Bookmark and Share

13 Dividend Income Stocks On Which Dividend Re-Investing Works (Value At Deep Discounts)

My personal portfolio goal is to create an income stream from dividends paid out by low risk, financially strong (high-quality) companies. Reinvesting your portfolio income is also an essential part for your financial freedom.

Reinvesting your dividends received from high-quality dividend growth stocks is a great, relatively conservative and proven way to build wealth over the long term.

This is especially true and appropriate for investors in the accumulation phase that are planning for future retirement. Accumulating additional shares of dividend growth stocks can, and will, provide an increasing and eventually larger stream of income available at retirement when income is needed most.

Attached you can find a list of stocks that might be interesting for long-term investors who like to reinvest their dividends in their portfolio while looking at raising dividends.

My main focus was on valuation. If you buy a stock at a moderate valuation, your initial yield should help you to get a solid starting yield.

Every stock on the attached list has a dividend yield of more than 3 percent. Debt-to-equity ratio is under 1, EPS growth for the next five years over 5% and the forward P/E under 15

As a result, 13 stocks remained on my screen. Some of them might also be interesting. It's a first step for further research but good to find value stocks with a decent income as inflation hedge.

Here are 13 top stocks for re-investing...

The Safest UK Dividend Stocks With Yields Over 4%

If you like to diversify your portfolio, you should look at stocks abroad. The United Kingdom is a great domicile for income orientated investors.

I've often written about foreign high yielding dividend stocks. But you must keep an eye of the additional currency risk of your investment.

Attached you can find a visual list of more or less safe high yielding stocks from the FTSE 100. It's in my view a great overview.

Here are the safest dividend stocks from the UK...

38 Dividend Growth Utilities With A Solid Finance Basis Or Earnings Growth

If there is one thing every investor can appreciate, it is a growing stream of reliable dividends. With the Federal Reserve aiming to raise rates in December, the rate sensitive stocks have seen some price declines.

One of those rate sensitive sectors is the utility sector. To help investors find some of the best companies in the sector, I began researching those utility stocks with at least 5 straight years of dividend increases. 54 companies are part of the results. That's a huge number which I want to reduce by implementing higher restrictions. More about this method can be read below.

Some investors like to build their dividend growth portfolio with very different strategies. One trick that I have found can help investors stay on track is to mentally consider the costs they will need to pay each month of their life and to set a goal for covering those costs with dividend income.

There is a beautiful irony in being able to cover the costs an investor faces in their life with a dividend check from the same company that is selling them a product. When it comes to the utility companies, it makes sense to have a more diversified portfolio rather than simply owning the utility that covers the investor's primary residence. 

The simple geographic risk of a natural disaster impacting the company and the investor's life at the same time makes it ideal to use a portfolio with at least a few different utility companies, even when the investor wants to use a utility dividend check to pay for their cost.

Utilities are mostly not diversified but you can do it on your own by investing smaller amounts into several sub-industries.

I've created two charts from my dividend growth utility database. The first table lists all utilities with a debt-to-equity ratio below one. I think its also important to have a look at financial ratios, especially when rates go up in the near future.

The second chart gives an overview of dividend growth utilities with a predicted 5% earnings growth for the next five years. It's a more bullish view on future earnings.

Here are the results…

The Cheapest Stocks On Deutsche Bank’s List Of The 30 S&P 500 Constituents

Attached you can find a great list from Deutsche Bank. It's a very detailed list with P/E's, EPS growth, yield and buyback yield.

All of the qualifying companies have a market capitalization > $10 billion, trade at a 2015 P/E of less than 22 and are expected to report positive earnings growth this year.

Also, Deutsche Bank’s equity research team has calculated a Net Buyback Yield for each of its 30 stock picks (trailing 12-month buyback expenditures less option exercise proceeds and less stock option expense / Market Cap).

The cheapest stocks on Deutsche Bank’s list of the 30 S&P 500 stocks to buy are Bank of America Corp (2015 P/E of 12.6), JPMorgan Chase & Co (11.3), SunTrust Banks Inc (12.3), Ameriprise Financial Inc (12.4), Mylan Inc (11.9), American Airlines Group Inc (4.7), United Continental Holdings Inc (4.9) and Exelon Corp (11.3).

My top picks are...

Five Dividend-Payers That Could Turn $10,000 Into $5 Million In 65 Years

You may have read some articles about making million by investing into stocks. This blog don't promise you a quick return. I will also not show you how you make a thousand dollar trade.

The core thoughts in this blog are value creation by long-term investing. If you put money for a long period of time into a stock, you will see that your investment is growing.

Consider this nifty fact to keep you focused on the long term: $10,000 invested at birth and compounded 10% annually turns into more than $5 million by age 65.

As you can see, a $10,000 investment can easily turn into a fortune if it is left to compound at a reasonable rate of return over the long term. For these calculations, we assumed a 10% average annual rate of return over the long term, which is less than the amount actually achieved by the market as a whole since 1926. 

Below are five picks that could help you to boost your portfolio return. To qualify for this list, the company must have a long history of dividend increases. We also took into account the sustainability of those dividends and the amount of yield it was providing.

We kept total return in mind, looking for companies with excellent earnings and dividend growth rates, as well as sustainable business models. Since investment amounts are likely to be small to start, we limited our selections to companies that do not charge fees for investing through the plan. We also sought to diversify the companies in terms of industry. The companies that met these conditions are listed below.

Here are some ideas...