The Best Stocks for No-Doubt Dividends

The following is an excerpt from The 10 Best Stocks to Invest In for No-Doubt Dividends, originally published on Kiplinger’s.

The legendary George Soros would reportedly reshuffle his portfolio whenever he would get back spasms.

Whether it was his subconscious mind’s way of telling him he needed to make portfolio changes… or simply ridiculous superstition… Soros would reverse his speculative bets whenever his back would flare up on him. And frankly, given the man’s track record, who are we to question his reasons?

Well, I don’t claim to have Soros’ intuition, though I will point out that I had major back spasms in late January, shortly before the market peaked and started a nasty correction.

I’m certain this was due far less to premonition and far more to me being over 40 yet trying to roughhouse with my kids like I’m still in my 20s. But either way, I did end up taking a little risk off the table.

I did not, however, sell my most reliable dividend payers. Stocks rise, and stocks fall. But a reliable dividend payer will continue to deliver the goods through good markets and bad, dropping cash into your pocket with every passing quarter.

Today, we’re going to look at 10 companies you can depend on to consistently pay and raise their dividends through bull and bear markets alike.

Warren Buffett has said on more than a few occasions that you should only buy stocks you’d be perfectly happy to hold if the market shut down for 10 years. These are those kinds of stocks. If the market were to close tomorrow, you’d continue to collect the dividend indefinitely.

Not all of these stocks are exceptionally high yielding. In fact, a high yield is often (though certainly not always) a sign of trouble. But most will generally pay a yield that, at the very least, is competitive with what you’d find in the bond market and have long histories of raising their dividends over time. These are stocks you can credibly stake your retirement on.

Enterprise Products Partners (EPD)

I’ll start with one of my very favorite long-term holdings, blue-chip pipeline operator Enterprise Products Partners (EPD).

It might seem a little odd to include an oil and gas MLP in a list of “no doubt” dividend payers given some of the turmoil the industry has faced in recent years. Starting in 2015, some of the largest and best known pipeline operators – including Kinder Morgan (KMI), the granddaddy of them all – had to slash their distributions due to a lousy energy market and tightening credit conditions.

As a Texan, I feel I have license to poke fun of my own kind. And many of the pipeline operators (virtually all of which are based in Texas) really lived up to the reputation of Texas oilmen as gun-slinging risk takers. They borrowed far too heavily to aggressively boost their distributions and allowed their operations to become too heavily impacted by the price of crude oil.

Well, let me emphasize that Enterprise Products is not one of those companies. In an industry dominated by cowboys, EPD is a pillar of prudence and stability. Rather than try to dazzle investors with unsustainably high distribution growth, EPD chose to play it cool and raise its distribution 5% – 6% per year over the past decade. And unlike most of its peers, the stability of its distribution never came under serious question.

At current prices, EPD yields about 6.6%, which is exceptionally high for this stock. I also don’t expect those yields to be on offer for long, as value investors seem to be swooping in after a rough first quarter.

I happen to be one of those value investors; I’ve been buying the dips throughout 2018.

Disclosures: Long EPD and KMI

To read the remainder of the article, please see The 10 Best Stocks to Invest In for No-Doubt Dividends