Ask a Fool: How can I find worry-free dividend stocks after retirement?

First of all, you're making the right move by getting back into stocks. Although retirees should have less exposure to equities than say, a 35-year-old, stocks are an important component of a well-rounded portfolio for investors of any age.This is especially true for dividend stocks, which can provide retirees with growing income streams, as well as capital appreciation to help keep up with inflation.So how do you find the right kind of dividend stocks for retirees?First, narrow your search to companies with dividend yields that are at least the market average – let's say 2% or higher. Anything lower and it's tough to call it an "income stock."Next, look for companies with well-established track records of dividend increase and no dividend cuts. This doesn't guarantee that they will keep following that pattern of behavior, but it makes it more likely. The S&P High Yield Dividend Aristocrats index, which contains more than 100 dividend stocks that have increased their payouts for at least 20 consecutive years, is a good place to start your search.AT&T (NYSE: T) is one of my favorite examples. The telecom giant yields 5.1% and has increased its annual payout for 32 consecutive years, thanks to its steady, utility-like income stream. Net-lease real estate investment trust National Retail Properties (NYSE: NNN), with its 4.4% yield and 28-year dividend-increase streak, is another good option.Or, if you don't want to engage in the heavy lifting of choosing individual stocks, the Vanguard High Dividend Yield Index Fund ETF (NYSEMKT: VYM) is a low-cost fund that invests in all the stocks in the index, offering you both dividends and diversification. More: Ask a Fool: What are the smartest year-end tax moves for investors? More: Ask a Fool: Are target-date retirement funds right for me? More: Ask a Fool: Can I still take the IRA deduction in 2018? Matthew Frankel owns shares of AT&T. The Motley Fool has no Continue Reading

3 Top Tech Dividend Stocks to Buy Now

The tech sector didn't used to be a great place to look if you were on the hunt for high yield. That's changed as some companies have matured and shifted into periods of slower growth, and investors now have a range of tech dividend stocks to choose from. In addition to offering investors dependable returned income, some of these companies also have underappreciated business prospects and beaten-down valuations -- setting up dynamics that could pave the way for substantial capital appreciation on top of regular income generation. Here's why IBM (NYSE: IBM), AT&T (NYSE: T), and Seagate Technology (NASDAQ: STX) are top income-generating stocks in the tech sector. Image source: Getty Images. IBM With a 3.9% yield and a 22-year history of annual payout increases, IBM has one of the best returned-income profiles in the tech sector. The stock also looks pretty cheap trading at roughly 11 times forward earnings estimates and 13 times trailing free cash flow. Those are attractive characteristics, to be sure, but they don't exist in a vacuum. With a 22-quarter streak of consecutive year-over-year sales declines and trailing revenues at a 15-year low, there are valid reasons why the market has been cool on Big Blue. Shares have lost roughly 8% of their value in 2017 while the S&P 500 index has gained nearly 20%. Even so, the stock looks like a good play for investors who are willing to take on the risk profile that comes with its shift to new businesses. There are some compelling indicators that its turnaround effort has the company poised for a rebound. Last quarter saw its combined cloud, security, data analytics, and mobile businesses grow revenues 11% and comprise 45% of total sales. Meanwhile, its legacy hardware and software services businesses declined roughly 8%. The company's cloud services have tallied up $15.8 billion in sales over the trailing-12-month period, and a favorable growth outlook for the overall cloud infrastructure and platform Continue Reading

