Many dividend investors find some security in a high yield. But we will show you another perspective during this episode. Ignoring companies with a yield below 1% is a big mistake and we’ll explain to you why. Then, we will share concrete examples of low-yielding dividend stocks that should not be ignored. Ever heard of Apple, Canadian Pacific, or Nike?
- There are two different common profiles among dividend stocks: high yield, low growth, and high growth, low yield. One could think stability vs volatility, but also income vs higher total returns… or Canadian Utilities vs Alimentation Couche-Tard. Which one do you think is better?
- Having a higher yield in a portfolio is great. However, the current market makes them harder (and riskier) to find. There are not many reasons to pay a high yield these days.
- Inflation is another good reason to not ignore low-yielding stocks. Companies with low yield high growth will generally continue to generate growth even during the high inflation period.
- A yield below 1% is almost like a non-dividend stock. So what are the advantages of low yield stocks over non-dividend equities? The answer is in the metrics!
- There are many companies in the Technology sector that show low yield and high growth. Learn more about AAPL, MSFT, V, and MA.
- In the Consumer Staples sector, we can think of Church & Dwight, Costco, and Alimentation Couche-Tard which are safe and stable businesses.
- The brand power of Nike, and the almost perfect dividend triangle of Park Lawn Corp should not be ignored.
- In case we didn’t have enough, three other companies prove that a yield below 1% should not be ignored by investors: Brookfield Asset Management, Canadian Pacific and Franco-Nevada.
Inflation has been rising for many months now. How will it continue to impact you and your portfolio? From a look back in history to which sectors or stocks can benefit from the situation, here’s everything you need to know about inflation!
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This podcast episode has been provided by Dividend Stocks Rock.