Wed. Nov. 11, 2009

7 Dividend Stocks To Slay The Wall Street Giants *

Driven by computers that cost more than the average person will earn in their lifetime the investment markets move at light speed. To keep pace hedge funds, mutual funds, institutional investors and multi-billion dollar money managers spend large sums of money on high-tech tools to give them an edge. Throw in some illegal insider trading from big names in the industry and it leaves you wondering what chance does a small individual investor have?

Not much of a chance if you let the Wall Street players define the rules. However, you might just slay the giant if you define the rules. In a recent Wall Street Journal article, Jason Zweig noted that:

From the point of view of an investor, all this frantic trading is just noise. In 1976, the great financial analyst Benjamin Graham declared that “the stock market resembles a huge laundry in which institutions take in large blocks of each other’s washing … without rhyme or reason.” Mr. Graham died that year, but today he would laugh at the speed of the spin cycle. He would then ignore the momentary vibrations in a company’s stock price and go right back to analyzing the value of its business.

As an investor, you are free to choose your own time horizon. If other people want to try earning a few fractions of a penny a few thousand times a day, you should wish them well — and refuse to join them.

Contrary to what many are now saying, buy-and-hold and investing in quality blue chip stocks is not dead. Consider the following stocks:

Abbott Laboratories (ABT) is engaged in the discovery, development, manufacture and sale of a diversified line of healthcare products including: drugs, nutritional products, diabetes monitoring devices and diagnostics. The company has a strong new product pipeline, with possible significant launches in both the medical device and pharmaceutical areas. ABT has increased its dividend for the last 37 years and the stock is currently yielding 3.10%. See the most recent Analysis.

Emerson Electric Co. (EMR) primarily makes backup power equipment for telecom and Internet providers and users, climate control components, and electric motors. The company has a strong competitive position in several major product categories. EMR has increased its dividend for the last 52 years and the stock is currently yielding 3.20%. See the most recent Analysis.

Johnson & Johnson (JNJ) engages in the manufacture and sale of various products in the health care field worldwide. The company enjoys competitive advantages and has products that are largely immune from economic cycles. JNJ has increased its dividend for the last 47 years and the stock is currently yielding 3.20%. See the most recent Analysis.

3M Co. (MMM) is a diversified technology company with a presence in various businesses, including industrial & transportation, healthcare, display & graphics, consumer & office, safety, security & protection services, and electro and communications. The company has a leading position in many of the markets it serves and a strong balance sheet with a relatively little debt. MMM has increased its dividend for the last 51 years and the stock is currently yielding 2.71%. See the most recent Analysis.

PepsiCo, Inc. (PEP) is a global snack and beverage company. The Company manufactures, markets and sells a range of salty, convenient, sweet and grain-based snacks, carbonated and non-carbonated beverages and foods. The company enjoys relatively stable end markets, strong cash flows, leading global market positions and trend-setting product innovations. PEP has increased its dividend for the last 37 years and the stock is currently yielding 2.87%. See the most recent Analysis.

SYSCO Corporation (SYY), through its subsidiaries, engages in the marketing and distribution of a range of food and related products primarily for foodservice industry in the United States and Canada. The company operates in a relatively stable industry, in which it has the largest market share. SYY has increased its dividend for the last 39 years and the stock is currently yielding 3.57%. See the most recent Analysis.

Wal-Mart Stores, Inc. (WMT) is the largest retailer in North America. The company operates retail stores in various formats worldwide. It operates through three segments: Wal-Mart Stores, Sam’s Club, and International. The company enjoys dominant market share positions, price leadership and strong cash flows. WMT has increased its dividend for the last 35 years and the stock is currently yielding 2.13%. See the most recent Analysis.

If your goal is to build an ever-increasing revenue stream from income investments, the above seven dividend stocks will give your income a boost over time. The key is to wait for the right entry point and let time take care of the rest.

Full Disclosure: Long ABT, EMR, JNJ, MMM, PEP, SYY, WMT. See a list of all my income holdings here.

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7 Responses to “7 Dividend Stocks To Slay The Wall Street Giants *”

  1. VLT says:

    Regarding the entry point lets say I want to buy 200 shares of a stock but I can only afford 50 shares–do you wait each time for the buy price before buying another 50 shares–for example i purchased 50 shares of KMB at 44 and want to buy more–so would you wait until it goes back to 44?

  2. VLT: I never consider the number of shares purchased. I set a minimum dollar amount that I am willing to purchase. The minimum is designed to keep my commissions well below 1% of the transaction.

    Best Wishes,

  3. Tejas says:

    I think DRIP investments is a very good option for stocks paying good dividends….This will earn dividends on dividend and cost of purchase/sell is low as well…

  4. Financial networks and publications want us to keep buying and selling at a frenzied pace, since this is what drives their profits. Yet it takes people time to realize that value investing is where fortunes are made. unfortunately, it’s not sexy and doesn’t generate headlines, so it’s shunned by the media. I’d rather make money quietly, thank you very much :-)

  5. John Murphy says:

    Some excellent recommendations there. As I think about this I’m wondering whether as a UK investor it might pay to buy these stocks on the basis that the dollar may decline further hence the value in GBP would rise and the yield would also increase. Any views?

  6. John: I do believe the dollar will decline more, but i would not buy these stocks as a currency play. At some point the dollar will hit bottom. Personally, I have moved away from international investments within my income portfolio – currency swings was one of the reasons. I prefer to hold international investments via ETFs in my capital appreciation portfolio.

    Best Wishes,


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