While most income investors are reaching for big yields
right now, a small group of “hidden yield” stocks are quietly handing smart
investors growing income streams plus annual returns of 12%, 27.1% and even 54%
or more per year.
So if you want to double your money every few years – and
double your income as well – then you need to focus on the seven stocks I’m
about to share.
(All seven are about to hike their dividends. Yet the
“forward-looking market” hasn’t yet priced in these payout raises. This is free
money the market is giving us, thanks to the most “underrated” shareholder
return vehicle.)
There are three – and only three – ways a company’s stock
can pay us:
A cash dividend.
A dividend hike.
By repurchasing its own shares.
Everyone loves the dividend, but investors usually don’t
give enough love to the dividend hike. Not only do these raises increase the
yield on your initial capital, but also they often are reflected in a price
increase for the stock.
For example, if a stock pays a 3% current yield and then
hikes its payout by 10%, it’s unlikely that its stock price will stagnate for
long. Investors will see the new 3.3% yield, and buy more shares.
They’ll drive the price up, and the yield back down –
eventually towards 3%. This is why your favorite dividend “aristocrat” – a
company everyone knows and has paid dividends forever – never pays a high
current yield. Its stock price rises too fast!
Comments
Post a Comment