Dividends and A conservative, yield-focused strategy

The stock market is up this year which is good and President Trump wants to cut regulations which for many businesses is a good thing. It may not be great for the consumer, but for overall business world it should be good. In every market there are companies to invest in which should continue to do well and Ian Tam of Morningstar Research examined large US companies paying reasonable yields and showing steady earnings or companies you can buy and should do well over the next year. His criteria was:

market capitalization (greater than $30 billion)

expected dividend yield  – greater than 2%

consistency of historical earnings over a 5 year period – a low number is good

debt to equity ratios equal to or less than the median of the sector it belongs to

dividend payout less than 80%

Company                       Mkt Cap              Dividend         Earnings        Industry Rel     Trailing Div

($ Bil)                    Yield %            Varability       D/E Ratio         Payout Ratio

AT&T                           256.656                   4.7                        2.6                   0.7                      68.0

Reynolds American   87.794                  3.3                          3.3                  0.8                      76.2

Accenture                     78.884                  2.0                          1.6                 0.0                       42.3

CVS Health                   82.650                   2.5                          2.4                 0.9                      29.1

Unilever                       134.360                   2.9                          3.0                0.9                        67.5

Johnson & Johnson  332.476                  2.6                           2.8                0.6                        47.3

Proctor & Gamble      232.818                 2.9                           3.5                 0.4                       71.1

WPP Group                     31.241                  2.6                          2.0                0.9                         44.7

Infosys Tech                   34.604                2.5                         2.7                  0.0                         41.1

Novartis                          185.692               3.5                          6.0                  0.5                         57.5

The other companies on the list were Starbucks, American Electric Power, BHP Billiton, Emerson Electric and Raytheon

Linking to dividend paying stocks, all of them pay dividends which is good and should be paying for years to come. In your portfolio you should have these types of companies to pay you dividends and for the long term capital gains. The stocks typically have a range each year and there are buying opportunities for each, but the long term outlook always tend to be a buy and hold

There are more questions than answers, till the next time – to raising questions.

 

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