Dividend stocks, properly used, can drive powerful returns for any portfolio. The idea of a company paying you each quarter as a thank-you for investing in it is incredibly attractive to many investors -- particularly those seeking income in retirement.
But not all dividends are created equal, and the strength of the underlying business is key to that long-term income growth that makes dividends so attractive. Fortunately, The Motley Fool has a dividend-focused stock-picking service called Motley Fool Income Investor. Led by advisor Michael Olsen, CFA, the Income Investor team is dedicated to finding the best dividend stocks in the market, with the goal of helping subscribers generate stable long-term income from the stock market.
How Income Investor picks the best dividend stocks
Many new dividend investors start by screening for the highest dividends and then picking stocks sporting high single-digit (sometimes even double-digit!) yields. After all, why settle for a 3% annual dividend when you can get 8%, 10%, sometimes even more?
It's a classic new investor mistake, and one that the Income Investor team knows to avoid. Dividend yields are often high because the underlying business is faltering, leading investors to jump ship as they perceive incoming dividend reductions. If you're planning one day to depend on income from stocks, you don't want to see that suddenly halved (or worse).
Instead, the Income Investor team focuses on businesses with the ability to grow their dividend yields. These companies are finding ways to generate more and more cash – cash they can use to further grow their business, with some left over to increase the dividend. This leads to a virtuous cycle of more cash generated, growing dividends, and reinvestment to keep both cash and dividends growing into the future.
Strong management and a strong 'moat' that the business can use to distinguish itself from competitors are both key to this strategy, and the Income Investor team seeks both as they put their best ideas out in front of members.
Here's what comes with an Income Investor subscription
Income Investor is on sale right now at a significant discount. We'll tell you more about that special offer in just a second. But first, let's talk through what an Income Investor subscription gets you.
First, the obvious one: Stock picks. The Income Investor team provides a new pick for members each month. The team also identifies a handful of stocks it considers the "best buys now" – usually stocks with unique and timely opportunities for long-term investors.
The Income Investor team also provides regular updates for all stocks it has recommended, including updated buy, sell, and hold recommendations as companies' opportunities and threats come into sharper focus. For those interested in keeping an eye on what's happening for Income Investor recs on a more regular basis, the team also provides earnings coverage and updates when major news significantly moves a stock.
Perhaps the most undervalued part of an Income Investor subscription is the excellent crew of subscribers who regularly correspond on the Income Investor message boards. These lifelong Fools have helped build an incredible community that provides help and education to newer investors and lots of stimulating discussion for the more advanced.
Don't miss this Income Investor discount
We're offering Income Investor for a massive discount right now – you can get access to a newsletter that many Fools have gladly subscribed to for $199 per year for as little a significant discount to list price.
This is your chance to join the thousands of investors who already benefit from the Income Investor team's top-notch advice. This offer could end at any time, so please don't miss out on this enormous discount and chance to revolutionize your investing with all the benefits of dividend stocks.
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