3 Top Dividend Stocks for 2018

In the last few years, investors have found that some dividend stocks weren't as stable as they once seemed. Plunging energy prices forced once safe dividend stocks like Seadrill and Kinder Morgan to cut their dividends and Seadrill eventually went bankrupt. Even the once impenetrable General Electric had to slash its dividend in 2017. There are solid dividends available to investors and some have extremely high yields. Some of my favorites are yieldcos, or companies who own renewable energy assets that have contracted cash flows years, sometimes decades, into the future. Pattern Energy (NASDAQ: PEGI), Brookfield Renewable Partners (NYSE: BEP), and 8point3 Energy Partners (NASDAQ: CAFD) are from different parts of the renewable industry sector but they all have top dividends that investors shouldn't ignore. Image source: Getty Images. Pattern Energy Wind energy is one of the fastest growing energy sources in the U.S. and Pattern Energy owns wind turbines in the U.S., Canada, and Chile that provide consistent cash flows to investors. It currently has 19 wind farms in operation and one under construction with a total of 2,736 MW of generating capacity. The average power purchase agreement backing those projects is over 14 years with investment grade off-takers. There should be significant growth ahead for Pattern Energy with a $1 billion new capital commitment for its development arm called Pattern Development 2.0. There's as much as 10 GW of potential pipeline for the company, which could keep the dividend growing for years. Pattern Energy's 7.8% dividend yield is among the highest in the yieldco space and while that might be a deterrent to growth -- because yieldcos issue stock to buy projects and a high dividend raises the cost of capital -- the worst case scenario is that investors just collect a lofty dividend for more than a decade. The upside scenario is that Pattern Energy is able to grow its dividend, pushing the stock higher, making it easier Continue Reading

3 Top Dividend Stocks With Yields Over 5%

It's been shown that dividend-paying stocks outperform non-dividend paying stocks, but not just any dividend stock deserves a spot in your portfolio. Investing in high dividend-paying stocks can be especially tricky because sometimes, high yields are the result of struggles that are weighing down shares prices. To help investors avoid the risk of buying a high-yield stock at the wrong time, we asked three Motley Fool investors what stocks are on their radar for income portfolios. In their view, the time is right to buy Baldwin & Lyons (NASDAQ: BWINB), HCP, Inc. (NYSE: HCP), and AT&T Inc. (NYSE: T) A specialty insurer on sale Continue Reading Below Todd Campbell (Baldwin & Lyons): OK. You got me. I rounded up. Baldwin & Lyons' dividend yield of 4.8% is a little below the 5% cut off, but there's a reason I think this small-cap dividend stock could be a good fit for income investors willing to take on some risk. Here's what I like about it. Baldwin & Lyons is a property & casualty insurer that's been around since 1930. Its insurance products focus on the transportation industry, including buses and commercial trucking. It also offers worker's compensation insurance. The company's been expanding its distribution strategy, and that's translating into more policies being written. It's also earning more money on its investment portfolio because of rising interest rates. Its gross premiums written increased 37.5% year over year to $144.2 million in Q4 2017, and in 2017, it's full-year EPS was $1.21. As a reminder, while insurers wait to pay out claims, they pocket dividends and gains on investments made with their premium revenue. Since interest rates on short-term bonds climb as the Fed hikes rates and the company writes more business, the current environment should offer some profit-friendly tailwinds. For instance, net investment income increased 42% in Q4 2017 from Q4 2016 and it grew 25% year over year for the full year 2017. An argument can Continue Reading

3 Unknown but Amazing Dividend Stocks

Dividend payers come in all sizes and from all industries. However, the quality makes some stand out from the crowd is their ability to grow their payouts consistently. Not only do such companies provide shareholders with ever-increasing income streams, but dividend growth stocks have historically outperformed their stingier peers. That's why we're always on the lookout for companies that pay a growing dividend -- because they can do such a good job of creating wealth for investors over the long term.Three stocks that have this quality -- yet remain unknown to most investors -- are Holly Energy Partners (NYSE: HEP), Mercury General (NYSE: MCY), and FactSet Research Systems (NYSE: FDS). Here's a look at why we think this under-the-radar trio will keep rewarding shareholders in the years to come.Image source: Getty Images.53 in a row with more to goMatt DiLallo (Holly Energy Partners): Relatively few investors have heard of Holly Energy Partners, the pipeline and storage MLP created by refiner HollyFrontier. Because of that, they've missed out on a dividend growth stock that recently announced its 53rd consecutive payout increase. In fact, this incredible dividend stock has raised its distribution every single quarter since it went public in 2004.Holly Energy Partners has at least a few more increases left in the tank. It recently confirmed plans to boost its payout another 4% in 2018, fueled by two pipeline acquisitions it made late last year. That said, this year's increases are coming at a slower pace than 2017's 7% raise, and will give the company a tight coverage level of about 1.0 times cash flow. However, that's due to some recent strategic initiatives that set it up to grow in the coming years. For example, the company recently raised $110 million of new equity to pay down debt, which is a near-term headwind, but will increase its flexibility to pursue growth opportunities in the future.In fact, the company already announced plans to expand its newly acquired Continue Reading

