In September 2011, I did some in-depth research to find long term sustainable dividend stocks and have been doing updates on this Ultimate Sustainable dividend portfolio since then in the attempt to show how well such a portfolio can perform over the long term. I would personally say that things have been going very well and will certainly continue to evolve. I do have a few more things planned which I will discuss in the near future.
Each year, the Aristocrats lists are updated. The dividend aristocrats are a group of US companies showing 25 consecutive years of dividend increases. When you think about it, only the strongest companies can make this list. In order to be part of this elite group, a company must be in a good position to increase both their sales and earnings year after year on a very consistent basis. If one fails to do so, it will quickly become impossible to raise its dividend. Canadians also have their dividend aristocrats, but the criteria used for selection is fairly different.
You’d be hard pressed to find any passionate investor who doesn’t enjoy reading the words of wisdom contained in Warren Buffett’s annual letter to Berkshire shareholders. Here are some of the investing keys I took away from his recent letter: “Over the stock market cycle between yearends 2007 and 2013, we overperformed the S&P. Through full cycles in future years, we expect to do that again. If we fail to do so, we will not have earned our pay. After all, you could always own an index fund and be assured of S&P results.” Read more at http://www.myownadvisor.ca/investing-keys-oracles-latest-letter/#7DT6EeGUsvzIsdZp.99
I review dividend increases every week. I review all of them, but focus on those that have raised at least for a decade, and have at least a minimum yield, before I take the time to research them any further. The following companies that managed to raise dividends in the past week met the minimum yield and length of consecutive increases: Air Products and Chemicals, Inc. (APD) provides atmospheric gases, process and specialty gases, performance materials, equipment, and services worldwide. The company operates through four segments: Merchant Gases, Tonnage Gases, Electronics and Performance Materials, and Equipment and Energy. Last week, the Board of directors raised quarterly dividends by 8.50% to 77 cents/share. This marked the 32nd consecutive annual dividend increase for this dividend champion. Over the past decade, Air Products and Chemicals has managed to increase dividends by 12.20%/year.
Last week, Dan Mac from Dividend Growth Stock Investing sent me an email to participate in a “group post” where he compiles answers from many bloggers. He asked us a couple of questions (what is your best dividend stock? and what is your best investment advice?). I gladly participated and shared my answers. When both posts are live, I’ll link to them. In the meantime, I wanted to go deeper into the answer I gave him with regards to the #1 investment advice. He actually asked for advice for beginner investors but I think mine would apply to all investors. But before I share my advice with you, let’s rewind several years ago when I started investing. How I Started Investing
Wow… it has been a long month, right? I left for my first “couple vacation” (read; without kids!) in the last ten years! We went to Hawaii to take some real time off, do all kinds of crazy things (like jumping into a waterfall and diving into a crater) and get some sun (I live in the cold winterland: Canada!). Now that I’m back, snow and ice are still around and the stock market seems to be relatively stuck in ice as well.
When most investors watch share prices fluctuate on a screen, it is easy for them to forget there are real businesses behind those share quotes, and not lottery tickets. It is also very easy to forget that price is what you pay, while value is what you get. Just because everyone is willing to pay only $56 for a share of Target, that doesn’t mean that the value of the business in a going private transaction is $56. In reality, it could be much higher than that.
Last weekend, I did what I always do at this time of the year. No, not starting to work on my taxes (that is something I will postpone a bit longer). I took the time to go through Warren Buffett’s annual letter. Every year, I always learn a lot going through it and while there is some self-promotion, it’s also filled with good stories about what has worked, what hasn’t, why he bought certain stocks/businesses as well as a unique perspective.
The dividend aristocrats list is a very important list for me. It’s my initial starting point when I filter companies for my core portfolio. The list is built based on the companies’ track record which demonstrate a certain management protocol from the board of directors and the companies’ management teams.
The US Dividend Aristocrats is the best list for filtering dividend stocks I can imagine. This should be your starting point to create your core portfolio. Why should it be part of your core portfolio? It’s simple, the companies in the list must have increased their dividends every year for 25 years.