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10 Best Dividend Stocks for the Market’s 10 Sectors

The following is an excerpt from 10 Best Dividend Stocks for the Market’s 10 Sectors.

I’ve been a big believer in piling money into the best dividend stocks, then staying there for a long time. Perhaps because the start of my career coincided with the nasty 2000-02 bear market, I’ve always taken the view that capital gains can be ephemeral. But a regular dividend represents realized profit I could hang my hat on.

Or so I thought.

I learned a nasty lesson back in 2008, and it’s one I’ll never forget. I was invested fairly heavily in the iShares Select Dividend ETF (DVY) and feeling smug about it. Sure, the market could take a tumble, but my high-dividend stocks would weather the storm better than most, right?

Wrong. During the 2008 meltdown, DVY actually lost more than the S&P 500 despite, in theory, being a “safe” dividend-focused fund.

So, what happened?

It came down to diversification, or rather the lack of it. DVY allocated to the highest-yielding dividend stocks that met its criteria … which meant it was massively overweighted to the financial sector. You can imagine how that worked out for me.

Today, we’re going to approach dividend investing a little differently, picking a solid dividend stock from each of the S&P 500’s 10 industrial sectors. And while 10 stocks isn’t what I’d consider a fully diversified portfolio, this will give you a good head start.

You could toss a dart at the stock page of the Wall Street Journal and have a good chance of hitting a very good dividend stock in the real estate sector. Real estate investment trusts (REITs) are some of the most reliable dividend payers out there, and many are on sale at the moment.

The inexorable rise of Amazon.com, Inc. (AMZN) has made investors rightly wary of the retail sector… and of the landlords that serve them. But not all real estate is at risk of being made irrelevant by Jeff Bezos.

As an example, consider Realty Income Corp (O), the “monthly dividend company.” Realty Income owns properties that, if not “Amazon-proof,” are at least “Amazon-resistant.” It tends to own pharmacies, gyms, movie theaters and other high-traffic properties.

Realty Income yields 4.5% and has raised its dividend for 78 consecutive quarters. That’s not too shabby.

To read the full article, see 10 Best Dividend Stocks for the Market’s 10 Sectors.

Disclaimer: This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice. This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities nor is it intended to be investment advice. You should speak to a financial advisor before attempting to implement any of the strategies discussed in this material. There is risk in any investment in traded securities, and all investment strategies discussed in this material have the possibility of loss. Past performance is no guarantee of future results. The author of the material or a related party will often have an interest in the securities discussed. Please see Full Disclaimer for a full disclaimer.

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10 Monthly Dividend Stocks to Pay the Bills

Earlier this month, I wrote “10 Monthly Dividend Stocks to Buy to Pay the Bills.” The following is an excerpt:

I like making money in the stock market. But I love dividends. You see, the problem with capital gains is that in order to actually enjoy them, you have to sell you shares. But the beauty of dividend stocks is that you get to enjoy the fruits of your investment without having to actually sell anything. Think of it as milking a cow rather than killing it for meat. Which sounds like the better long-term plan to you?

But even most dividend stocks are imperfect, as dividends are usually paid quarterly. This problem with this is that most of our expenses tend to be monthly, so when you depend on dividends to pay your bills, there is always something of a disconnect between you income and your expenses. This can make budgeting something of a challenge.

Thankfully, monthly dividend stocks do exist, and there are actually quite a few of them out there.

Today, we’re going to look at 10 solid monthly dividend stocks to buy. Many of these names are popular among income investors, but others will almost definitely be new to you. Importantly, all have a long history of taking care of their shareholders with consistent monthly dividend checks.

Realty Income (O)
Dividend Yield: 4.4%
Type: Commercial REIT

Realty Income Corp (O) styles itself as “the Monthly Dividend Company,” and frankly, this conservative retail real estate investment trust (REIT) deserves the title of king of the monthly dividend stocks. Realty Income has paid its investors like clockwork for 559 consecutive months and raised its dividend for 77 consecutive quarters. And O has given no indication of slowing down.

Realty Income has raised its dividend at a 4.7% annual clip for over three decades running.

A stocks is always going to be considered more risky than a bond, but Realty Income is about as close to a bond as you can realistically get in the stock market. Its cash flows are backed by long-term leases to high-quality tenants. Its properties are generally high-traffic retail sites that are mostly recession proof and “Amazon.com proof.” Think of your local convenience store or pharmacy. Chances are decent that Realty Income owns it.

