At the time of the initial study, he assumed the portfolio was held in a tax-deferred account and was evenly split between large-company stocks and U.S. Treasury bonds. In a subsequent study he revised the withdrawal rate to 4.5%. The higher rate was supported by adding U.S. small-company stocks to the portfolio. This increased the portfolio's potential return, and also increased its volatility
Bengen notes that people who retired in 2000 are of the greatest concern. Since retiring, they have endured two major bear markets. The next five years will be critical for this group. A surge of inflation above its historical average of 3 percent, could derail the 4% rule for this group.
You have to be able to survive worst-case scenarios. There is a better way...
Instead of eating away at your principle, why not live off the fruit of your portfolio. The best way to do that is with a hand-selected portfolio of dividend growth stocks. Not only will you receive an annual income, but it will grow each year.
This week week, I screened my Dividend Growth Stocks database for select stocks with a minimum 3% dividend growth rate and yield of 4% or more. The results are presented below:
Southern Company (SO) is an Atlanta-based energy holding company and is one of the largest producers of electricity in the U.S.
Yield: 4.2% | Dividend Growth: 3.2%
Westwood Holdings Inc. (WHG) provides investment advisory services to a wide range of institutional clients, and also provides trust and custodial services.
Yield: 4.5% | Dividend Growth: 9.3%
National Health Investors (NHI) is a real estate investment trust that invests in income-producing health care properties primarily in the long-term care industry.
Yield: 4.5% | Dividend Growth: 5.9%
Magellan Midstream Partners LP (MMP) is engaged in the transportation, storage and distribution of refined petroleum products primarily through its 9,600-mile pipeline system.
Yield: 4.7% | Dividend Growth: 10.7%
Enterprise Products Partners LP (EPD) is an integrated provider of natural gas and natural gas liquids services, including processing, fractionation, storage, transportation and terminalling.
Yield: 5.9% | Dividend Growth: 5.3%
Omega Healthcare Investors Inc. (OHI) is a real estate investment trust (REIT) that invests in income-producing healthcare facilities, mainly long-term care facilities located in the United States.
Yield: 6.6% | Dividend Growth: 4.1%
TC PipeLines LP (TCP) has interests in over 5,550 interstate natural gas pipelines, including a 46.5% stake in Great Lakes Gas Transmission L.P.
Yield: 6.6% | Dividend Growth: 3.6%
Buckeye Partners LP (BPL) is one of the largest independent U.S. pipeline common carriers of refined petroleum products, with over 6,000 miles of pipeline.
Yield: 6.8% | Dividend Growth: 3.4%
Sunoco Logistics Partners (SXL) is a master limited partnership (MLP) that was formed by Sunoco Inc. to acquire, own and operate a group of refined product and crude oil pipelines and terminal facilities.
Yield: 6.8% | Dividend Growth: 14.7%
As with past screens, the data presented above is in its raw form. Some of the the companies would be disqualified for poor dividend fundamentals. However some of the others may be worth additional due diligence.
My database, D4L-Data, is an Open Office spreadsheet containing more than 20 columns of information on the 250+ companies that I track. The data is sortable and has built-in buttons and macros to make it easy to use. Companies included in the list are those that have had a history of dividend growth. The D4L-Data spreadsheet is a part of D4L-Premium Services and is updated each Saturday for subscribers.
Full Disclosure: Long SO, NHI, OHI. See a list of all my Dividend Growth Portfolio holdings here.
- 10 Dividend Stocks Building A Growing Cash Stream
- How To Build A Sustainable High Yield Portfolio
- How To Buy Dividend Stocks At The Bottom
- 10 Stocks That Have Paid Dividends Since The 1800s
- Are You Patient Enough To Be Wealthy? These 7 Dividend Stocks Will Help You Wait
Sources: Wall Street Journal, Yahoo Finance, Wikipedia
Tags: SO, WHG, NHI, MMP, EPD, OHI, TCP, BPL, SXL,