by Dividend Growth Investor | August 20, 2014 9:23 am
Warren Buffett is the most successful stock investor in the world. Warren Buffett’s first $20 million came from running a hedge-fund-like investment partnership in the 1950’s and 1960’s, and his earlier cigar-butt investments produced large gains initially. However, the lessons Warren Buffett learned from See’s Candies’ branding and the competitive advantages of Berkshire Insurance and newspaper companies led him from cigar-butts to the dividend investing that made him so astronomically wealthy.
Dividend investors can follow Warren Buffett’s example and purchase dividend growth stocks at attractive valuations. Here are some of the most widely-held dividend stocks to buy:
McDonald’s (MCD[1]) is a dividend, champion having increased dividends for 38 years in a row now. McDonald’s has a 10-year average dividend growth rate of 22.8% per year. Currently, MCD stock is selling for 17 times forward earnings and yields 3.2%. Here’s an analysis of McDonald’s.
Walmart (WMT[2]) has increased dividends for 41 years in a row. Walmart’s 10-year average dividend growth rate is 18% per year. Currently, WMT is selling for 14.8 times forward earnings and yields 2.5%. Read this analysis of Walmart.
Philip Morris International (PM[3]) manufactures and sells cigarettes and other tobacco products. PM is another dividend champion and has increased dividends for six years in a row. Philip Morris has a five-year average dividend growth rate of 14% per year. PM stock is currently selling for 16.5 times forward earnings and yields 4.1%. Here’s my analysis of PM.
IBM (IBM[4]) has increased dividends for 19 years in a row and has a 10-year average dividend growth rate of 19.4% per year. Currently, IBM stock is selling for 10.6 times forward earnings and yields 2.4%. Read my analysis of IBM.
Exxon Mobile (XOM[5]) is our final dividend champion, which has increased dividends for 32 years in a row. Exxon has a 10-year average dividend growth rate of 9.6% per year. Currently, XOM stock is selling for 12.8 times forward earnings and yields 2.7%. Read my analysis of Exxon Mobil.
Full Disclosure: Long MCD, KO, WMT, PM
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