My favorite saying is: “The best time to plant a tree was 20 years ago. The second best time is today.”
You do not need to be a mathematician to understand that a small seed can turn into a mighty oak, provided you allow it enough time to grow.
The seeds I am planting represent money I invest in solid blue-chip stocks, which are available at attractive valuations. Those companies will compound my dividend income, and I will further magnify this effect by strategically reinvesting those dividends into shares of more quality companies, paying me even more in dividend income.
Share prices are finally starting to go down. Here are ten dividend stocks to buy that have the potential to really make your money grow:
Aflac (AFL) provides supplemental health and life insurance products. Aflac operates through two segments, Aflac Japan and Aflac U.S.
Aflac has boosted distributions for 31 consecutive years and at a rate of 8.10% per year in the past five years. Currently, AFL stock sells for 9.3 times forward earnings and a yield of 2.6%. Check my analysis of Aflac.
Baxter International (BAX) develops, manufactures and markets products for people with hemophilia, immune disorders, infectious diseases, kidney diseases, trauma and other chronic and acute medical conditions.
Baxter has increased distributions for eight consecutive years. Baxter has managed to increase those dividends at a rate of 16.4% per year in the past five years. Currently, BAX stock sells for 14.1 times forward earnings and a yield of 2.9%. Check my analysis of Baxter.
The Chubb Corporation (CB) provides property and casualty insurance to businesses and individuals. The Chubb Corporation has boosted distributions for 32 consecutive years. The Chubb Corporation has managed to increase those dividends at a rate of 6.2% per year in the past five years.
Currently, CB stock sells for 13.2 times forward earnings and a yield of 2.2%. Given the fact that Chubb consistently buys back shares, the decline in CB stock price is actually good for earnings-per-share. Check my analysis of Chubb.
ConocoPhillips (COP) explores, develops and produces crude oil, bitumen, natural gas, liquefied natural gas and natural gas liquids worldwide. ConocoPhillips has managed to boost distributions for 14 consecutive years and has managed to increase those dividends at a rate of 13.3% per year in the past five years.
Currently, COP stock sells for 11.6 times forward earnings and a yield of 3.9%. Check my analysis of ConocoPhillips.
Deere & Company (DE) manufactures and distributes agriculture, turf, construction and forestry equipment worldwide. Deere & Company has managed to boost distributions for 11 years in a row. The five year dividend growth rate is 13.4% per year.
Currently, Deere sells for 9.8 times estimated current year’s earnings, and yields 2.9%. However, DE is possibly undervalued. I am buying DE stock at the top of the cycle, when earnings are highest.
Deere is expected to earn much lower profits in 2015, leading to a still cheap 12.2 times forward 2015 earnings. Either way, of the ten companies listed here, DE is the lowest conviction for me. My next purchase would likely be on dips to price levels close to $60 – $70 per share. Check my analysis of Deere.
Diageo (DEO) manufactures and distributes premium drinks and has managed to raise distributions for over 15 years. Diageo has increased those dividends in local currency at a rate of 5.8% per year in the past decade. Currently, DEO stock sells for 16.9 times forward earnings and a yield of 3.1%. Check my analysis of Diageo.
Eaton Corporation (ETN) operates as a power management company worldwide. Eaton has increased distributions for five consecutive years at a rate of 10.9% per year. Currently, ETN stock sells for 13.8 times forward earnings and a yield of 3.1%.
Exxon Mobil (XOM) explores and produces crude oil and natural gas. Exxon Mobil has boost distributions for 32 consecutive years and at a rate of 9.7% per year in the past five years.
Currently, XOM stock sells for 12.2 times forward earnings and a yield of 3%. Given the fact that Exxon Mobil consistently buys back shares, the decline in XOM stock price is actually good for EPD. Check my analysis of Exxon Mobil.
General Mills (GIS) manufactures and markets branded consumer foods in the U.S. and internationally. General Mills has grown distributions for 11 consecutive years and at a rate of 11.5% per year in the past five years.
Currently, GIS stock sells for 16.9 times forward earnings and a yield of 3.3%. Check my analysis of General Mills.
Philip Morris International (PM) manufactures and sells cigarettes and other tobacco products. Philip Morris has boosted distributions for six consecutive years and has managed to increase those dividends at a rate of 11.7% per year in the past five years.
Currently, PM stock sells for 16.5 times forward earnings and a yield of 4.8%. Check my analysis of Philip Morris International.
Full Disclosure: I have a position in all companies mentioned.
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