses, the tangible benefit of an income stream that can be spent or reinvested to generate even more wealth longer-term, and some protection during market downturns. This makes the Aristocrats a great place for investors to start when it comes to finding their next wealth building purchase.
We focus on companies with high yields, even longer dividend increase streaks, very high levels of dividend safety, recession resilience, and any number of other criteria to pick the Top 5 for wealth building core positions.
They are as follows:
Number 1 is communications giant AT&T (NYSE:T), a stock we like based upon its high 7% dividend yield and the value the stock represents. AT&T is not a growth stock, but as a utility provider, its earnings and cash flows are highly predictable, it holds up well during downturns, and as mentioned, its current yield is more than 7%.
Number 2 is real estate investment trust Federal Realty (NYSE:FRT), this stock has paid increasing dividends for more than 50 yrs, putting it in extremely rare company. The current yield of 4.6% is very strong at about 3X that of the broader market.
Number 3 is Enbridge (NYSE:ENB) is a healthcare REIT. Its dividend currently weighs in at 7.3%, the payout is on a very sustainable foundation. Enbridge generates extraordinarily steady cash flow backed by long-term fee-based contracts and government-regulated rates. Because of that, it has minimal exposure to fluctuations in commodity prices or values.
Number 4 is hospital owner Medical Properties Trust (NYSE:MPW) currently pays a 5.3%-yielding dividend. This payout is also on a firm foundation. The REIT generates very stable income backed by long-term leases with high-quality hospital operating companies. Meanwhile, it has a reasonable dividend payout ratio and a solid balance sheet.
Number 5 is Crude Oil and Nat Gas pipeline company Williams Companies (NYSE:WMB) currently pay a 6.68% dividend. WMB together with its subsidiaries, operates as an energy infrastructure company primarily in the United States. It operates through Transmission & Gulf of Mexico, Northeast G&P, and West segments. The company owns and operates 30,000 miles of pipelines, 34 processing facilities, 9 fractionation facilities, and approximately 23 million barrels of NGL storage capacity. The Williams Companies, Inc. was founded in Y 1908 and is HQ’d in Tulsa, Oklahoma.
Monday, the benchmark US stock market indexes finished at: DJIA +98.49 at 33171.37, NAS Comp -79.08 to 13059.67, S&P 500 -3.45 to 3971.09. The Russell 2000 closed at session lows – 2.8% decliner at 2158.68, as small-caps were subject to profit-taking interest.
Volume: Trade on the NYSE came in at 998-M/shares exchanged.
HeffX-LTN’s overall technical outlook for the major US stock market indexes is overall Bullish in here.
- Russell 2000 +9.3% YTD
- DJIA +8.4% YTD
- S&P 500 +5.7% YTD
- NAS Comp +1.3% YTD
Looking Ahead: Investors will receive the Conference Board’s Consumer Confidence Index for March, the FHA Housing Price Index for January, and the S&P Case-Shiller Home Price Index for January Tuesday.
Have a healthy week, Keep the Faith!