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19 Dividend Champions For Further Research



September 11, 2017 – Comments (1) | RELATED TICKERS: HRL , KMB , WBA

One of the most important factors that separate winning investors from losing investors is the ability to develop a process that you stick to no matter what happens. When you have a process, you take guesswork out of investing, and you stick to the plan through thick or thin.

Ever since I started focusing on dividend growth investing a decade ago, I have been able to invest my savings regularly, using my process. My process for identifying companies is very simple:

1) I start with the list of dividend champions, which includes companies that have raised dividends each year for at least a quarter of a century. This requirement ensures that I focus on quality companies with lasting business models

2) I eliminate companies that sell at high P/E ratios above 20. I believe that even the best company in the world is not worth overpaying for. I would much rather buy a quality company at a favorable valuation, than overpay for future growth. Valuation is important.

3) I eliminate companies with high dividend payout ratios. Dividend safety is very important, which is why I want to have a margin of safety in order to lower the likelihood that dividends will be cut during the next recession. Since I plan to live off dividends in retirement, I only want to focus on the companies that can deliver dependable dividend income for me.

4) I also focus on companies that have managed to boost dividends by at least 3%/year over the past 5 and 10 years. We want companies whose dividend payments will at least match inflation. 

5) Last but not least, we evaluate the ten year trends in company’s earnings per share. We want companies that grow earnings per share. This provides fuel for future dividend increases and increases the likelihood that the intrinsic value of the business grows over time.

Using the parameters set above, I narrowed the list of dividend champions down to this group of quality companies for further research:


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1 Comments – Post Your Own

#1) On September 20, 2017 at 8:05 AM, RoseLoffer (< 20) wrote:

Well, winning investors as well as holding them is a really hard but extremly important task. Without investors you will never run succesfull business (if you don't have few millions, of course). And here reseach is very useful part. Without it it's really hard to identify perfect investor for you. That is why i like this article. Thanks for sharing these useful tips!


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