You Don't Have to Pick a Winner in Dividend Stocks -- Here's Why
I love dividend stocks and pretty much always have. One thing I've learned over my decades of buying them, however, is that often, it is better to look for "losers" than "winners." Some investors don't want to put in the effort that I do, but that's fine. You can still own dividend stocks by purchasing mutual funds and exchange-traded funds (ETFs) that focus on dividend payers.
In other words, there are plenty of options for investing profitably in dividend stocks.
When I'm looking for what I would dub dividend "losers," I start by looking at lists of companies that have increased their payouts annually for long periods of time. At least 10 years is my minimum, but I prefer if a company's streak of dividend hikes puts it into the Dividend King category (50-plus years). From there, I look for companies with historically high yields, which I believe is an indication of a cheaply priced stock. From this (usually small) list, I select investments that I think have long-term appeal. Often, I don't end up buying anything new when I do a search like this and just stick with the portfolio I already own.
Source Fool.com
