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How To Select Winning Retail Stocks

Jun. 15, 2016 9:41 AM ETLOW, HD, WMT, TGT, CASY, WBA, SHLDQ
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While I am a buy and hold passive investor, I also try to regularly monitor the companies I own. I usually review the investments I have made once every 12 - 18 months. In addition to that, I often review past decisions I have made, in an effort to improve my investing over time. I also monitor my shareholdings, when they announce a dividend raise.

A couple of weeks ago, Lowe's (LOW) raised its quarterly dividend for 55th consecutive year in a row. The company raised its quarterly dividend by 25%, to 35 cents/share. Lowe's Companies, Inc. operates as a home improvement retailer. It offers products for home maintenance, repair, remodeling, and decorating.

The latest increase extends the company's dividend streak to 55 consecutive years. There are only 18 companies in the world, which have managed to raise dividends for over 50 years in a row. I coined the term "Dividend King" in 2010 to describe companies which have managed to grow dividends for at least 50 years in a row. This is an impressive track record, which is something that smart investors study.

Somehow, I have managed to make a lot of money on Lowe's - the stock has almost quadrupled from my purchasesat the beginning of the decade. I have had a lot of success in other retail stocks, such as Family Dollar (FDO),Casey's (CASY), Walgreens (WBA). Other winning retail investments for dividend investors in the past have been Wal-Mart (WMT) and Target (TGT) and Home Depot (HD). I would discuss a few retail investments I believe could do well over time.

It is possible that I have been lucky beneficiary of the long bull market we have had since the Global Financial Crisis. But I am surprised that I have been making money off retails stocks, despite the common consensus that retailing is a difficult business. After researching winning retail investments I had made I uncovered a few common traits behind success. I believe that those lessons could be helpful to readers, which is the reason I am sharing them with you.

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