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Dividends are going to be on everybody's minds as we look for a mixture of growth and income in these troubled times. Austin Smith of the Motley Fool noted that dividend paying equities are among the best wealth-building vehicles available.We have noted that there are companies offering dividends that they can't really afford to attract buyers and so it's important to find those companies who are both safe and paying dividends.

To test each company's dividend safety and quality, Austin looked at yield, payout ratio, coverage ratio, and five-year dividend growth. That narrowed the list down to:

Company Name

Payout

Ratio %

Dividend Yield

5-Year

Dividend CAGR

Total Debt/Equity

Interest

Coverage Ratio

General Electric (NYSE:GE)

41.1

3.61

(10.3)

385.4

21.7

DuPont (NYSE:DD)

44.0

3.39

2.07

105.4

10.3

Intel (NASDAQ:INTC)

30.8

3.34

13.9

4.59

NM

Procter & Gamble (NYSE:PG)

49.8

3.19

11.3

47.1

22.3

Chevron (NYSE:CVX)

22.1

3.05

9.11

10.8

NM

Source: S&P Capital IQ. NM= not meaningful.

This is definitely a group of equities I would like to measure and track as they can provide stability and income.

We will be comparing them with our dividend ETF benchmark.

Asset Fund in this portfolio
REAL ESTATE (NYSEARCA:ICF) iShares Cohen & Steers Realty Majors
CASH CASH
FIXED INCOME (NYSEARCA:TIP) iShares Barclays TIPS Bond
Emerging Market (NYSEARCA:VWO) Vanguard Emerging Markets Stock ETF
US EQUITY (NYSEARCA:DVY) iShares Dow Jones Select Dividend Index
US EQUITY (NYSEARCA:VIG) Vanguard Dividend Appreciation ETF
INTERNATIONAL EQUITY (NYSEARCA:IDV) iShares Dow Jones Intl Select Div Idx
High Yield Bond (NYSEARCA:HYG) iShares iBoxx $ High Yield Corporate Bd
INTERNATIONAL BONDS (NYSEARCA:EMB) iShares JPMorgan USD Emerg Markets Bond

Portfolio Performance Comparison

Portfolio/Fund Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe
Retirement Income ETFs Tactical Asset Allocation Moderate 1% 9% 9% 72% 8% 55%
The Safest and Best Dividends on the Dow 12% 52% 21% 91% 5% 15%
Retirement Income ETFs Strategic Asset Allocation Moderate 1% 6% 16% 98% 2% 7%

This is a selection of five large cap U.S. stocks and so it should only represent a portion of an overall portfolio. Having said that, I like this filter. It is large cap and has dividends and is based on companies who should be able to sustain their payout ratios. In today's turbulence, I think this is a selection worth considering.

Three Month Chart One Year Chart Three Year Chart Five Year Chart

The graphs show me that while the large cap stocks have managed to match the more actively traded ETF portfolio with less work, there has been noticeable improvement as the sentiment shifted to safety and dividends. I don't see that underlying sentiment changing in the short term

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Disclaimer: MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.

Source: The Safest And Best Dividends On The Dow