I’m all in on dividends. I’m not alone. On the contrary, I keep very good company in my commitment. You’ll find that nine of Berkshire Hathaway’s (NYSE: BRK.b) top-10 stock holdings pay dividends. I’m sure coincidence is not the reason Warren Buffett is drawn to dividend-paying stocks. The data are the reason. The data point to superior wealth accumulation with dividend-paying stocks. But as with everything in life, selection matters. If you’re going to invest for dividends, be sure to include one specific dividend payer above all – the dividend grower. Again, I keep very good company. The majority of Berkshire’s dividend stocks are dividend growers. The data are the reason yet again. Ned Davis Research analyzed S&P 500 stocks covering the years 1973 through 2021. The companies were divided into two groups – dividend payers and dividend non-payers. The “dividend payers were then segregated into three sub-groups based: dividend growers (and initiators), no-change dividend payers, and dividend cutters and eliminators. Ned Davis Research then compared the wealth outcomes from the different groups. The outcomes are contrasting and enlightening. The dividend cutters performed worst. A $100 invested in dividend cutters at the start of 1973 had shrunk to $80 by the end of 2021. The companies would have better served their investors by never initiating a dividend than to have initiated a dividend and then cut it. Indeed, $100 invested in non-payers grew to $989 over the 48 years. It gets better when dividends are introduced. The $100 invested in companies that paid dividends and never changed the payment generated $2,854 of wealth. The winner by far, though, were the companies that initiated a dividend and the companies that grew their dividend over time. The $100 invested in the dividend initiators and growers produced $14,405 in wealth by the end of 2021.  Source: Ned Davis Research
Wealth with reduced price volatility is another dividend-stock advantage. The dividend initiators and growers led the charge again. They produced the highest returns while displaying the lowest price volatility. 
Source: Ned Davis Research When we delve into the subject, we find that the dividends are an effect, not a cause. Consistent dividend growth is the result of coalescing fundamentals. Consistent dividend growth is underpinned by a strong balance sheet and exceptional entrepreneurial instincts. The former enables the latter to profitably grow the business. Profit growth, in turn, leads to dividend growth. I think we have entered a golden age of dividend growth. Corporate cash accounts have doubled over the past 15 years. Cash has never accounted for such a large percentage of assets. S&P 500 companies today hold $2.7 trillion of cash. With stock prices down and dividend yields up, now is a splendid time to consider a dividend-growth strategy. And if you would like to get in the dividend-growth game like the master, here are my top-five Buffett dividend-growth stocks (though not necessarily a Berkshire top-10 holding) to get you rolling: - Apple (NASDAQ: AAPL)
- Visa (NYSE: V)
- Chevron (NYSE: CVX)
- Celanese Corp. (NYSE: CE)
- The Kroger Co. (NYSE: KR)
Secure Income for Life – Live Masterclass Event I’m hosting a LIVE webinar with Ian Wyatt. It’s called… Income for Life Masterclass: Claim $19,815 payouts from America’s Most Profitable Stocks This LIVE summit is 100% focused on helping you crush inflation. And you can do it by earning safe and consistent income every month. Simply join me to discover: - The guaranteed 20% yield from a Kansas ranch
- 7 Millionaire income streams – copy these to build your wealth
- How to collect 6.9% income with a CPI Savings Account
- 1-day Supercharged Payouts yielding 28%... 39%... and even 45%
- How to collect 22.3% real estate rent checks – without REITs
And that’s just the start. Just click here to grab your spot (it’s FREE). Good Fortunes, Stephen Mauzy
He's Giving Away His Ultimate Dividend Package FOR FREE!
Marc Lichtenfeld, Author of Get Rich with Dividends, is giving away his Ultimate Dividend Package, Including Details on His #1 Dividend Stock... the Safest 8% Dividend in the World... the Top Three "Extreme Dividend" Stocks... and Much, Much More.
For Free.
Sponsor Advertisement
Top Investment Ideas Goldman Sachs Top 3 Energy Stocks Energy remains one of the hottest sectors in the market right now, with Bloomberg recently reporting that “energy stocks will be hot again in 2023”. Some of Wall Street's top analysts are saying investors could make money hand over fist this year with energy stocks. That's due to a lack of exploration for new oil fields over recent years leading to tight markets. Warren Buffett's Top 5 for 2023 Since taking the reins of Berkshire Hathaway decades ago, Buffett has nearly doubled the average annual total return of the broad-based S&P 500, including dividends (20.1% versus 10.5%). And 2022 was no different. While the S&P 500 got slammed 20% – Berkshire Hathaway’s stock rose 4%. That’s why it’s good to know what the Oracle of Omaha will do in 2023. According to 13F filings, his top 5 plays are Apple (AAPL), Chevron (CVX), Occidental Petroleum (OXY), Taiwan Semiconductor (TSM) and his own company too: Berkshire Hathaway. The Next Elon Musk Trade: Join me to dig into Elon’s acquisition of Twitter… what the deal means for TSLA stock… and discover why most folks are missing the biggest trade for 2023. Plus, you’ll get details on my #1 hidden stock to BUY NOW. Go here for complete access. Buffett Reveals Next Generation Power Plant Everyone understands that, eventually, fossil fuels will be replaced by cleaner energy sources. So does Warren Buffett. That's why he – together with Bill Gates – want to replace polluting power plants with small, next generation power plants that can power a small city and up to 500,000 homes. How Buffett Generates a 70% Yield The key to building wealth is twofold: time and dividend-paying stocks. Look at Warren Buffett and Coca-Cola, which he bought in 1987 and 1988. Coca-Cola increased its dividend annually over the subsequent years by an average of 6% annually. Coca-Cola’s annual dividend generates a 70% yield on Berkshire’s cost basis. Coca-Cola’s share price today is 23 times that cost basis. And what if Buffett had reinvested all those Coca-Cola dividends into additional Coca-Cola shares (and did so in a tax-exempt account)? His $1 billion investment would be worth $48.8 billion! | 
Post a Comment
Post a Comment