5 Facts About High-Yield Dividend Stocks Every Investor Should Know

It can be tempting to jump right into a high-yield dividend investment. The prospect of receiving a high (and potentially continuing) income stream might convince you to take much more risk with your money than you're really comfortable doing. High-yield stocks can be a minefield that destroys your capital. Yields that are too high are frequently a sign of a company in major distress -- and of a dividend that's not sustainable. Still, done intelligently, investing in companies with decent distribution payouts can be a lucrative proposition, despite the risks. If you're going to venture down that path, however, there are five essential facts about high-yield dividend stocks that you should know. Real estate investment trusts (REITs) are required by law to pay out 90% of their income as dividends in order to retain the corporate tax advantages associated with being that kind of company. Key among those advantages: REITs can deduct their dividends as an expense, thus avoiding corporate taxes on the income they generate by passing that along to their shareholders. The downside to shareholders, however, is that REIT dividends are not qualified and thus are taxed as ordinary income. Many REITs even go beyond that and pay out more than 100% of their income in their distributions. Those excess payments are frequently characterized as either capital gains or return of capital, depending on how the money was generated by the REIT. That portion of shareholders' distributions may receive favorable tax treatment for the recipients compared to ordinary income. Note, however, that those distributions take capital out of the company -- there's no such thing as a free lunch. REITs generally come in two types, equity REITs and mortgage REITs. Equity REITs own physical properties, and mortgage REITs invest in mortgages or Continue Reading

2 Overlooked Dividend Stocks to Buy for 2018

"A stock dividend is something tangible -- it's not an earnings projection; it's something solid, in hand. A stock dividend is a true return on the investment. Everything else is hope and speculation." – Richard Russell. Many investors love owning dividend stocks as they pay shareholders real money at consistent intervals. These companies are often very stable cash-printing machines that offer investors some sense of safety. But without eye-popping dividend yields, some great companies are overlooked, including The Hershey Co. (NYSE: HSY) and Pfizer Inc. (NYSE: PFE), which fall short of the requirements for many dividend watchlists. On Monday, Pfizer made a move its investors are sure to enjoy as it announced a 6% increase to its dividend payment to $0.34 per share. That's a very solid 3.6% dividend yield, even if not an eye-popping 4% to 6% yield that many income investors hunt for. Minus a cut during the past recession, Pfizer's dividend track record is impressive: The first-quarter 2018 dividend will be the 317th consecutive quarterly dividend paid out. But wait, there's more. In addition to the 6% increase to the dividend, Pfizer also announced that the board of directors authorized a new $10 billion share repurchase program in addition to the $6.4 billion remaining under the current authorization. Pfizer's increasing dividend and massive share repurchase program emphasize its commitment to returning value to shareholders, but the company also offers investors a strong business with upside. Pfizer's scale alone offers competitive advantages for developing its pipeline of new drugs, and it has historically generated tons of cash flow from a diverse range of drugs. That pipeline should only get more lucrative for investors as its Xeljanz gains traction in immunology and Ibrance develops into a winner for breast cancer. Continue Reading

