The power of dividends�is nothing new to decade-long income investors. Yet, more recently, droves of investors are jumping on the dividend bandwagon, thanks to all-time low savings rates. But not all dividend-paying stocks are created equal.
Looking beyond the Aristocrat status
These two great examples show us that concentrating on one sole metric, like dividend yield, means that we're likely overlooking potential red flags. Instead, a more sustainable strategy is buying dividend stocks that harness both reliable dividend growth and low payout ratios.
Take a look at these three under-the-radar companies. While each of them belongs to the elite S&P 500 Dividend Aristocrats, an exclusive club of blue chips that have boosted their dividends for at least 25 consecutive years, these three are great dividend stocks for other reasons too.
1. VF (NYSE: VFC )
Through economic (and consumer waistline) recessions and expansions, the company behind North Face apparel and 7 For All Mankind jeans has increased its dividend for an impressive 40 years! VF pays a modest 1.9% dividend yield, but don't let that dupe you. The company has increased its dividend by 248% over the past decade, outpacing the Consumer Price Index nearly tenfold.
Top 5 Construction Material Stocks For 2015: Philip Morris International Inc(PM)
Philip Morris International Inc., through its subsidiaries, engages in the manufacture and sale of cigarettes and other tobacco products in markets outside of the United States. Its international product brand line comprises Marlboro, Merit, Parliament, Virginia Slims, L&M, Chesterfield, Bond Street, Lark, Muratti, Next, Philip Morris, and Red & White. The company also offers its products under the A Mild, Dji Sam Soe, and A Hijau in Indonesia; Diana in Italy; Optima and Apollo-Soyuz in the Russian Federation; Morven Gold in Pakistan; Boston in Colombia; Belmont, Canadian Classics, and Number 7 in Canada; Best and Classic in Serbia; f6 in Germany; Delicados in Mexico; Assos in Greece; and Petra in the Czech Republic and Slovakia. It operates primarily in the European Union, Eastern Europe, the Middle East, Africa, Asia, Canada, and Latin America. The company is based in New York, New York.
Advisors' Opinion:- [By Tim Melvin]
Some of the traditionally defensive stocks like Phillip Morris International (PM) and Merck (MRK) also fail our test for operating conditions and financial changes. Yield chasers have also pushed the value of their shares to unsustainable levels, and are unlikely to see much more than mid- to low-single-digit profit growth for several years.
Hot Blue Chip Stocks To Invest In Right Now: Colgate-Palmolive Company(CL)
Colgate-Palmolive Company, together with its subsidiaries, manufactures and markets consumer products worldwide. It offers oral care products, including toothpaste, toothbrushes, and mouth rinses, as well as dental floss and pharmaceutical products for dentists and other oral health professionals; personal care products, such as liquid hand soap, shower gels, bar soaps, deodorants, antiperspirants, shampoos, and conditioners; and home care products comprising laundry and dishwashing detergents, fabric conditioners, household cleaners, bleaches, dishwashing liquids, and oil soaps. The company offers its oral, personal, and home care products under the Colgate Total, Colgate Max Fresh, Colgate 360 Advisors' Opinion:
- [By Laura Brodbeck]
Friday
Earnings Expected From: Bristol-Myers Squibb Company (NYSE: BMY), Colgate-Palmolive Company (NYSE: CL), Cabot Oil & Gas Corporation (NYSE: COG), Ford Motor Company (NYSE: F), Ericsson (NASDAQ: ERIC), Moody’s Corporation (NYSE: MCO), Procter & Gamble Company (NYSE: PG), Shire plc (NASDAQ: SHPG) Economic Releases Expected: German consumer confidence, Italian retail sales, British GDP, U.S. new home salesPosted-In: Earnings News Previews Top Stories Economics Pre-Market Outlook Markets Trading Ideas Best of Benzinga
- [By Dan Caplinger]
Moreover, it's starting to appear that Clorox has weathered a tough part of its business cycle. Throughout the industry, Procter & Gamble (NYSE: PG ) , Colgate-Palmolive (NYSE: CL ) , and Clorox all had to deal with rising costs for the inputs they needed to make their respective products. The companies responded by implementing price-cutting measures and passing on part of their higher costs to their customers. For its part, Clorox was able to expand its gross margins by a full percentage point, with a worse-than-normal flu season contributing to sales. Now that input-cost inflation is easing, P&G and Clorox expect to see better profitability, with growth starting to approach the faster rates that Colgate has enjoyed.
