In my previous posts, I tried to determine which stock from each of eight different industries is the most attractive for dividend-seeking investors.
In this article, I created a diversified portfolio, which includes the most attractive stock for dividend investors from each industry. Diversification helps investors to reduce risks. In my opinion, long-term investing in this portfolio will reward the investor a nice income with a good chance of capital gain.
I consider that besides dividend yield, the consistency and the rate of raising dividend payments are the most important factors for dividend-seeking investors. Investing in companies that regularly raise dividends provides security in an uncertain market and means higher returns ahead.
My eight best diversified stocks for dividend investors from the eight different industries are: ConocoPhillips (NYSE:COP), Johnson & Johnson (NYSE:JNJ), Lorillard, Inc. (NYSE:LO), BHP Billiton Limited (NYSE:BHP), Lockheed Martin Corporation (NYSE:LMT), Intel Corporation (NASDAQ:INTC), AT&T, Inc. (NYSE:T) and CA Technologies (NASDAQ:CA). All the data for this article were taken from Yahoo Finance and finviz.com on April 03, before the market open.
The table below presents my eight best stocks for dividend investors, their last price, the forward annual dividend rate, the forward yield, the payout ratio and the average annual dividend rate of growth for the past five and 10 years.
The average forward dividend yield of this portfolio is quite high at 4.24%, and the average payout ratio is at 62%. The average annual dividend growth for the past five years was very high at 15.60% and for the past 10 years was also very high at 18.18%.
The charts below present the dividend yield, the payout ratio and the average annual dividend rate of growth for the past five and 10 years, for the eight companies.
INTC Dividend data by YCharts
COP Dividend Yield data by YCharts
INTC Dividend Yield data by YCharts
COP data by YCharts
INTC data by YCharts
The table and the charts below present the trailing P/E, the forward P/E, the average annual earnings growth estimates for the next 5 years and the price-to-sales ratio for the eight companies.
As diversification helps investors to reduce risks, I decided to build a portfolio of eight companies from eight different industries. This portfolio's size is not too big to control and it gives quite a good diversification.
Each one of the eight companies in this portfolio is in my opinion, the best choice among the companies I reviewed in each industry for dividend-seeking investors, due to its high yield, high rate of raising dividend payment, and its compelling valuation metrics.
The average forward dividend yield of this portfolio is quite high at 4.24%. The average annual dividend growth for the past five years was very high at 15.60% and for the past 10 years was also very high at 18.18%. Companies that regularly increase dividends are generally more stable. Increasing dividends is the assurance that dividend income retains its purchasing power over time.
The reason I consider these eight companies as my best stocks for dividend investors from the eight different industries can be found in my previous articles, each article is devoted to one different industry.
In my opinion, long-term investing in this portfolio will reward the investor a nice income with a good chance of capital gain.
Disclosure: I am long CA, INTC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.