Stocks that raise their dividend meaningfully every year will make you a lot of money over the long haul… provided they continue to boost their payouts, of course.

Studies by two global investment heavyweights, BlackRock and GMO, have shown that 90% of U.S. equity returns over the past 100 years have been thanks to dividends and dividend growth.

Ned Davis Research also conducted its own 43-year study on stock returns (from January 1972 through December 2014). The conclusion? Dividend payers are good… but dividend growers are great. Stocks that paid a growing dividend delivered double-digit returns and outpaced steady dividend payers by nearly one-third:

Annual Rate of Return (Ned Davis Research)

Over time, this compounding really adds up as these stocks pull away from stagnant payers and the market at-large:

Dividend Growers Pull Away Over Time

Worried about the Fed’s rate cycle?… Read more

Crude oil’s crash may have roiled stocks to start 2016, but cheap fuel is actually a great thing for the average American. Consumer confidence is heading higher, thanks to low gas prices and a continually improving job market. More disposable income means more fun for most Americans…

The recent Mintel American Lifestyles 2015 report shows that Americans are planning on increasing vacation travel by 27 percent. It’s a good time to buy stocks that are directly benefiting from this trend.

One of the largest online travel companies, Tripadvisor Inc (TRIP), just reported a solid quarter with increased consumer activity. And TRIP also detailed how their average monthly hotel shoppers grew by 10% year-over-year (to 113 million) in the last quarter of 2015.… Read more

If you’re a retiree, or a near-retiree, you’ve probably been told you should dump—or at least reduce—your stock holdings and focus on fixed-income investments.

It sounds like a smart move, right? After all, CDs, Treasuries and the like protect your principal, while one big downturn can wipe out your stock-market gains.

But going lean on stocks leaves you open to two big risks: that you’ll outlive your savings and miss out on the long-term gains only the stock market can offer.

Consider these numbers from the Society of Actuaries: if you’re a 65-year-old man, you have a 41% chance of living to 85 and 20% odds of hitting 90.… Read more

It’s a one-two punch I love to see in a stock: a growing dividend and a rock-solid commitment to research and development.

These companies serve up a profitable combo: immediate cash in your pocket and potential for huge gains—and even bigger dividend payouts—as they churn out the next wave of must-have products.

I bring this up because right now, S&P 500 companies are spending big on both R&D and dividends.

Here are the latest numbers from FactSet: in the 12 months ended September 30, 2015, S&P 500 firms poured $257.8 billion into R&D, a 10-year high. At the same time, they doled out $410.8 billion in dividend payments, also the highest total in at least a decade.… Read more

Oil prices picked up this week on the promise that Saudi Arabia and Russia would coordinate a cut in production. But surprise, surprise – there’s already speculation that they’re both going to cheat.

That’s going to keep oil prices low – and it’s going to threaten the dividends of many producers, both here and abroad. For some reason, many energy management teams believe that this inventory glut and price devaluation cannot last. Apparently they forgot what prices looked like pre-2005:

As long as money managers are making bullish bets on oil, the price is going to stay low or head lower.… Read more

It’s easy to beat the stock market – just buy stocks in companies that pay dividends, and boost their payouts every year.

While dividends help you “cash out” of your investment over time, the annual raises are what really make you money. Let me explain…

Even after a 15% pullback, the S&P 500 yields just 2.3% today. Which means if you buy an index fund today, and you never saw a dividend increase, it’d take you more than 40 years to get your initial investment back in cash.

Fortunately companies with growing earnings often do pass their higher profits along to shareholders.… Read more

Slowly but surely, investors are once again prioritizing dividends.

After suffering a full-on panic attack over the Fed’s interest rate hike last year—and ditching high-yielding investments like real estate investment trusts (REITs) in the process—they’re having a change of heart.

You can see it in the performance of the Vanguard REIT Index Fund (VNQ), an ETF we’ll examine in more detail below: so far in 2016, VNQ has returned 2% versus just 0.5% for the S&P 500.

Call it a late realization that the rate “liftoff” is mostly a non-event for REITs. Because even if the Fed follows through on its plan to raise rates this year (a big “if” in light of the wavering global economy and cowed US inflation), you’ll still be waiting a very long time for safer vehicles like Treasuries to play in the same league as REITs throwing off yields of 6% or more.… Read more

Business development companies (or BDCs) have been hit hard over the past few quarters. Those with large energy investments have seen their stock prices plunge along with oil.

But this is a love-hate story for investors. Even as these stocks have grown more speculative, these issues have garnered even more attention for their fat dividends. Many BDCs now have yields north of 10%.

Unfortunately, first-level investors tend to flock to the riskiest BDCs, because they have the highest stated yields.

Like many contrarians, I’m an income investor who’s always on the lookout for a good value stock. I love buying stocks of unloved companies at a bargain.… Read more