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| THE TOP 40 DIVIDEND STOCKS FOR 2008: How (and Why) to Build a Cash Machine of Dividend Stocks Table of Contents and Excerpt |
TABLE OF CONTENTS PAGE
1. Welcome to the World of Dividend Investing……….............. 4
2. What Are Dividends?........................................................... 5
3. Why Invest in Dividend Stocks?........................................... 10
4. What Are the Characteristics of the Best Dividend Stocks?.... 26
5. Creating and Managing Your Dividend Stock Portfolio.......... 38
6. The Top 40 Dividend Stocks for 2008.................................. 48
7. Easy-Rate™ Scoresheets for the Top 40
Dividend Stocks for 2008........................................................... 58
8. Disclaimer and Important Information……………………….... 99
1. Welcome to the World of Dividend Investing……….............. 4
2. What Are Dividends?........................................................... 5
3. Why Invest in Dividend Stocks?........................................... 10
4. What Are the Characteristics of the Best Dividend Stocks?.... 26
5. Creating and Managing Your Dividend Stock Portfolio.......... 38
6. The Top 40 Dividend Stocks for 2008.................................. 48
7. Easy-Rate™ Scoresheets for the Top 40
Dividend Stocks for 2008........................................................... 58
8. Disclaimer and Important Information……………………….... 99
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EXCERPT
SECTION 3
WHY INVEST IN DIVIDEND STOCKS?
In 1934, Benjamin Graham and David Dodd wrote in their classic Security Analysis,
"The prime purpose of a business corporation is to pay dividends to its owners
[emphasis added].” Many investors agreed, considering the possibility of stock price
increases to be speculative in comparison to a steady flow of dividends.
But 66 years later, by the end of the bull market of 1982–2000, there was far less
interest in dividends among investors. The humongous rise in share prices during
the long bull market dwarfed dividends’ contribution to total returns. Many
investors’ interest in dividends dropped to near zero.
But times change. The bursting of the bubble from 2000-2002 sobered up many
investors. There has been a rekindling in appreciation for dividends. Investors
realize that a dividend stock portfolio can lower risk, grow principal, and steadily
increase income over time.
Dividends are stocks’ secret weapon. Studies show that—despite their relatively
small contribution during the bubble years—dividends have accounted for half or
more of the total return of the stock market over very long terms. This may be
surprising considering how little publicity dividends get. There is no widely followed
dividend index that gets the kind of publicity bestowed every day on the Dow, the
S&P 500, and the NASDAQ—all of which reflect price changes only, and therefore
give a very incomplete picture of “how stocks are doing.”
Dividend stocks are attractive as a core investment for anybody. Common
misperceptions are that dividend stocks are slow-growing, boring investments; that
a company’s payment of dividends is a sign of weakness, that the company cannot
think of anything better to do with the money; and that dividend stocks are good
only for retirees needing income. These are all incorrect, unless you consider steady
income and wealth-building to be boring.
In fact, dividend stocks may just be the best investment that anyone can own.
Let’s see why.
1. Dividend Stocks Offer a Good Total Return
[text omitted]
2. Dividends are Lightly Taxed
[text omitted]
3. Dividend Stocks Are Less Volatile, Their Companies More Solid
[text omitted]
4. Dividend Practices Tend To Be Persistent
[text omitted]
5. You Do Not Have to Sell the Stock to Get the Dividend
[text omitted]
6. Unlike Bonds, Dividend Yields Can Rise Over Time
[test omitted]
7. Unlike Bonds, Your Principal Can Increase Over Time
[text omitted]
8. You Can Re-invest Dividends to Accelerate the Compounding Effect
[text omitted]
9. Certain Companies Are Organized Specifically to Pay High Dividends
[text omitted]
10. Dividends Are Superior to Share Repurchases
[text omitted]
EXCERPT
SECTION 3
WHY INVEST IN DIVIDEND STOCKS?
In 1934, Benjamin Graham and David Dodd wrote in their classic Security Analysis,
"The prime purpose of a business corporation is to pay dividends to its owners
[emphasis added].” Many investors agreed, considering the possibility of stock price
increases to be speculative in comparison to a steady flow of dividends.
But 66 years later, by the end of the bull market of 1982–2000, there was far less
interest in dividends among investors. The humongous rise in share prices during
the long bull market dwarfed dividends’ contribution to total returns. Many
investors’ interest in dividends dropped to near zero.
But times change. The bursting of the bubble from 2000-2002 sobered up many
investors. There has been a rekindling in appreciation for dividends. Investors
realize that a dividend stock portfolio can lower risk, grow principal, and steadily
increase income over time.
Dividends are stocks’ secret weapon. Studies show that—despite their relatively
small contribution during the bubble years—dividends have accounted for half or
more of the total return of the stock market over very long terms. This may be
surprising considering how little publicity dividends get. There is no widely followed
dividend index that gets the kind of publicity bestowed every day on the Dow, the
S&P 500, and the NASDAQ—all of which reflect price changes only, and therefore
give a very incomplete picture of “how stocks are doing.”
Dividend stocks are attractive as a core investment for anybody. Common
misperceptions are that dividend stocks are slow-growing, boring investments; that
a company’s payment of dividends is a sign of weakness, that the company cannot
think of anything better to do with the money; and that dividend stocks are good
only for retirees needing income. These are all incorrect, unless you consider steady
income and wealth-building to be boring.
In fact, dividend stocks may just be the best investment that anyone can own.
Let’s see why.
1. Dividend Stocks Offer a Good Total Return
[text omitted]
2. Dividends are Lightly Taxed
[text omitted]
3. Dividend Stocks Are Less Volatile, Their Companies More Solid
[text omitted]
4. Dividend Practices Tend To Be Persistent
[text omitted]
5. You Do Not Have to Sell the Stock to Get the Dividend
[text omitted]
6. Unlike Bonds, Dividend Yields Can Rise Over Time
[test omitted]
7. Unlike Bonds, Your Principal Can Increase Over Time
[text omitted]
8. You Can Re-invest Dividends to Accelerate the Compounding Effect
[text omitted]
9. Certain Companies Are Organized Specifically to Pay High Dividends
[text omitted]
10. Dividends Are Superior to Share Repurchases
[text omitted]
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