In the interests of full disclosure, I own some shares of Realty Income that I bought nearly a decade ago and that I never intend to sell. I’ve been reinvesting my dividends, slowly building up my share count. One of these days, I’ll flip the switch and start taking those dividends in cash. But for now, I’m enjoying watching the number of shares that I own increase with every passing month.

You can read the read the rest of the article here.

Disclaimer: This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice. This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities nor is it intended to be investment advice. You should speak to a financial advisor before attempting to implement any of the strategies discussed in this material. There is risk in any investment in traded securities, and all investment strategies discussed in this material have the possibility of loss. Past performance is no guarantee of future results. The author of the material or a related party will often have an interest in the securities discussed. Please see Full Disclaimer for a full disclaimer.

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Realty Income: Let the Monthly Dividend Company Pay Your Bills in 2017

The following is an excerpt from a piece I wrote for InvestorPlace. You can read the full article here.

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I’ve always been a big believer in taking a total return approach to investing, focusing on both capital gains and income. And with the capital gains looking a little more iffy than usual at current stock prices, current income in the form of dividends is more important than ever.

So with all of that said, let me introduce you to one of my very favorite dividend workhorses, conservative retail REIT Realty Income (O). Realty Income owns a portfolio of over 4,700 properties scattered across 49 states and Puerto Rico. And while the property portfolio is extremely diversified, spanning 247 tenants in 47 distinct industries, the properties all have one thing in common: a triple-net lease.

Under a triple-net lease arrangement, the tenant rather than the landlord pays all taxes, maintenance and insurance. The landlord’s responsibility really is limited to cashing the rent checks and occasionally finding a new tenant or negotiating a new lease. Not bad work if you can get it!

Realty Income is about as close to a bond as you can get in the stock market. Its triple-net leases give the cash flows excellent stability and predictability, as does the quality of its portfolio and tenant base. Realty Income tends to focus on standalone retail properties in high-foot-traffic areas. Your neighborhood Walgreens or CVS pharmacy would be a fine example.

But while the dividend may be “bond-like” in its stability, O stock has done an incredible job of raising it over the years.

You can read the full article here.

Disclaimer: This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice. This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities nor is it intended to be investment advice. You should speak to a financial advisor before attempting to implement any of the strategies discussed in this material. There is risk in any investment in traded securities, and all investment strategies discussed in this material have the possibility of loss. Past performance is no guarantee of future results. The author of the material or a related party will often have an interest in the securities discussed. Please see Full Disclaimer for a full disclaimer.

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The 7 Best Monthly Dividend Stocks for 2017

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The following is an excerpt of a piece I wrote for InvestorPlace:

The second half of 2016 was not kind to income investors. As bond yields rose, the prices of virtually everything paying an income stream got slammed. Some of my favorite dividend stocks, REITs and closed-end funds fell by 20% or more… at a time when the broader stock market was rallying.

That’s frustrating, to say the least. But if you’re investing for retirement, short-term price moves really don’t matter all that much. Earning a regular stream of income is far more critical.

But even here, your dividend stocks are generally misaligned with your actual cash needs. Most dividend stocks pay quarterly, and most bonds pay semi-annually. Yet your regular expenses — everything from your mortgage to the mobile phone bill — tend to be monthly.

This is where monthly dividend stocks come in handy. Monthly dividend stocks align your income with your expenses, making it a lot easier to plan out your life. And after the general bloodletting we’ve had among defensive, dividend-paying names over the past few months, some of my favorite monthly dividend stocks are finally reasonably priced again. Most were prohibitively expensive as recently as late summer.

Some would dismiss a monthly payout as a gimmick designed to impress mom and pop investors, but I would disagree completely. To me, a monthly dividend is a sign of a management team that takes its investors seriously and makes a real effort to do what is best for them.

This is an eclectic list, covering everything from traditional brick-and-mortar REITs to leveraged closed-end bond funds. But all have one thing in common: They pay a reliable monthly dividend.

