Investing in dividend stocks can provide a valuable cushion in times of stock market volatility. At Extreme Investor Network, we understand the importance of incorporating dividend investing into your portfolio strategy. While many investors may focus on high payout dividends or companies with a history of consistently raising dividends, our approach goes beyond the surface level.
Founder and chief investment officer of Capital Wealth Planning, Kevin Simpson, emphasizes the significance of looking at the trend of dividend growth over a five-year horizon and paying attention to valuations. By ensuring that dividends are increasing due to strong earnings growth rather than leverage or borrowing, investors can protect their portfolio from potential share price declines.
Our dividend portfolio aims to earn 2% to 3% and strives to increase its dividend by 10% each year. We believe that this strategy serves as a valuable hedge against inflation, providing investors with consistent growth over time. Here are four dividend stocks that we recommend across different sectors:
1. JPMorgan Chase: With a five-year compound annual dividend growth rate of 10.3% and a forward price-earnings ratio of 12, JPMorgan Chase is a solid investment option in the financial sector. The bank’s strong earnings performance and consistent profit growth make it a reliable choice for dividend investors.
2. Marathon Petroleum: Boasting a 5% five-year compound annual dividend growth rate and healthy cash flow, Marathon Petroleum offers stability and value for investors. With a forward multiple of 11.3, this oil refiner is positioned for continued success as the automotive industry evolves towards electric vehicles.
3. Visa: Despite a lower dividend yield of 0.8%, Visa has been increasing its dividend by approximately 17% over the past five years. As a global brand with strong growth potential, Visa presents an attractive investment opportunity with a forward P/E of 26.
4. Microsoft: With a five-year compound annual dividend growth rate of 10.5% and a forward P/E of 36, Microsoft is a leading player in the artificial intelligence sector. Although the stock may not be considered cheap by traditional metrics, its powerful earnings growth and innovative business model make it a compelling choice for investors.
At Extreme Investor Network, we prioritize thorough research and analysis to identify top-performing dividend stocks across various sectors. By focusing on dividend growth trends and valuations, we help investors build a resilient and profitable portfolio. Stay ahead of market volatility with our expert insights and recommendations on dividend investing.
