The Top Regular Dividend Stocks for Long-Term Investors
Investing in stocks that consistently pay dividends is a popular strategy among long-term investors. This strategy not only provides a steady stream of income but also supports capital preservation. In this article, we will explore some of the top dividend stocks, highlight their yields, and provide insights from popular portfolios and investment resources.
Charles Schwab Dividend ETF (SCHD)
The Charles Schwab Dividend ETF (SCHD) is a well-regarded investment option for those seeking a diversified portfolio of high-dividend-paying stocks. This ETF is composed of the top 100 dividend payers that also exhibit strong financial health, including high Return On Equity (ROE), high profitability, and a high Cash Flow to Total Debt ratio. Additionally, all companies within the ETF have maintained a consistent dividend payment for at least the past 10 years.
To explore the full portfolio of the Charles Schwab Dividend ETF, simply perform a search for “SCHD ETF” and click on the Schwab link that appears. You can download the complete portfolio directly from the Schwab website.
The Dividend Aristocrats
The Dividend Aristocrats is a prestigious group of companies that have increased their dividends for at least 25 consecutive years. These companies are selected from the SP 500 index and represent the strongest and most reliable dividend growers in the market. You can check their current yields on platforms such as Yahoo Finance or Google Finance.
High-Performing Dividend Stocks from Investment Books
In my investment books, including the American High Dividend Handbook, Canadian High Dividend Handbook, and the New York Stock Exchange's 106 Best High Dividend Stocks, I provide in-depth analyses of top dividend stocks. Each book features a chapter dedicated to sorting stocks by their dividend yield percentages, from highest to lowest. In addition, I calculate a "strength score" for each stock to ensure that high yield percentages do not mask underlying financial weaknesses.
For instance, in the American High Dividend Handbook, Dorian LPG Ltd. stood out with a dividend yield of 31.70%, the highest among 286 listed stocks. The highest strength score I have calculated was 78, while the lowest was 4. I typically avoid stocks scoring under 50.
The book further qualifies only stocks with dividend yields greater than 3.5% to be listed. This stringent criterion ensures that the selected stocks are capable of withstanding market volatility and providing consistent returns. By investing in a portfolio of 20 carefully selected stocks with equal distribution, an investor can achieve an average annual dividend yield return of 6%. Additionally, this diversified approach can result in a total value growth of about 12% in most years, effectively maintaining dividend income ahead of inflation.
Conclusion
Investing in regular dividend stocks is an excellent way to generate passive income and preserve capital. By leveraging resources such as the Charles Schwab Dividend ETF, the Dividend Aristocrats, and high-performance dividend stocks from reputable investment books, investors can create a robust and diversified portfolio. This not only provides a steady stream of income but also helps maintain the purchasing power of the dividends in the face of inflation.
Remember, thorough research and diversification are key to building a successful dividend income portfolio. Always consult financial advisors and conduct thorough due diligence before making any investment decisions.