|Dedicated to the success of the individual investor
|Dear Fellow Investor,
Whether your goal is long-term wealth accumulation, income to invest, or income to use
right now, dividend growth stocks can help you reach your goal. You can become
a part-owner of successful businesses and share in their profits through dividends that
are always positive and paid in cash.
Stocks are not only worth what you could sell them for. Dividend growth companies pay
attractive yields and raise their dividends every year. Much of their value comes from
those future dividend payments, because they provide real, spendable, investable
cash each year.
These enterprises are consistently profitable, grow their earnings through thick and thin,
and operate with the best business models. There are only a few hundred such
companies in the world. And best of all, they share their profits with their
shareholders on a regular basis: They not only pay but also raise their
dividends every year. Depending on where you are in life, you can reinvest those
dividends to speed up your accumulation of wealth, ramp up your income stream, or
take them as rising income that stays ahead of inflation.
My eBook, TOP 40 DIVIDEND GROWTH STOCKS FOR 2013: A Sensible Guide to
Dividend Growth Investing, shows you how to build your own perpetual cash
machine of increasing dividends. It presents an exclusive list and exhaustive analysis
of 40 great dividend growth stocks for 2013, plus a complete guide on how to construct
and maintain your dividend stock portfolio.
The dividend growth strategy allows you to own and partner with your companies. You
share in their successes rather than trade them like baseball cards. TOP 40 DIVIDEND
GROWTH STOCKS FOR 2013 is the best how-to-do-it guide for dividend growth
investing. It presents a straightforward sensible method for picking great dividend
stocks, valuing them to find fair prices, and managing your portfolio.
Whether your objective is to accumulate wealth over a long period of time or to
create a reliable inflation-beating income stream, the dividend growth strategy
can work for you. Following my step-by-step method, you can start creating a new
dividend growth portfolio immediately or re-tool a portfolio you already have.
This message is meant to be quiet, sensible, and informative. It is for adults who are
serious about stock investing. It is for self-directed individuals who want to be intelligent
investors in superior businesses and collect a fair share of the profits of the companies
they invest in rather than try to out-gun Wall Street at the trading game.
Keep reading to find out…
1. Why Dividend Stocks are Good for Long-Term Wealth Building
2. Why Dividend Stocks are Good for Immediate Income
3. Whether Dividend Stocks Are Safe
4. Meet the Top 40 Dividend Growth Stocks for 2013
5. Why Is the Step-by-Step Investment Guide Important?
6. Features, Benefits, and Distinctions from Competitors
7. How to Purchase
1. Why Dividend Stocks are Good for Long-Term Wealth Building
From a long-term perspective, the most profitable stocks are dividend stocks.
The stocks with the best total returns are not the headline-grabbing high-growth, high-
priced, “latest great thing” issues. They are not hot technology stocks. The champions in
the best-total-returns game are dividend-paying and dividend-raising stocks.
Look at this fascinating chart from Ned Davis Research:
Average Annual Total Returns of S&P 500 Stocks by Dividend Policy
January 31, 1972 to December 31, 2009
Source: ©2009 Ned Davis research, Inc. Dividend-Paying Stocks represents the dividend-paying stocks of the
S&P 500, based on rolling 12-month dividend policy. Past performance does not guarantee future results.
Please notice that the total return from dividend-raising stocks (the blue bar at the
right) far exceeds the return from non-dividend-paying stocks (the green bar). Many
studies have come to similar conclusions, and they are discussed in the eBook.
Even during the high-flying bull market of 1982-2000, when so much total return came
from price increases, dividend stocks outperformed non-dividend stocks. The same
thing happened in the market recovery from 2003-2007.
Studies show that dividends have accounted for nearly half the total return of
the stock market, year in and year out, over very long terms. That may surprise
you, considering how little publicity dividends get compared to stock prices. There is no
widely reported dividend index that gets the coverage given every day to the Dow, the
S&P 500, and the NASDAQ indexes.
