As I lie here silently broken, a shell of a man I once was just hours ago before my back decided to give out, I can't help but think about anything other than that hefty dose of Ibuprofen I just took and when it'll begin to take hold. It's times like these in our lives that really allow us to appreciate good health, am I right? Boy, am I getting old.
Luckily I've been secretly stockpiling a collection of dividend-paying stocks over the past few years, which I hope will assist me and my handicapped back later on in life. As I explained in a recent article Why I Choose To Collect My Dividends As Cash, last year I received $1,337 in passive dividend income, which I reinvested and I expect to handily break the $1,500 mark in 2012. Where will my dividend stream be when I'm lying on my back waiting for my anti-inflammatory drug to take hold in 2065? I suppose the best we can do is guess at this point, but with the power of compounding -- alongside my power to aggressively save a significant portion of my salary -- will likely help aid my medical needs later on in life. Oh, and consistent rising dividend streams from faithful dividend-paying companies don't hurt, either.
Over the last few years, I've scoured Wall Street in hopes of finding companies that pay a sizable dividend in which I can reinvest. Lucky for me, I've actually found more companies to invest in than I have capital for, allowing me to make some tough choices, which required a good amount of research and legwork. Today I present to you some of my favorite companies, which have rewarded me generously to simply hold shares of their stock.
Exxon Mobil (XOM). Sure, Warren Buffett and a host of other prominent financial figures are selling the stock and the sentiment regarding this oil giant has recently and quickly turned sour in many cases. However, if I've learned anything since I began investing, it's that following the herd isn't necessarily a useful tool in all cases. Sometimes when stocks fall out of favor, even by the most seasoned investors, it can present a buying opportunity. Exxon Mobil, a company that needs little introduction, currently sports a 2.2% dividend yield. Over the last decade, XOM has increased its quarterly dividend payouts by about 100% in addition to a massive share buyback program, which indicates to me its willingness to reward dividend investors faithfully. Though I'm not currently adding to my holdings of XOM, I certainly am not in the market to sell either and look forward to purchasing additional shares of this reputable and profitable company with pending share price dips.
PepsiCo, Inc. (PEP). A recent article on NPR.org entitled Still Hungry? Have a 'Second Breakfast' explores the interesting trend that Americans are moving away from the traditional "three square meal" approach and have begun snacking throughout the day in order to save more time and possibly become healthier. If this is indeed a long-term American trend -- which could possibly spread to other developed countries out there as well -- it might be argued that companies such as PepsiCo would benefit. PEP's boasting a 3.3% dividend yield and has raised its quarterly dividend payout by about 250% over the last decade. Personally, I think PEP is poised to perform long-term and I feel comfortable picking up shares at current prices with a forward P/E just over 14.
Exelon Corporation (EXC) is a utility services holding company, which has lately been the topic of much debate. I bought in mid 2010 after seeing the share price drop over 50% and the dividend yield push well past 5%. I've written about EXC here at Seeking Alpha in the past and have been "roasted" for my beliefs regarding the company however, despite the revolving negativity, I truly believe EXC will be poised for long-term greatness. The merger with Constellation Energy will create a new powerhouse to be reckoned with. EXC's current 5.3% dividend yield and history of raising quarterly dividend payouts by the tune of 150% over the past decade prove to me the company is in it for the long haul. Though dividend investors may not see many significant dividend increases in the future, the current 5.3% yield provides an exciting opportunity to create long-term wealth for investors.
Sysco Corporation (SYY). There are few companies out there with such staying power and ability to generate consistent, healthy profits for their investors. Chances are, if you've ever gone to restaurant you've likely helped contribute to Sysco's business model. The company secures nearly 1/5 food contracts in the United States and has been raising its dividend faithfully for 42 years. SYY boasts a current dividend yield of 3.7% and though the company doesn't secure the widest margins, it has raised its quarterly dividend payouts by about 200% over the last decade. It's safe to say SYY has staying power in this business and I'd put my money on the fact it'll be around for many decades to come.
Procter & Gamble Company (PG). Being the dominant player in your line of business has proven to be very profitable for shareholders of dividend-paying companies. Since PG commands this status, I for one have been very happy with its ability to generate profits and pass many of them on to us shareholders. Everybody needs toothpaste, household cleaners, toilet paper, laundry detergent and the many other useful products Procter & Gamble produces. Due to this fact, I'm happy to hold on and collect an ever-increasing dividend. PG currently sports a 3.1% dividend yield and has increased its quarterly dividend payouts by about 150% over the last decade. I'm a sucker for solid, moat-oriented companies and Procter & Gamble is as faithful as they come in today's day and age.
Despite being a young guy in his late 20s, I still believe it's important to look to the future for our financial security and to plan for our physical well being during our later years. I'm beginning to build up a core portfolio of solid dividend-paying companies as a quasi-insurance plan for my future and I highly recommend doing the same. It's never too late to start and the sooner we all begin saving for the future, the better off our situations will be.
Now if you'll excuse me, I have an aging back to attend to and a portfolio of solid, dividend-payers to monitor. Best of luck to you all out there.