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, VIN COLBY (10 clicks)
Long only, dividend growth investing, large-cap, mega-cap
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Any family that has its wealth in a handful of dividend-paying, high-quality stocks is safely rich.

I will endeavor to tell you in this article about three high-dividend, high-quality stocks you can buy today, because of their depressed prices.

Now, for the three dividend stocks you can buy and hold forever:

1.) McDonald's (NYSE:MCD)

  • Current dividend yield: 3.54%
  • Annualized growth in total cash dividend paid since 2007: 10.25%
  • Annualized growth in EPS (earnings per share) - last 10 years: 23.82% (that's 6.8 times since 2002!)
  • Number of shares in 2012 / number of shares in 2008 = 84.68% (this metric shows you the company is taking care of its shareholders. Companies issuing stocks left and right should be regarded with utmost suspicion)

When examining the company's accounts it is necessary primarily to review the all important cash flow statement, to see if the incoming cash from operations is sufficient to cover the company's capital requirements and (this is most important to owners) if cash flow from operations less cash flow needed to cover the company's capital requirements big enough to pay out and grow the dividend as well as to buy back shares.

McDonald's Cash Flow

Fiscal Year Ending Dec 31 2011

2011

2010

2009

2008

2007

Total cash from operations (millions USD)

7,150

6,342

5,751

5,917

4,876

Capital expenditures (millions USD)

(2,730)

(2,136)

(1,952)

(2,136)

(1,947)

Free Cash Flow - FCF (millions USD)

4,420

4,206

3,799

3,781

2,929

Total cash dividends paid (millions USD)

(2,610)

(2,408)

(2,236)

(1,823)

(1,766)

FCF / cash dividends paid

1.69

1.74

1.69

2.07

1.65

Issuance (retirement) of stock, net (millions USD)

(3,029)

(2,235)

(2,465)

(3,371)

(2,805)

Basic/primary weighted average shares (millions)

1,032

1,066

1,092

1,127

1,188

Source: ft.com

2.) GlaxoSmithKline (NYSE:GSK)

  • Current dividend yield: 5.71%
  • Annualized growth in total cash dividend paid since 2007: 5.00%
  • Annualized growth in EPS (earnings per share) - last 9 years: 12% (that's 2.5 times since 2003)
  • Number of shares in 2012 / number of shares in 2008 = 88.64%

GlaxoSmithKline Cash Flow

Fiscal Year Ending Dec 31 2011

2011

2010

2009

2008

2007

Total cash from operations (millions GBP)

6,250

6,797

7,841

7,205

6,161

Capital expenditures (millions GBP)

(1,328)

(1,635)

(1,873)

(2,069)

(2,143)

Free Cash Flow - FCF (millions GBP)

4,922

5,162

5,968

5,136

4,018

Total cash dividends paid (millions GBP)

(3,406)

(3,205)

(3,003)

(2,929)

(2,793)

FCF / cash dividends paid

1.44

1.61

1.99

1.75

1.44

Issuance (retirement) of stock, net (millions GBP)

(1,932)

63

(1.00)

(3,654)

(3,244)

Basic/primary weighted average shares (millions)

5,028

5,085

5,069

5,195

5,524

Source: ft.com

3.) Chevron Corp (NYSE:CVX)

  • Current dividend yield: 3.44%
  • Annualized growth in total cash dividend paid since 2007: 6.39%
  • Annualized growth in EPS (earnings per share) - last 9 years: 18.10% (that's 3.8 times since 2003)
  • Number of shares in 2012 / number of shares in 2008 = 91.87%

Chevron Cash Flow

Fiscal Year Ending Dec 31 2011

2011

2010

2009

2008

2007

Total cash from operations (millions USD)

41,098

31,359

19,373

29,632

24,977

Total cash from investing (millions USD)

(27,489)

(20,915)

(16,572)

(17,081)

(13,933)

Free Cash Flow - FCF (millions USD)

13,609

10,444

2,801

12,551

11,044

Total cash dividends paid (millions USD)

(6,139)

(5,674)

(5,302)

(5,162)

(4,791)

FCF / cash dividends paid

2.22

1.84

0.53

2.43

2.31

Issuance (retirement) of stock, net (millions USD)

(3,193)

(306)

168

(6,821)

(6,389)

Basic/primary weighted average shares (millions)

1,986

1,997

1,992

2,038

2,118

Source: ft.com

Source: 3 Dividend Stocks To Buy Now And Hold Forever