But those indexes show price changes only. (The chart above reflects total returns, not
just price changes.) Thus, traditional indexes give a very incomplete picture of "how
stocks are doing." No wonder dividends pass unnoticed. But the fact is, hundreds of
billions of dollars are distributed every year by dividend-paying companies. In
2012, more than $277 Billion was distributed by S&P 500 companies alone, an
increase of more than 15 percent over 2011. In 2013, all expectations are that the total
distributions will increase again, as they have in every year (except 2009) for decades.
It's almost like a stimulus package every year, and anybody can get in on it.
Common misconceptions are that dividend stocks are--
These notions are all incorrect. Dividend-paying stocks are attractive as a core
investment for anybody, of any age.
Are you in the “wealth accumulation” stage of your life? That would be basically
everybody short of retirement. You have immediate financial needs: Day-to-day pocket
money, groceries, gasoline, mortgage and car payments, and raising your kids. Beyond
that, your predominant investment goal is to accumulate enough to retire. Under the
dividend growth approach, you reinvest dividends to build wealth. The following chart
shows the impact of reinvesting dividends.
What causes the big difference between the two bars in the chart? Re-investing
dividends brings a second layer of compounding into play. You create a virtuous
circle: Re-invest dividends >> More shares owned >> More dividends to re-invest >>
etc. (The first layer of compounding comes from the annual increases in dividends by the
companies; each increase builds on the ones before it.) You can "beat the market"
without even trying to.
The dividend growth strategy is not about guaranteeing that you will build a fortune--no
one can control the market value of their portfolio. But the strategy does tilt the odds in
your favor that your total wealth will rise over time, and it does insure that you are
collecting what I call "dividend rights" along the way. The value of those rights increases
over time. It is these dividend rights that will put you in good stead when you hit
retirement age and need inflation-beating income.
2. Why Dividend Growth Stocks Are Good for Immediate Income
Maybe you are already retired. The benefit of dividend growth stocks is pretty
obvious: They provide rising income. You do not have to sell the stock to get
the dividend. It is simply sent to you or credited to your account. You don't have to touch
You can do anything you like with your dividends. Those dollars are not "trapped" inside
the stock's share price. You don't have to sell shares to get them. The dividends are
distributed directly to you. They provide positive returns that are paid in cash.
If you are a retiree, you can spend the dollars as month-to-month income. This is where
you reap the benefits of intelligent wealth-building during your accumulation years. Your
income results from having accumulated all of those "dividend rights" along the way.
My studies show that many retirees want to have both income and a growing nest egg.
Dividends make this possible. You can re-invest some and spend the rest. And, of
course, because dividend stocks are stocks, chances are good that they will generate
price appreciation over time, even without re-investing the dividends.
In the bear market of 2007-2009, many stocks got devastated. Dividend growth stocks
lost market value too; dividends do not guarantee against short-term paper losses. But
the best dividend stocks held up better than most, and dividend growth investors were
able to hold on, because of the cash they were receiving. When the bull rally began in
March, 2009, dividend growth stocks generally rose right back up with the market, even
outperforming it when you include the dividends. And here's the great thing: Most of
the best dividend growth stocks never stopped raising their dividends straight
through the financial crisis and market crash. Did you know that more than 400
companies kept raising their dividends right through the Great Recession? Their
owners' income streams did not crash, they went up. That is because dividends are
independent of the market.
That leads us to probably the best benefit of dividend growth stocks. Unlike your
pension, fixed annuity, CD, or bond, your dividend income will grow each year.
Stocks with rising dividends are the only ones that appear in the Top 40. Few bonds
increase their payout each year, and neither does your CD or fixed annuity.
When you retire, you want to have plenty to live on, and you also want to keep
your nest egg safe. These two goals--income and safety--are paramount. If you are
retired, you must figure that you may be in this stage for 30 years or more—as long or
longer than you were in the workforce. Besides looking after your own needs and not
outliving your money, you may wish to help your kids buy their first house, be generous
with your grandchildren, or perhaps leave a legacy. That's why income and safety
become so important: Income to live on, safety to keep the golden goose alive.
3. Are Dividend Stocks Safe?
Relative safety is the third benefit of dividend stocks. The champions of the safety game
are dividend-paying stocks.
There are three aspects to investment risk: (1) actual ("realized") loss of wealth; (2) risk
to the income; and (3) loss of purchasing power to inflation.
