CSX (NYSE: CSX ) and Union Pacific (NYSE: UNP ) are selections for the real-money Inflation-Protected Income Growth portfolio. In this brief video, portfolio manager Chuck Saletta offers three reasons he's holding on to both company's stocks despite their substantial rises since he bought those shares a little more than a year ago.
Both CSX and Union Pacific made the cut to be part of this portfolio because of one of the dirty secrets that few finance professionals will openly admit: dividend stocks as a group handily outperform their non-dividend paying brethren. The reasons for this are too numerous to list here, but you can rest assured that it's true.
However, knowing this is only half the battle.The other half is identifying which dividend stocks in particular are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.
- Reasonable valuations, with market caps in line with fair-value estimates for both companies.
- Healthy balance sheets, with debt-to-equity ratios around 0.9 for CSX and 0.5 for Union Pacific.
- Covered and growing dividends with payout ratios in the low 30s and decent trends of dividend hikes.
To follow the iPIG portfolio as buy and sell decisions are made, watch Chuck's article feed by clicking here. To join The Motley Fool's free discussion board dedicated to the iPIG portfolio, simply click here.