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Introducing the Young Aristocrats!
Published about 2 years ago • 3 min read
Presented By: Ramit Sethi's IWT
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"The way to make money with dividends is NOT to buy stocks that pay the highest dividend."
It goes hand in hand with what got me to sell out of AT&T (T) and Verizon (VZ). They're very mature and slowly growing, both the company and their dividends.
30Y Total return
Check out the 30-year total return chart, which includes all investment returns such as stock price and dividends; we see that AT&T and Verizon have been relatively flat (400% & 104%, respectively) while the S&P500 has surged over 1,000%.
This shows why it's important to not just focus on high dividends but also consider total returns.
J.C. Parets touts the "Young Aristocrat" stocks, which have raised dividends for 5-9 years straight and show strong market performance.
This makes them attractive to investors looking for future blue-chip companies.
And the best part is that he's holding this FREE PDF hostage in exchange for your email address.
Young aristocrats from AllStarCharts.com
There are currently 40 such dividend-paying companies on the list, and one that's popped onto my radar recently is eBay (EBAY).
SeekingAlpha.com
It's had quite the pullback since 2021, but on a total return basis, it is neck and neck with the S&P500. Plus, it currently has a 1.91% dividend yield with a 30% 5-year CAGR (compound annual growth rate.)
I'm not affiliated with J.C. Parets or AllStarCharts.com, but I thought this was a pretty cool idea and list.
It's a great reminder that if you have many years ahead of you before needing dividend income to live, finding the future blue chips and getting in early can be huge.
His theory is that if a company has paid a growing dividend for 5-9 years, then it's doing something right because it consistently has excess cash.
Focusing on these types of companies might catch a few dividend gems flying under most investors' radar.
Remember that this is just one perspective and not financial advice.
I'd love it if you'd share with me what one of your "young aristocrat" stocks might be by hitting reply.
😁THANK YOU to everyone who responded to the last newsletter!!
And now, here is this week's portfolio activity...
Dividends Received ~$0😔
Dividends Received Year to Date~
$4,330.45
Source: Charles Schwab
Stocks Sold (AVERAGE)
8 Schwab US Large Cap Growth ETF (SCHG) | $92.92 ~We are selling off SCHG because there's heavy overlap with our (DFUSX) position, accounting for 14% of our net investment portfolio. We are buying more Visa with the funds.
Stocks Bought (AVERAGE)
1 Nexstar Media (NXST) 9/20/24 $195 Call | $70.66 ~We bought back our covered call to close it out. Our total profit was $326.67 ($397.33-70.66), good for an 82% return in 13 days. Nexstar has been rangebound this year in the low $150's to the low $180's and this is still holding true.
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Each week you'll learn how to be a better dividend investor and follow the journey of a welder with a passion for passive income to $1,000,000 and beyond.
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