Well-selected dividend growth stocks are low-risk on all three scales.
First, risk of actual loss. Dividend growth companies have historically held up better than
non-dividend-payers during hard times in the stock market, and they tend to recover
sooner. This is not surprising. The best dividend-paying companies are mature,
solid, well established, and reliable businesses. Many are wondrous cash
machines engaged in perpetually successful businesses. They pull in enough money
every year to pay a healthy dividend and still have enough left to grow the business too.
They suffer less during bear markets. In fact, many strengthen their competitive positions
during recessions as shakier competitors falter.
Of course, all stocks are vulnerable to market risk. But historically, dividend-paying
stocks have been less vulnerable than others. In addition, dividend growth investors
often become less concerned with the market value of their securities, because they
have purchased the right to receive the dividend payouts. Their focus is on the
growing dividend stream. The fact that the price of those securities keeps fluctuating
becomes less important so long as the dividends keep coming.
Second, risk to the dividend. The best dividend companies cut their dividends
seldom and raise them often. Their dividend practices tend to persist, being
tantamount to company policy. They will go to great lengths not to deviate from the
dividend pattern they have established. Stocks with a history of increasing their
dividends and the financial wherewithal to keep doing it are the only kind you will find in
the Top 40.
And finally, risk to purchasing power. This is the hidden risk, the thief that robs us all:
Inflation. You don’t get a monthly bill in your mailbox for inflation. But it is hidden in
the prices you pay for everything, driving up your cost of living. And this is where
dividend stocks really shine.
Well-chosen dividend stocks can be as safe as bonds. In fact, over long time
periods, it can be argued that they are safer, because their income keeps ahead
of inflation via dividend growth. There’s a reason that bonds are called “fixed
income” investments—their yield never rises and neither does their face value.
Do you think the prices of gas or groceries are fixed? Of course not. That's why bonds
can't keep pace. But dividend-paying stocks do keep up with inflation. The dividends
from well-chosen dividend stocks grow faster than inflation. Five percent, eight
percent, or 10 percent annual growth in dividends is not at all unusual. The average
dividend increase for the 40 stocks on 2012's Top 40 list was 11 percent. Thirteen of the
stocks increased their dividends by 13 percent of more.
4. Meet the Top 40 Dividend Growth Stocks for 2013
Let me give you a few insights into the Top 40 Dividend Growth Stocks themselves.
The Top 40 were selected through a rigorous process that I use every year. I first run an
initial universe of about 500 dividend growth stocks through several threshold screens to
get the candidates down to a manageable number. Then, I use my Easy-Rate™
scoring system to identify the best ones. The system looks first at the company's
quality, with a focus on its business model, financial strength, and dividend record.
These evaluations make it easy to see if a company is an excellent one or an also-ran.
After identifying the best companies, I score each stock’s valuation. That means looking
for the best bargains. The entire system is methodical, understandable, and emotionless.
The cream of the dividend growth stocks make it to the Top 40. They are presented in
six tables so you can find them easily: (1) alphabetically, (2) by total score, (3) by
company quality score, (4) by dividend yield, (5) by dividend growth rate, and (6) by
The Easy-Rate system puts great emphasis on growth, so a natural result is that
the Top 40 list is dominated by stocks with a lengthy history of annual dividend
increases. It is those growing dividends that allow you to accelerate total wealth
accumulation (if you are reinvesting dividends) or to take out a rising income (if you are
My multi-faceted approach invariably leads to the elimination of many of the highest-
yielding stocks--those with yields of 10-15 percent or more. The problem with most of
the highest-yielding stocks is that their yields are not sustainable. They are
based on things like current unique economic cycles, bubbles, extreme price drops in
the stocks themselves, and other impermanent conditions. You’d have to trade in and
out of such stocks to make them work. That goes against one of the goals of dividend
growth investing, which is that stock turnover should be relatively infrequent. In my own
investing, I make few buys and sells beyond the happy task of reinvesting dividends.
Here is a small sample of the companies that made the grade to the Top 40:
The book includes completed Easy-Rate Scoresheets for each of the Top 40, one page
per stock. This compilation of the best dividend growth stocks is available nowhere else.
