Dividend stocks offer the best of both worlds – capital gains along with a recurring quarterly cash income stream. The positive about dividned stocks is most evident during turbulent market conditions, when investors suffer from volatility and lower stock prices. Most of the quality dividend stocks have hardly moved during the turmoil that started several months ago, caused by fears about a double dip, unemployment and defaults by sovereign countries. The cash dividend serves as an added bonus, as it provides a cushion against further declines in the stock price.
Back at the end of 2010, I was asked to selected the best stocks for 2011, as part of an ongoing competition between several investment site publishers. You can read the reasons behind my four selections in this article. The four stocks I selected included:
Philip Morris International Inc. (NYSE:PM), through its subsidiaries, engages in the manufacture and sale of cigarettes and other tobacco products in markets outside of the United States. The company raised its dividends by 20.30% this year. Yield: 3.70%. Check my analysis of the stock.
Johnson & Johnson (NYSE:JNJ) engages in the research and development, manufacture, and sale of various products in the health care field worldwide. The company operates in three segments: Consumer, Pharmaceutical, and Medical Devices and Diagnostics. The company raised its dividends by 5.60% this year. Johnson & Johnson has raised distributions for 49 consecutive years. Yield: 3.50%. Check my analysis of the stock.
Overall, my dividend stock picks are outperforming the S&P 500 year to date. My year-to-date results are listed below:
- Dividend Growth Investor +3.39%
Disclosure: Long PM, JNJ, PG, PEP