Study after study has shown that stocks that pay dividends—and grow them every year—are the best way to beat the market. These payouts also give you “bear insurance” because they can tide you over when your investments hit a rough patch.

But just looking for companies that hike their dividends annually isn’t enough. You need strong dividend growth, too. So you’ll want to avoid stocks like AT&T (T), which has raised its quarterly dividend just $0.01 a year since 2008. Big deal!

With that in mind, I’d like to share three “anti-AT&Ts” my research has recently uncovered—undervalued gems poised to double their payouts in the next five years.… Read more

Certain stocks are beating the S&P while paying dividends three to seven times the market’s average. Thanks to gradual improvements in the economy and higher interest rates, these stocks have trounced the S&P 500 in 2016, and should continue to do so.

Business development corporations (BDCs) have bounced back spiritedly from their early 2016 slump, buoyed by their steady and significant payouts. The best performers of the group have outperformed by a wide margin year-to-date—specifically Main Street Capital (MAIN), Goldman Sachs BDC (GSBD), and Triangle Capital (TCAP).

Big Payers With Better Returns

GSBD is managed by Goldman Sachs (GS), and has access to daddy’s massive investment bank’s rolodex.… Read more

With valuations stretched and earnings sagging—a forecast 7.9% drop for S&P 500 companies in the first quarter—it’s getting tougher to find reliable dividend growers at bargain prices.

You won’t find much comfort in the latest research from FactSet, either: in the fourth quarter, S&P 500 dividend per share (DPS) growth came in at 9.5%. That’s still healthy, but it’s the first time that figure has dipped into single digits since 2011.

But you should take that news with a huge grain of salt, because one sector—energy—carries most of the blame. In Q4, year-over-year DPS growth plunged to 2.4% among S&P 500 energy stocks, from 11.6% in Q3.… Read more

Real estate investment trusts (REITs) are a more reliable source of income than many comparable high yielding stocks in volatile sectors like energy. That’s because REITs are legally required to hand over the bulk of their income to investors. This unique structure, which is the result of legislature from the 1960s, makes REITs an attractive addition to an income-producing portfolio.

The five biggest REITs pay an average yield of nearly 3%. These dividends are secure, and growing thanks to expanded operations and improving profitability. Some of them have lost favor in recent months, and although they have recovered a bit from recent 52-week lows, they still remain affordable buys today.… Read more

Benjamin Graham, the father of value investing, liked bargains. In The Intelligent Investor, he told investors to look for stock prices at or below 15-times earnings (specifically less than 15X their three year average), and at or below 1.5-times book value.

And like us, he liked dividends. He’d only buy companies that paid dividends for each of the last 20 years prior.

His stringent formula should still outperform the broader market, and keep you out of trouble today. Problem is, it was outlined in 1949. And 67 years later, it’s challenging to find stocks that meet his stringent criteria because equity valuations have been high for the better part of 30 years now.… Read more

A couple of weeks ago, I discussed the value of investing in the S&P 500 Dividend Aristocrats, the 50 companies in the index that have hiked their dividends for at least 25 consecutive years.

It boils down to performance: in the last decade, this vaunted group has returned an average of 10.3% a year (including dividends), compared to just 6.3% for the S&P 500 as a whole.

It’s also a list that doesn’t change much. Last year, there was just one adjustment, and it was a removal, after Family Dollar Stores was taken over by Dollar Tree (DLTR).

But in the next 14 months, four companies will punch their tickets to this elite club.… Read more

A couple weeks ago, I showed you how to zero in on something every investor longs for: growth at a reasonable price.

These days, it’s a tall order. With the S&P 500 back near breakeven after this winter’s flame-out, valuations are again ticking higher.

But no matter where the broader market’s headed, there are always top-quality dividend payers on sale. The key is to comb through unloved sectors and tease out strong businesses that have been tossed out with the laggards.

Here are two examples of companies investors have (unfairly) punished. Their stocks won’t be long in detention, however—these businesses are too good, with management teams that are too shareholder friendly, to stay down for much longer.… Read more

This aging bull market in U.S. stocks turned seven last month. It’s a bit expensive and past its prime for my liking. But another “niche bull run” is kicking off right now. And no matter what happens with the broader market, these issues – and their dividends – will roll higher for decades.

There are 77 million Baby Boomers that make up 28% of the U.S. population. Any companies that make products they buy are usually doing great. This massive generation made baby products makers rich in the 1950s, and homebuilders rich in the 1990s and 2000s.

Now, they’re transitioning their spending again.… Read more