Increase Your Returns With Dividend-Paying Stocks

Stocks that pay dividends are gold mines for long-term investors. Collecting dividends year after year is an easy and automatic way to increase your investment returns.

Take the following simple example as evidence of the power of dividends. Assume that you invest $10,000 to buy 1,000 shares of a $10 stock which you hold for ten years. Also assume that the stock price appreciates 6 percent each year so at the end of ten years your 1,000 shares are worth $17,908.48, a 79.08 percent gain.

Now add in the effect of dividends. Given an annual dividend of 30 cents per share, which is a three percent dividend yield based on the $10 purchase price, you would receive $300 in dividends each year. So over the ten years your $3000 of dividends would make your investment worth $20,908.48, a 109.08 percent gain.

And if the dividend payment increases each year, you will receive even more money and achieve still greater returns. For example, assume that the dividend amount increases five percent each year for the ten-year holding period. Then the dividends will total $3,954.24 for the ten years making your investment worth $21,862.72, which is a 118.63 percent gain.

With dividend-paying stocks, you can take the dividends as cash income, accumulate the cash, or reinvest the dividends to accumulate new shares.

Here are 15 dividend-paying stocks that are appropriate for a long-term dividend-reinvestment portfolio. Many of these stocks have multiyear records of increasing their dividends, which is important to keep ahead of inflation.

To follow the day-to-day progress of the retirement dividend portfolio, check out the chart below. It is updated each day, so the portfolio values are always current. The current value of the portfolio assumes that $666.67 was invested (total of $10,000) in each of the 15 stocks at its closing weekly price for the first week of January 2001.

Click chart to enlarge it.

To see a chart of current and past dividends for these stocks, use the buyupside.com Dividend Chart Maker.

To get more performance information about these stocks, use the buyupside.com Stock Return Calculator.

See Daily Dividend-Paying Portfolio Updates On buyupside.com for a list of dividend-paying portfolios.


Related Articles:

All Weather Stocks Have Long-term Price Upsides and Rising Dividends
Dividend-Paying Stocks Create Wealth
Daily Portfolio Updates On buyupside.com
Dividend Achievers Pay Increasing Dividends
Dividend Aristocrats Pay Increasing Dividends
Why Dividends Matter

Updated Mar-18-10.

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