Monday, December 12, 2011

How to invest like a Dividend Billionaire

Some of America’s richest families, own stakes in one of the oldest enterprises. The Rockefellers, Waltons, DuPonts, Johnson’s, Mellon’s control fortunes in the billions of dollars, which are spread amongst descendents of the people that accumulated the fortunes. These families have had generations of trust fund babies, which are essentially people who are expected to be retired for the rest of their lives. One common characteristic between all of these families, is that their wealth is stores in companies, which tend to pay consistently increasing dividends. The Waltons have Wal-Mart Stores (WMT), the Rockefeller's have Exxon-Mobil (XOM), the Johnsons have Johnson & Johnson (JNJ) while the Stryker Family has Stryker (SYK). The rising dividend payments generated by the companies these families own, generate the sufficient stream of income, to pay for the monthly expenses of generations of descendants. These families have essentially managed to live off dividends for decades.

Investors, who are interested in generating an income stream off their capital, that would last for several generations, should look no further than dividend growth stocks. As far as the Stryker Family is concerned, their core holding announced an 18% increase in dividend income over the past week.

Stryker Corporation (SYK), together with its subsidiaries, operates as a medical technology company worldwide. The company operates in three segments: Reconstructive, MedSurg, and Neurotechnology and Spine. The company raised its quarterly dividend by 18% to 21.25 cents/share. This marked the 19th consecutive annual dividend increase for this dividend achiever. Yield: 1.80%

Other companies, which rewarded their shareholders with dividend hikes include:

Universal Health Realty Income Trust (UHT) operates as a real estate investment trust (REIT) in the United States. The company invests in health care and human service related facilities, including acute care hospitals, behavioral healthcare facilities, rehabilitation hospitals, sub-acute facilities, surgery centers, childcare centers, and medical office buildings. The company raised its quarterly dividend by 0.80% to 61 cents/share. This marked the 23th consecutive annual dividend increase for this dividend achiever. Yield: 6.50% (analysis)

The Valspar Corporation (VAL) manufactures and distributes coatings, paints, and related products worldwide. The company raised its quarterly dividend by 11.10% to 20 cents/share. This marked the 34th consecutive annual dividend increase for this dividend champion. Yield: 2.20%

Ameriprise Financial, Inc. (AMP), through its subsidiaries, provides financial planning, products, and services primarily in the United States. The company raised its quarterly dividend by 21.70% to 28 cents/share. This marked the 8th consecutive annual dividend increase for this dividend stock. Yield: 2.30%

Enbridge Inc. (ENB) engages in the transportation and distribution of crude oil and natural gas primarily in Canada and the United States. The company raised its quarterly dividend by 15% to 28.25 CAD cents/share. Enbridge is an international dividend achiever, which has raised dividends for 17 years in a row. Yield: 3.10%

Edison International (EIX), through its subsidiaries, engages in the supply of electric energy. Its distribution system consists of approximately 60,000 circuit miles of overhead lines, 43,500 circuit miles of underground lines, and 700 distribution substations located in California. The company raised its quarterly dividend by 1.60% to 32.50 cents/share. This marked the ninth consecutive annual dividend increase for Edison International. Edison International has paid dividends for over 100 years. Yield: 3.30%

National Health Investors, Inc. (NHI), a real estate investment trust (REIT), invests in health care properties, primarily in the long-term care industry in the United States. . The company raised its quarterly dividend by 5.70% to 65 cents/share. This marked the 11th consecutive annual dividend increase for this dividend achiever. Yield: 6.10%

C.H. Robinson Worldwide, Inc. (CHRW), a third-party logistics company, provides multimodal freight transportation services and logistics solutions to companies in various industries worldwide. The company raised its quarterly dividend by 13.80% to 33 cents/share. This marked the 14th consecutive annual dividend increase for this dividend achiever. Yield: 2%

Erie Indemnity Company (ERIE) provides sales, underwriting, and policy issuance services to the policyholders of Erie Insurance Exchange in the United States. The company raised its quarterly dividend by 7.30% to 55.25 cents/share. This marked the 22nd consecutive annual dividend increase for this dividend achiever. Yield: 2.90%

AXIS Capital Holdings Limited (AXS), through its subsidiaries, provides various insurance and reinsurance products to insurers and reinsurers worldwide. The company raised its quarterly dividend by 4.30% to 24 cents/share. This marked the tenth consecutive annual dividend increase for AXIS. Yield: 3.10%

Roper Industries, Inc. (ROP) designs, manufactures, and distributes medical and scientific imaging products and software, energy systems and controls, and industrial technology products and radio frequency (RF) products and services. The company raised its quarterly dividend by 25% to 13.75 cents/share. This marked the 19th consecutive annual dividend increase for this dividend achiever. Yield: 0.70%

J&J Snack Foods Corp. (JJSF) manufactures nutritional snack foods; and distributes frozen beverages to the food service and retail supermarket industries in the United States, Mexico, and Canada. The company raised its quarterly dividend by 10.60% to 13 cents/share. This marked the 8th consecutive annual dividend increase for this dividend stock. Yield: 1%

Full Disclosure: Long UHT


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2 comments:

  1. EIX has a pretty low dividend for a utility. Utilities has pretty slow growth, so I think they should have higher yields. Still, I may look into it.

    ReplyDelete
  2. Big fan. Really enjoy your articles and your strategy.

    One thing I don't understand is why you don't maximize the buy on dips principle.
    When one stock is on a high, ex JNJ trading close to or at 70, why wouldn't you sell it and invest it in another stock on a dip. If they're both solid stocks that fit your criteria (and have relatively comparable dividends), then you would be reeling in the same dividend profits as well as profits from the change in share price.

    You could keep doing this, adding a decent amount to your profits.

    The only downsides I can see to this are commission fees, taxes (potentially, depends on the situations), and time/effort.

    Thanks,
    John

    ReplyDelete

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