The great investors know this. Consider Warren Buffett's famous quote, 'We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful'. How do we overcome our natural instincts to sell when we should be buying?
ConfidenceFirst, we must follow a process we are 100% confident in. Doubt is the gateway to destructive behavior. Many approaches have proven successful over time. I have chosen income investing, primarily through individual Dividend Growth Stocks. How do we become so confident in a process that we are willing to trust our life's savings to as the world crumbles around us?
ExperienceConfidence comes from knowledge and experience. We must study our approach and understand the process. It is easy for me to watch stock prices crater knowing that it is not only providing an excellent entry point for future capital appreciation, but also higher current yields that will grow each year as the companies continue to raise their dividends. Knowing how it works is good, but comfort in the process comes from having been there before and experiencing the gains after coming out of a downturn.
QualityFinally, the most important step is selecting great investments. For me, those are good solid dividend companies that have a proven track record of increasing their dividends and the financial ability to continue doing so in the future.
Below are seven companies that are leaders in their industry and have increased dividends for more than 30 consecutive years for your consideration:
Lowe's Companies, Inc. (LOW) sells retail building materials and supplies, lumber, hardware and appliances through more than 1,700 stores in the U.S. and Canada. The company has paid a cash dividend to shareholders every year since 1961 and has increased its dividend payments for 50 consecutive years. Yield: 2.3%
Wal-Mart Stores, Inc. (WMT) is the largest retailer in North America,Wal-Mart operates a chain of discount department stores, wholesale clubs, and combination discount stores and supermarkets. The company has paid a cash dividend to shareholders every year since 1973 and has increased its dividend payments for 38 consecutive years. Yield: 2.3%
Colgate-Palmolive Company (CL) is a major consumer products company that markets oral, personal and household care and pet nutrition products in more than 200 countries and territories. The company has paid a cash dividend to shareholders every year since 1895 and has increased its dividend payments for 49 consecutive years. Yield: 2.5%
3M Co. (MMM) is a diversified global company that provides enhanced product functionality in electronics, health care, industrial, consumer, office, elecommunications, safety & security and other markets via coatings, sealants, adhesives, and other chemical additives. The company has paid a cash dividend to shareholders every year since 1916 and has increased its dividend payments for 54 consecutive years. Yield: 2.7%
PepsiCo, Inc. (PEP) is a major international producer of branded beverage and snack food products. The company has paid a cash dividend to shareholders every year since 1952 and has increased its dividend payments for 40 consecutive years. Yield: 2.7%
Genuine Parts Co. (GPC) is a leading wholesale distributor of automotive replacement parts, industrial parts and supplies, and office products. The company has paid a cash dividend to shareholders every year since 1948 and has increased its dividend payments for 56 consecutive years. Yield: 3.2%
Emerson Electric Co. (EMR) designs and supplies product technology, and delivers engineering services and solutions to a wide range of industrial, commercial, and consumer markets around the world. The company has paid a cash dividend to shareholders every year since 1947 and has increased its dividend payments for 56 consecutive years. Yield: 3.4%
Each of the above companies has a proven business model that has allowed them to excel in the good times, and more importantly, seen them through tough economic times. Sure, some companies that have been cornerstones for decades may slip, that's part of investing, but there are always great companies ready to step in and fill the void. It is easy to be confident and secure when you invest in the best dividend stocks in the world!
Full Disclosure: Long WMT, CL, MMM, PEP, GPC, EMR. See a list of all my dividend growth holdings here.
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