Take Philip Morris for example. It spun off from its parent company Altria (NYSE: MO) in March 2008. Its first quarterly dividend payment of 46 cents per share gave the stock a yield of 3.5%.
In just a little more than four years, that quarterly payment has increased 85%. Anyone who bought just four years ago is earning nearly 7% a year on their original investment -- a figure that will only rise with future dividend increases.
Perhaps equally important, companies that boost their dividends also tend to deliver large capital gains over time.
Brookfield Infrastructure Partners (NYSE: BIP) -- which owns electric transmission grids, ports and railroads -- has raised its dividend five times, or 41%, since going public in May 2008. It has returned 171%.
Colgate-Palmolive (NYSE: CL) -- which sells personal-care products and has raised its dividend 55% in the past five years -- is up 55%.
Action to Take --> The trend is unmistakable. "Boring" companies that raise dividends beat the market. And staring at the potential for years of slower growth, that outperformance will be even greater in the years ahead.
Remember, the S&P 500 has lost 1% in capital gains during the past five years. But it's gained 10% when you include dividends.
The "dividend decade" is real... and we're already in the middle of it.
[Note: In my newest report -- The Top 10 Stocks For 2013 -- I've identified 10 stocks that are already benefiting from the "dividend decade." During the past five years, these 10 stocks have returned 87%... despite a flat market.
This includes one stock that's gained 137% in three years... another that's raised its dividend 463% since 2004... and another that has more than $9.21 per share in cash (nearly half of its share price). To learn more about my Top 10 Stocks for 2013, visit this link.]
NEW TIME Today, at 9:30 AM PT: Get the Market Movements in Advance: William's Edge Webinar for December 19th, 2014 | John Ransom
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