5 Dividends Growing Up to 20% Per Year

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Dividend Aristocrats are popular. Too popular, if you ask me.

I’ll concede that the surest, safest way big stock market gains is dividend growth. Over time, stock prices are literally pulled higher by their payouts. Their dividends act as magnets that pull their shares higher and make their shareholders rich.

The Aristocrats have delivered plenty of wealth. Heck, to be admitted to the club they must have a track record of 25 annual dividend hikes in a row. At minimum.

Which is fantastic past performance. Problem is, the stock market looks ahead.

Many of these stocks are slowing down. Some—such as Johnson & Johnson (JNJ) and Coca-Cola (KO)—have elevated payout ratios of anywhere between 60% to 90%.… Read more

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I saw this headline float across my Bloomberg Terminal late last week…

There Are More 401(k) and IRA Millionaires Than Ever

(Disclosure and digression: My “Terminal” is Bloomberg.com on my phone. I can thank my long wait at the DMV for my California REAL ID for this story.)

Fidelity Investments—apparently happy to share its customer’s financial info anonymously—says it has more than 750,000 seven-figure 401(k) and IRA accounts.

A chunk of money is great, especially when we can leave it untouched and let it grow. That was no doubt the “secret” of 99%+ of these retirement millionaires. They socked away money for decades and rode the market higher.… Read more

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Dividends are back. And here are 54 secure payouts that are due for a raise between now and March.

The S&P yields a lousy 1.6% as I write. It’s sad to imagine a hefty million bucks in stocks could toss off a mere $16,000 in annual income. So, we income investors need a better play.

And that, my friend, is where these rising dividends come in. They are a “double threat” because we have two ways to win:

  1. The current yield, which (in many cases) will clear the 1.6% I mentioned. Plus,
  2. The price appreciation that comes along with the dividend increase.

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Mortgage payments. Car payments. Cell-phone bills. Power bills. Water bills. Credit card bills.

Yuck. They’re the only downside to being retired!

These bills show up (or debit our accounts) every single month. That’s OK when we have a normal j-o-b that pays us every couple of weeks, or every month. But this regular bill gets really old when we retire.

Like you, I prefer to retire on dividends (and leave my nest egg alone). Problem is, most dividends are paid out every quarter, not every month.

So, dividend cash flow is (unfortunately) often out of sync with every-30-day expenses.

Some income investors build out complicated dividend calendars that get knocked out of whack whenever they ever have to sell certain stocks.… Read more

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Firms increasing their dividends in 2020, of all years, are sending a powerful “payout confidence” signal to Wall Street:

Our dividend is safe—so secure, in fact, that we’re hiking it. Watch our stock price follow.

The bigger the increase, the greater the level of confidence. In a minute, we’ll investigate five of these dividend buy signals.

S&P Dow Jones Indices’ Howard Silverblatt writes that there were 309 dividend increases during the third quarter, versus 102 declines—better than the 244 versus 639 “upside-down” split from Q2. (Though we’re still grading worse than this quarter last year, when 426 firms raised and only 94 cut.)… Read more

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As broke investors worry more and more about a stock market crash, billionaires are quietly loading up on their favorite dividend paying stocks. Investing for growth and income, these “country clubbers” know how to 4X their yields without taking on any additional risk.

Who would you rather invest with? Obviously, the rich guy or gal versus the hopeful retiree sweating out every stock tick.

Wealthy people collect assets that, over time, help them accumulate more and more wealth. Average investors, meanwhile, clutch to their stocks like they are lottery tickets. They buy shares and “hope” that they go up every minute of every day.… Read more

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“Brett, give me some bond funds with big yields. And it’d be great if their prices never went down!”

My money manager friend was chasing the holy grail of retirement income. He wanted safe payouts from bonds to balance his clients’ stock exposure.

“How about the Artisan High Income Investor Fund (ARTFX)?” I replied. “It pays a steady 6% or so. And it never goes down.”

Same S&P Yearly Return, Less Heartburn

“The only problem is that it never goes up, either. And that’s prevented me from recommending it to my Contrarian Income Report subscribers.”

Our CIR portfolio holds eight bond funds today (versus ten stocks and stock funds).… Read more

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Mortgage payments. Car payments. Cell-phone bills. Power bills. Water bills. Credit card bills.

What do they all have in common?

Nobody likes them, of course. But more importantly, they all arrive relentlessly month after month.

That’s fine when you have a normal job that pays you every couple of weeks or every month. But that regular bill routine becomes considerably more daunting once you hit retirement, when much of your regular income is coming from your portfolio of dividend paying stocks … which pay out every quarter, not every month.

Investors in turn often build complicated dividend calendars that get knocked out of whack whenever they ever have to cut back on certain stocks.… Read more

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Growth or yield? Why choose when we can have both.

There are 32 dividend hikes on the way that are going to set up their investors for a big 12 months ahead. How? Simple–these payout raises are going to provide fuel to their attached share prices. The 10%+ raises (and there will be double-digit increases) in particular are going to position their shareholders for safe 10% to 12% returns in the year ahead regardless of what the broader stock market does.

Ever wonder why the yield on your favorite dividend aristocrat always looks low even though the firm is regularly raising that payout?… Read more

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The S&P 500 snapped an eight-session winning streak on Tuesday, but U.S. stocks still have strong momentum heading into the first-quarter earnings season.

The index flirted with the 2,900 level this week, which is a price that we haven’t seen since last October. One big change since then is that average U.S. earnings showed 20%-plus year-over-year growth in the first three quarters of 2018 and now we’re staring at the first quarterly earnings decline in the S&P 500 in three years.

The quarterly reports we’ll see over the next few weeks will go a long way to determining if the recent momentum can continue.… Read more

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