Dividend Stocks to Buy: Realty Income (O)

You can’t have a list of monthly dividend stocks without “the Monthly Dividend Company” itself, conservative retail REIT Realty Income Corp (O). Realty Income has paid its dividend like clockwork for 556 consecutive months and counting. Importantly, it’s raised that dividend for 76 consecutive quarters and has shown no indication of slowing down. Since 1994, the company has raised its dividend at a 4.6% annual clip.

Realty Income is not a bond. It’s obviously a stock. But in terms of stability and safety, it’s about as close to a bond as you can realistically get in the stock market. The REIT owns a portfolio high-traffic retail properties that are mostly recession proof, and importantly, internet proof.

With Amazon.com (AMZN) and its peers quickly making physical stores irrelevant, you have to worry about the long-term viability of a lot of properties. But a typical Realty Income property would be your local pharmacy or convenience store, the sorts of properties that e-commerce won’t replace any time soon. And its base of over 4,700 properties is spread across 247 tenants in 49 states and Puerto Rico, with its largest tenant accounting for just 7.3% of total rent.

At current prices, Realty Income yields about 4.4%, which is nearly 2% higher than the yield on the 10-year Treasury. But unlike that Treasury coupon, which will never rise, Realty Income’s dividend will likely continue to rise every year.

To read the remaining six picks, please see The 7 Best Monthly Dividend Stocks for 2017

Disclosure: As of this writing, I was long O.

Disclaimer: This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice. This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities nor is it intended to be investment advice. You should speak to a financial advisor before attempting to implement any of the strategies discussed in this material. There is risk in any investment in traded securities, and all investment strategies discussed in this material have the possibility of loss. Past performance is no guarantee of future results. The author of the material or a related party will often have an interest in the securities discussed. Please see Full Disclaimer for a full disclaimer.

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7 Stingy Stocks That Should Raise Their Dividends

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The following is an excerpt from 7 Dividend Stocks That Owe You More Money.

Nothing is more frustrating to me than stingy dividend stocks.

And this is coming from me, a man with a well-deserved reputation as a cheapskate. (I prefer to think of myself as “frugal,” but my friends and family have other choice words for me.) Yet as miserly as I am, I know when I’m beaten. I once had a friend that was tired of paying for lawn service. So he bought a baby goat at a flea market, had the goat eat his grass, then returned to the same flea market and sold the now fattened goat for a profit.

But while I appreciate extreme frugality, it’s not something I tolerate in dividend stocks. I expect my investments to be lavishly generous… which means paying respectable dividends and raising them over time.

Alas, we have a lot of Ebenezer Scrooges out there in corporate America that either don’t pay dividends at all or don’t pay nearly enough of them. Realistically, not every company can be a dividend-paying powerhouse. Cyclical companies like General Motors Company (GM) or Ford Motor Company (F) have wildly erratic businesses and need to keep a little extra cash on hand for the lean years. (Of course, even then, weak share prices have made the pair of them look generous via nearly 5% yields.)

But companies with consistent revenue streams have no excuse for being tight fisted with their investors.

You can think of this as an exercise in naming and shaming. These seven miserly dividend stocks need to open their wallets a little wider and share the wealth with their long-suffering shareholders.

Dividend Stocks That Owe You More Money: Visa (V)

At the top of the list is global payments leader Visa Inc (V).

Visa sits at the intersection of two of the most powerful trends in the economy today: the rise of the cashless society and the rise of the emerging market consumer. With every passing day, more people around the world are swiping their credit and debit cards in more places. And as the owner of the largest global payments network, Visa sits at the middle of this, like a toll booth operator.

Yet Visa has thus far failed to share its success with its shareholders. The dividend yield on V shares is a pitiful 0.7%. It’s not for lack of resources. Visa’s dividend payout ratio is an extremely low 23%.

Why the stinginess? I don’t know. Capital expenditures are a pittance. Visa could double its dividend tomorrow and still have a reasonable cash cushion.

If you own this stock, Visa owes you more money.

To read the rest of the article, please see 7 Dividend Stocks That Owe You More Money.

Disclaimer: This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice. This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities nor is it intended to be investment advice. You should speak to a financial advisor before attempting to implement any of the strategies discussed in this material. There is risk in any investment in traded securities, and all investment strategies discussed in this material have the possibility of loss. Past performance is no guarantee of future results. The author of the material or a related party will often have an interest in the securities discussed. Please see Full Disclaimer for a full disclaimer.

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