Warren Buffett has 19 dividend stocks with a 2.0% or better yield in his portfolio, but which are the best? I've used a systematic approach to find the seven best -- and rank them, from "worst" to best.
Warren Buffett's investment style is a culmination of value, growth, and quality.
He looks for:
- Great business (quality)
- Trading at fair or better prices (value)
- That will compound his money far into the future (growth)
This approach leads Buffet to invest primarily in dividend stocks. Dividend stocks make up around 92% of Buffett's portfolio.
His top four holdings have an average position weighted dividend yield of 3.2% and make up 63% of his portfolio. High quality dividend growth stocks are the cornerstone of Buffett's portfolio.
Attached you will find 7 of his best dividend bets you should consider for the next years. Each of the results is a high quality stock with room to grow in the future.
Here are the results...
Despite the almost constant chatter on whether the Federal Reserve raises rates this week, many top strategists on Wall Street are convinced the Fed holds off until at least December, and maybe until 2017.
While Fed Chair Janet Yellen and members of the Federal Open Market Committee may start to ramp up a more hawkish tone at the end of the year, any interest rate increases will be very patient and deliberate.
The 2016 S&P 500 Dividend Aristocrats list includes 51 companies that have increased dividends (not just remained the same) for 25 years straight. Keep in mind that just because they are on this list now doesn’t mean in the future they will be forced to reduce their dividend.
Today we screened the list for cheap stocks with a Buy rating. Six stocks from the index matched our criteria.
Here are the results...
It's no secret that dividend-yielding stocks are the cornerstones of a solid retirement portfolio. Usually, such stocks represent ownership in stalwart businesses that pay shareholders on a quarterly basis.
Those payments not only offer downside protection, but they can also compound returns over time. Still, one of the dangers of dividend investing is chasing after high yields.
Case in point: The 10 stocks listed below have the highest yields of all the companies in the S&P 500, but not all of them are worth your investing dollars. In many cases, there's a good reason such stocks have high yields -- because there's a lot of risk involved.
If you're a dividend investor, there's nothing more important than free cash flow (FCF).
This represents the amount of money a company was able to put in its pocket at the end of the year, minus capital expenditures.
It is from FCF that dividends are paid, and investors should generally aim for companies that use less than 85% of their FCF to pay dividends.
Attached you will find a couple of stocks with a low price multiple in relation to its free cash flow. Each of the listed stocks has a dividend yield over 4 percent, a market capitalization over 2 billion and a debt-to-equity ratio below 1.
These are the results...
What makes it so hard to understand what investors should do for the next 50 years is that we have an extremely hard time imagining possibilities that far into the future.
Look back at the differences between 1966 and today. Technology and societal trends are changing so fast that anyone transported from that time to today would barely comprehend the things we have done in this relatively short time.
For investors, though, this is where some of the greatest gains can be made, by buying and holding companies with rock-solid competitive advantages that will stand the test of time.
So we put the challenge of finding stocks that look to be great investments over the next 50 years. Here's what we find...
Despite the outsized gains by the bond proxy sectors this year, which include telecoms, utilities and real estate investment trusts (REITs), one of those sectors still trades cheap to the S&P 500.
While utilities trade at 17.3 times estimated 2016 earnings and REITs at 18.8, telecoms trade at a low 13.8 times, which is far below the S&P 500 at 16.6%.
In addition, the telecoms have been hit by waves of profit-taking, which have knocked them down into a range that looks inviting.
In an interesting note, RBC makes the case that while the bond proxy stocks are definitely at a premium, as a group they trade in line with the S&P 500.
While acknowledging that they may be more susceptible to rising rates, the firm also cites investor appetite for them when yields remain low, which they could for some time.
We screened for quality telecom stocks that pay solid and dependable dividends. These four look very attractive now.
Here are the results...