Top chart analyst: Dividend stocks look fantastic

Jeff deGraaf, chairman and head technical analyst for Renaissance Macro Research, believes the bottom in yields is not in yet, so investors shouldn't sell their dividend stocks just yet. "I think you go with the bond surrogates," said deGraaf, in response to whether investors should consider rotating into cyclical stocks given the year-to-date rally in yield plays. Since the Brexit vote, the strategist explains that sectors like utilities, telecom, staples and REITs have all consolidated and continue to look "fantastic right here." This year, both telecom and utilities are the top performing sectors in the S&P 500, up more than 15 percent. "I think we are going to go back to, at least more than people anticipate, to this bond surrogate trade," the strategist said, forecasting that bond yields are likely to head lower; therefore increasing the appeal of high-yielding equities. DeGraaf is the best chart analyst on Wall Street over the last decade, according to Institutional Investor magazine. He was formerly the head of the investment policy committee at ISI Group. (Watch his PRO Talks interview here ) In this panel discussion, other CNBC contributors like Stephanie Link and Guy Adami share their thoughts on valuations for these groups along with their investment strategy. Only PRO subscribers have access to the full, lengthy interview, which was originally broadcast on "Closing Bell." Continue Reading

Investing: What is Warren Buffett’s top dividend stock?

Berkshire Hathaway (NYSE: BRK-A)(NYSE: BRK-B) has a portfolio of dozens of common stocks, many of which were hand-picked by CEO Warren Buffett himself. Buffett is a big fan of reliable dividends, so as you may expect, many of the stocks in the portfolio are dividend payers.However, some have high dividend yields, some pay Berkshire more money overall than others, and some have excellent track records of dividends. Berkshire's "top dividend stock" depends on how you define that term.In terms of dividend yield, the top dividend stock in the portfolio is real estate investment trust (REIT) Store Capital (NYSE: STOR). On the other hand, the stock that pays Berkshire the most money each quarter is Kraft Heinz (NASDAQ: KHC). Finally, the Buffett stock with the longest track record of dividend increases is Coca-Cola (NYSE: KO).The highest-yielding stock in Berkshire's portfolio is also one of its newest investments. Real estate investment trust Store Capital pays a 4.8% dividend yield based on the current share price, and is the only REIT currently in Berkshire's portfolio.Store Capital is a net-lease REIT specializing in single-tenant retail and entertainment properties. If you're not familiar, a "net lease" is a form of commercial lease where the tenant agrees to cover property taxes, insurance, and maintenance expenses — pretty much all of the variable costs of property ownership. In addition, net leases typically have long initial terms — 15 years or so — which minimizes turnover risk.In other words, all Store Capital has to do is put a tenant in place and enjoy years of predictable, growing income with minimal risk. This is a business model that has "Buffett" written all over it.Kraft Heinz is Berkshire Hathaway's single largest common stock investment. In fact, it's so big as a percentage of Kraft Heinz's outstanding shares (nearly 27%), Berkshire has to account for it differently than the rest of its stocks because of the Continue Reading

High dividend stocks may find favor as market headwinds abound

By Chuck Mikolajczak NEW YORK (Reuters) - High dividend yield stocks such as telecoms and utilities are looking more tempting as investors become increasingly nervous about the outlook for equities and as U.S. Treasury yields hover near a 10-month low. The wide spread between the 10-year Treasury note and high-dividend payers, coupled with these stocks' reputation as a safer play, could tempt investors to move away from high growth names. A nuclear test from North Korea on Sunday rattled investors when markets opened on Tuesday after the extended holiday weekend, pushing the yield on benchmark 10-year Treasury notes to a 10-month low. "If rates can stay down here you will see people begin to return to those days of owning high dividend stocks," said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey. Investors typically prize high dividend players in a low rate, low growth environment, as they search for high yielding and stable instruments. Fund managers already seem to be picking up some of these stocks. On a sector basis, weekly inflows for utilities were among the strongest, relative to assets under management, at 1.9 percent according to data from Credit Suisse through Sept. 1. Stocks in the telecom and utilities sector have some of the highest dividend yields in the S&P 500. Telecom CenturyLink has a dividend yield of 11.4 percent, top in the index. Utilities FirstEnergy and Southern Co both have dividend yields above 4.5 percent. Meckler said investors are now more confident these sectors can compete with the yield on the 10-year at such a low level. Goldman Sachs CEO Lloyd Blankfein issued a note of caution about the disparity between bond yields and equities at a conference in Germany on Wednesday, saying "When yields on corporate bonds are lower than dividends on stocks, that unnerves me." Stubbornly low bond yields can be of concern to equity players because they are Continue Reading