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Private Briefingwith WILLIAM PATALON III, Executive Editor
Ask any of our gurus for advice on how to survive a stock-market sell-off – or even a whipsaw period like the one we’re navigating now – and you’ll get a surprising answer.
Keep a shopping list ready, they’ll tell you…
Click here to get exclusive access to our experts' 4 Best Spin-off investments.
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Weary investors scouring the landscape to find decent dividend stocks to buy should take a hard look at the latest list of Dividend Aristocrats.
The S&P 500 Dividend Aristocrat Index measures the performance of companies in the S&P 500 Index with amarket value of at least $ 3 billion that have increased dividends for at least 25 consecutive years.
In 2013, only 54 companies, approximately 11% of companies in the S&P 500, made the cut.
Actually, it's no surprise this group of dividend stocks is tiny.
Think about it.
These companies have raised dividends for the last 25 years - a period of time that included the Great Recession, numerous oil price shocks, at least two major market meltdowns and wars in Iraq and Afghanistan.
If they can steadily raise their dividends in the face of that kind of adversity, you can be pretty confident they're going to be around for awhile.
They're the kind of companies that consistently deliver the goods, having outperformed the rest of the S&P 500 on a regular basis. The Aristocrats returned 4.59% annually over the last five years, while the group as a whole produced a negative 0.25% return for the period.
These are businesses with strong balance sheets, healthy earnings and cash flow generation that can help you protect your portfolio - regardless of the market's direction.
But not every Aristocrat is worthy of your hard earned dollars.
Some drop by the wayside. Others are increasing their dividend by draining capital from their business.
Here's what to look for when choosing the best dividend stocks to buy.
Every year in the third week in January, S&P releases an updated list of qualifying companies - and quietly drops those that don't cut it anymore.
Even though Pitney Bowes Inc. (NYSE: PBI) raised its dividend last year, its earnings have steadily declined over the years as demand for its postage mail-based products and services plummeted.
It was summarily banished from the list this year when its market cap dropped to $2.7 billion.
Meanwhile, only four newcomers were added this year.
But according to Money Morning Global Investing Specialist Martin Hutchinson there's only one of the freshly-minted Aristocrats that you should add to your portfolio right now - and some you should steer clear of.
"All you have to do is figure out which companies are run by sharpies - and are paying dividends out of capital - and which companies have genuinely solid business models that aren't going away," said Hutchinson.
Here's a look at each of the companies that made their debut in 2013, including the best one to buy.