Throughout the life of this blog I have talked about my desire to create multiple streams of income. While I have been trying to do more side legal work in addition to my day job and I have my prosper account up and running, I have yet to create a dividend based portfolio which is something I have wanted for a long time. I have never claimed to be an investing guru, or any kind of guru for that matter, but especially not an investing expert. My 401(k) is almost completely in low cost mutual funds and my speculation account isn’t doing that hot lol, and it is just that, speculation coupled with covered calls.
My Introduction to The Dividend Aristocrats
So I checked out a blog that I recently discovered Dividend Growth Investor. After searching all over his site, I found some interesting terms:
- Dividend Aristocrats – Dividend aristocrats are companies in the S&P 500 that have increased dividend payouts to shareholders every year for the last 25 years.
Dividend Growth Investor recently just highlighted 10 of those companies which distributed increasing dividends for 50 years!
Starting my Dividend Stock Choices
I could simply just purchase the many ETFs that try to track these companies, but that is not the point of this account. I wanted to choose individual stocks (unlike my 401(k)) and I wanted to invest rather just speculate (like my speculating account).
So, I decided if I was going to pick a handful of stocks for this special account I am going to pick them from the Dividend Aristocrats. I figured if a company was able to raise dividends for 25 years they are good start. As if I needed to remind anyone during the last 25 years (1985 till today) we have had a Savings and Loan issue, a dot com bust, housing and credit bust, and 5 different presidents.
Going right to the source I went Standard and Poors and found the following stocks to be on the 2010 list:
|ABT||Abbott Laboratories||Health Care|
|APD||Air Products & Chemicals||Materials|
|ADP||Automatic Data Proc||Information Technology|
|BCR||Bard (C.R.)||Health Care|
|BDX||Becton, Dickinson||Health Care|
|CTL||CenturyTel Inc||Telecommunication Services|
|CLX||Clorox Co||Consumer Staples|
|KO||Coca-Cola Co||Consumer Staples|
|FDO||Family Dollar Stores||Consumer Discretionary|
|TEG||Integrys Energy Group||Utilities|
|JNJ||Johnson & Johnson||Health Care|
|LEG||Leggett & Platt||Consumer Discretionary|
|LLY||Lilly (Eli)||Health Care|
|LOW||Lowe’s Cos||Consumer Discretionary|
|MCD||McDonald’s Corp||Consumer Discretionary|
|MHP||McGraw-Hill Companies||Consumer Discretionary|
|PEP||PepsiCo Inc||Consumer Staples|
|PG||Procter & Gamble||Consumer Staples|
|SWK||Stanley Works||Consumer Discretionary|
|SVU||Supervalu Inc||Consumer Staples|
|TGT||Target Corp||Consumer Discretionary|
|VFC||VF Corp||Consumer Discretionary|
|WMT||Wal-Mart Stores||Consumer Staples|
|WAG||Walgreen Co||Consumer Staples|
Now that I have it down to a list of 43 I can start to research each company and determine which 4 or 5 I should Dollar Cost Average into.
I know I will be looking at Cash Flow & a Low P/E but what other factors should I be looking for?