Motley Fool Hidden Gems Investing Dividends 101
Jul 9, 2022
Join Motley Fool analyst Matt Argersinger, a dividend investing specialist, as he dives into the world of dividends. He discusses the advantages of buying dividend stocks and how to identify healthy payouts, using examples from renowned companies like Coca-Cola. Matt shares insights on the benefits of dividend aristocrats and explores promising opportunities in firms like eBay and Quest Diagnostics. He also compares individual dividend stocks to ETFs, weighing the attractions of both for investors.
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Dividends as Financial Indicators
- Consistent dividend payments and increases often indicate a company's strong economic moat and financial health.
- Examining dividend changes offers insights into management's future expectations and company performance, like with Vail Resorts.
Dividend Aristocrats Outperform
- Dividend aristocrats, S&P 500 companies with 25+ years of consecutive dividend increases, often outperform the S&P in down months.
- A Standard & Poor's study showed they outperformed about 69% of the time since 1990 when the S&P had negative returns.
Dividend Payers in Inflation
- During inflationary periods (4-6%), dividend-paying companies have historically outperformed non-payers by about 15% annually.
- This outperformance increases to around 17.5% for companies that consistently raise their dividends, showcasing their pricing power.