5. Why Is the Step-by-Step Guide Important?
Four chapters in the text comprise a complete how-to-do-it guide. The eBook
presents dividend growth investing in logical steps that build a stairway to understanding
Dividend growth investing is not about flash and show. It is not about doubling your
money in three months with risky picks. Rather, it is about substance and sharing in the
success of your companies over long time periods. The text contains two chapters about
identifying the best dividend growth companies, a chapter on valuing them, and another
chapter on managing your portfolio.
Other chapters in the eBook build the case for dividend growth investing, describe the
Easy-Rate approach, and explain how to create and manage a dividend growth
portfolio. One chapter extensively discusses the role of dividend growth investing in
The text follows the mission of SensibleStocks.com: To help self-directed individual
investors with fact-based, practical, actionable information that they can use to profit in
the stock market.
I write for the individual investor. The levels of comprehensiveness and quality are
high, but everything is in plain English and presented in a pleasing format. The
methodology is totally transparent, and there is nothing that is not fact-based or that you
cannot verify yourself.
The text is non-hyperbolic, educational, and accessible. There are no “Secrets of the
Wall Street Gurus,” “Six Things Wall Street Doesn’t Want You to Know,” or “How to Get
Gains of 1716.8% in Six Months.” Those approaches appeal to some people, but not to
me, and I don’t think to you.
I am excited about dividend-growth investing. Using this eBook as my guide, I have
converted a significant portion of my family's own nest egg over to dividend growth
stocks, in addition to the real-money Dividend Growth Portfolio tracked on this Web site
that I use to demonstrate dividend growth investing in action.
As stated earlier, I think that dividend-paying stocks are an ideal investment for most
individual investors—about the only exception being someone who is looking for fast
hyper-growth. That is unlikely with dividend stocks. Of course, neither is fast hyper-loss.
Owning dividend stocks is exciting, rewarding, and fun. Jump in the pool, the water’s fine.
6. Features, Benefits, and Distinctions from Competitors
Here are the most important features and benefits of TOP 40 DIVIDEND GROWTH
STOCKS FOR 2013: A Sensible Guide to Dividend Growth Investing:
7. How to Purchase
1. Click any of the “Buy Now” buttons located on this page. The price is $40...a buck a
stock, plus you get the complete text, step-by-step guide, and filled-out Easy-Rate
Scoresheets for each stock.
2. Payment is securely handled through PayPal. You do not need a PayPal account—
they accept major credit cards in the usual fashion.
3. After payment is confirmed, you will receive a “Thank You” email from me. In it, you
will find a clear link to the document you have purchased.
4. Use the link to access the PDF document (eBook). Access is instantaneous.
Download the document to your own computer or iPad. While the material is
copyrighted, there are no annoying restrictions on printing or any other use of the
product you have purchased. You own it.
It’s as easy as that. Within a few minutes, you will have your own copy of TOP
40 DIVIDEND GROWTH STOCKS FOR 2013: A Sensible Guide to Dividend
Best Wishes for Your Investing Success,
Dave Van Knapp
PS: I am really excited about dividend growth investing. In fact in 2011, I abandoned my
Timing Outlook and other activities based on capital-gains or trading strategies, and I
moved the money into the dividend growth strategy. That means that a large percentage
of my wife's and my personal assets are now invested using dividend growth principles. I
have come to understand that if I get the dividend growth part of my investing right, the
portfolio value will take care of itself. I sincerely believe that for the average individual
investor, this is the best form of stock investing for the long haul. And that includes me.
This Special Study is not sold in bookstores. It’s easy to order online. Just click on one
of the "Buy Now" buttons on this page. You will get TOP 40 DIVIDEND GROWTH
STOCKS FOR 2013 in minutes. The download to your computer is instantaneous once
payment is completed.
|Would You Like to Create
Rising Income or Wealth with
The Best Dividend Growth Stocks?
TIRED OF BATTLING WALL STREET?
ARE YOU READY TO CHART A NEW COURSE
AND BECOME AN INVESTOR IN THE OLD-FASHIONED SENSE?