"141 consecutive cash dividends," reads the tag line in a two-page ad for Nucor
The steel producer's ad goes on to explain how, beyond the quarterly dividends that it has consistently paid out since the summer of 1973, the company has increased the amount of its distributions every year.
Paying out uninterrupted dividends used to be a given. Cracking open the mailbox to find those quarterly checks is something that long-term investors in blue-chip companies have grown to expect. It's something that companies take pride in, too, but you don't typically see it touted in a sweeping full-color ad that takes up nearly the entire wingspan of a daily financial news publication. I guess things have changed when even General Motors
Investors see potholes. It's time to brush up on those defensive driving skills.
Salmon swimming upstream are everywhere
These are dangerous times for income investors. Fixed-income yields have fallen since the Fed began slashing interest rates, turning money market funds and short-term CDs into parking spaces instead of wealth builders. Dividend-paying stocks are a logical alternative for investors willing to take on a little risk, but the uncertain economy has also found once-dependable producers slashing their yields.
Most of the hacking has taken place in the problematic sectors of financial services and homebuilders, but investors would be wrong to paint entire sectors in broad strokes. Financial services may be a minefield, but discount broker Charles Schwab
But what really separates a Wells Fargo from a Washington Mutual
In a nutshell, if you're the type of dividend-hungry investor who considers due diligence to be little more than scrolling down the "current yield" column on a page of stock listings, you're in for a rude awakening -- if you haven't been smacked out of your slumber already.
Q is for quality, not quantity
Keep in mind that quality companies will continue to enhance their payout rates. Even if Nucor's ad makes it seem as if dividend consistency is the new anomaly, there are always companies upgrading their disbursements. Every Monday, I profile four companies that have recently raised their dividends in my "4 Stocks That Took a Hike" column. Some weeks may be harder than others when it comes to ferreting out four companies that have loosened up on their purse strings the previous week, but I haven't had to kill the column yet.
Dividends aren’t an endangered species. If you're impressed by Nucor's ad, you may warm up to companies like industrial toolmaker Stanley Works
You will probably also want to kick the tires that hold up the Income Investor newsletter, where stocks paying out generous dividends get recommendations only if the companies pass financial muster. You don't want to be caught holding a dividend time bomb when you can snap up the next quality company to take out a two-page ad singing its payout-pumping praises.
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