- [By Motley Fool Staff]
Andres Cardenal:�Colgate-Palmolive (NYSE: CL ) , generates most of its sales and cash flows from its leadership position in the oral care industry. Management estimates that the company owns a global market share of 44.4% in toothpastes, 33.2% in toothbrushes, and 38.9% in mouthwashes.
- [By Wallace Witkowski]
Other earnings highlights in the coming week include Dow components McDonald�� Corp. (MCD) , DuPont (DD) , AT&T Inc. (T) , and Procter & Gamble Co. (PG) . Notable S&P 500 companies include Halliburton Co. (HAL) , Netflix Inc. (NFLX) �, Amgen Inc. (AMGN) �, TripAdvisor Inc. (TRIP) �, Amazon.com Inc. (AMZN) �, Colgate-Palmolive Co. (CL) �, Ford Motor Co. (F) �, Dow Chemical Co. (DOW) �, and United Parcel Service Inc. (UPS) �
Hot Blue Chip Stocks To Invest In Right Now: McDonald's Corporation(MCD)
McDonald?s Corporation, together with its subsidiaries, operates as a worldwide foodservice retailer. It franchises and operates McDonald?s restaurants that offer various food items, soft drinks, coffee, and other beverages. As of December 31, 2009, the company operated 32,478 restaurants in 117 countries, of which 26,216 were operated by franchisees; and 6,262 were operated by the company. McDonald?s Corporation was founded in 1948 and is based in Oak Brook, Illinois.
Advisors' Opinion:- [By Gregory Wallace]
Not just one day: Who says there's enough free coffee to last only 24 hours? McDonald's (MCD) has been giving away free coffee for two weeks, an offer that ends after Monday.
- [By Dan Caplinger]
For instance, five years ago, the financial crisis hit banking stocks hard, but it was the overall recessionary conditions that helped bring the entire market down. Some companies, though, made the most of the recession and gained ground. McDonald's (NYSE: MCD ) , for instance, benefited from the move away from more expensive casual restaurants, meeting customers' needs with expanded menu offerings that still offered solid value for those who'd moved down from other eating-out options. Similarly, Family Dollar (NYSE: FDO ) and several other deep-discount retailers poached business from higher-cost alternatives as households cut their budgets.
- [By Travis Hoium]
In more positive news, McDonald's (NYSE: MCD ) is up 0.7% after announcing a $1 billion update to its stores. The makeover will impact 1,600 stores this year and is an effort to stay fresh in a highly competitive fast-food environment. McDonald's recently said the new and improved look could boost sales by 6% to 7% immediately after it's completed, so the financial drive is there. This is another reason McDonald's is a solid stock to own: It's willing to adapt to consumer tastes in the fast-food space.
Hot Blue Chip Stocks To Invest In Right Now: Apple Inc.(AAPL)
Apple Inc., together with subsidiaries, designs, manufactures, and markets personal computers, mobile communication and media devices, and portable digital music players, as well as sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. The company sells its products worldwide through its online stores, retail stores, direct sales force, third-party wholesalers, resellers, and value-added resellers. In addition, it sells third-party Mac, iPhone, iPad, and iPod compatible products, including application software, printers, storage devices, speakers, headphones, and other accessories and peripherals through its online and retail stores; and digital content and applications through the iTunes Store. The company sells its products to consumer, small and mid-sized business, education, enterprise, government, and creative markets. As of September 25, 2010, it had 317 retail stores, including 233 stores in the United States and 84 stores internationally. The company, formerly known as Apple Computer, Inc., was founded in 1976 and is headquartered in Cupertino, California.
Advisors' Opinion:- [By Evan Niu, CFA]
After years of speculation, software giant Microsoft (NASDAQ: MSFT ) has launched a mobile version of its flagship Office productivity software suite for Apple's (NASDAQ: AAPL ) iPhone.
- [By Daniel Sparks]
There were definitely many interesting comments from�Apple� (NASDAQ: AAPL ) CEO Tim Cook at the All Things Digital conference this week. As usual, Cook mostly kept a lid on specifics. The highlights came from several vague references and hints he made. In the video below, Fool contributor Daniel Sparks outlines the three biggest hints leaked during the interview.
- [By Daisuke Wakabayashi]
A long-running streak is in jeopardy when Apple(AAPL) reports fiscal second-quarter financial results Wednesday: It�� been 11 years since the company reported a year-over-year decline in quarterly revenue.
- [By Chris Neiger]
The iPad launched three years ago yesterday, and it was a monumental day in the short history of tablet computers. Apple investors have been on a wild ride since 2010, but let's take a look at how one of Apple's (NASDAQ: AAPL ) most innovative products has fared over the past few years.
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