It's only April, but it appears dividend payouts this year will soar past 2012's tally - meaning all investors need to know how to find the best dividend stocks or risk missing out on record-high yield.
Barron's reports that in Q1, 944 of approximately 10,000 U.S. companies boosted payouts, either by increases, extras or resumption. That was up a hefty 39.4% from 677 companies a year ago.
Dividend increases alone tallied $14.5 billion. Cash payments jumped 12%, while the forward indicated dividend rate reached an all-time high.
The following favorite dividend stocks are among those that juiced payouts in the first quarter:
With dividends on the rise, investors can't afford to pass up the security and income dividend stocks have to offer.
We asked our Money Morning income expert Martin Hutchinson for more information on how to find the best dividend stocks for your portfolios.
Amid five years of near-zero interest rates, dividend stocks have taken on a new revered status.
Indeed, dividends matter.
Over the last 36 years, dividend stocks have outperformed the rest of the S&P 500 by 2.5% annually. Moreover, in addition to paying out cash to shareholders, dividend payers still beat nonpayers by nearly 8% every year, according to Ned Davis Research.
A key consideration about dividends is that investors are rewarded in the traditional way- cash.
With a growing class of dividend payers, investors ought to be selective. That's why we have narrowed down the selection process.
The best place to start is with heirloom stocks.
"These are stocks you buy, hold and watch them grow-steady earners you can rely on to fund a growing prosperity in retirement, or leave to your grandchildren knowing that the expenses of their lives will be safely covered," said Hutchison. These select stocks "should be an important base of any portfolio, especially one used for retirement purposes."
Heirloom stocks have some distinct investment advantages including:
In all, there are 82 to choose from, with yields ranging from 0.8% to 11.3%.
But simply chasing yield is never prudent. Instead, hunt for stocks with a minimum yield of 2%.
Also key is buying stocks that will maintain their lengthy track record of boosting dividends.
This choice group of 82 stocks has not just paid dividends for 30 plus years, they have also boosted payouts in every one of those years.
Here are a few of Hutchinson's top dividend stocks:
Warning - Now that you know what to look for in dividend stocks, don't let a high-yield distract you, like the ones offered here: Beware These Three Dividend Stocks Ready to Slash Their Payout
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