Best Dividend Companies

The best dividend companies!

How to select the right companies for recurring dividends?

Where to start?

There are so many businesses out there, different industries and sectors to choose from like FMCG, energy, property, pharmaceutical, mining, technology, banking, insurance, telecommunications, the list is too exhaustive to list.

If we just look at the above list there are then the sub-categories where we could explore even further like: energy for instance and the traditional energy stocks: oil, gas, nuclear. Then there is the new unproven world of renewables like wind, solar, hydrogen which are all new in the arena of power generation for income seekers.

Let’s take a quick look at the banking sector and sub-sectors like the payments sector for instance. Are we talking traditional high street banking, investment banking or mixture of both? Commercial lenders, mortgage lenders then theres the appearance of the new challenger banks not excluding the new era of Fin-tech. How does this changing landscape effect the traditional banking systems and payments stalwarts of these 100+ year old, well established businesses and financial institutions?

We must be mindful and understand that the world is a constantly changing landscape, old industries are making way for new tech which is effecting everything from cars to banking, medicine to energy so it can be extremely difficult and often daunting selecting the correct companies for fear of investing in an old style business.

Take the automotive industry for instance and the traditional manufacturers like: Ford, GM, Volvo, Mercedes, Fiat and VW. Are these companies going to lie down and let Tesla’s completely take over the auto industry? Of course not, they will evolve their 100 year old businesses to the new era like many of them have already started to do, in the electrification of the humble motor car.

Yes Tesla is an interesting new stock for the investor purely seeking gains in its stock appreciation, however Tesla pays no dividend. Any appreciation is purely driven in its share price which is well over valued for future earnings. There are still many arguments for investing in these traditional car manufacturers, for instance:

1, not everybody can afford a new electric car for starters and certianly not a premium model Tesla

2, if we could all afford a new Tesla we’d have blackouts because the power grids couldn’t handle charging them at the same time.

3, Tesla is a premium model and the likes of VW, Renault & Polestar already have more affordable models available for mass-markets.

There is also another consideration in that there are already extremely large fleet of combustion engine vehicles in the world, however in time though these engines will eventually stop working. As with all eco systems, lower costs, newer technologies will take hold and the humble petrol / diesel engined car today, will evolve to an all electric power horse of modern day transport.

The same arguments can be said for the majority of the sectors listed above, but are investment funds around the world going to stop investing in quality companies like Visa and Mastercard because of new Fintech? No….

As the landscape changes though, it is always worth looking at each individual sector and understanding its strengths and weaknesses.

When selecting a particular company always research and more importantly consider what is affecting its sales (if anything). Try understanding how the business you select today may look in 10, 15 or 25 years time. Ask yourself are these businesses evolving? Whats the threats? Whats the strengths? These are all valid questions to consider before buying any equity.

Only invest knowing that you have conducted your due diligence. This will help you adjust your tolerance to the risks vs. income as the business transitions over time.

If you are not sure simply do not invest, however if there are good arguments for a business changing with the times and staying current, its generally a good business to commit in purchasing its stock and holding for the long term.

Successful companies that make reliable revenue streams may also choose to share their profits with investors, however this is subject to a myriad of factors, so ensure that you thoroughly research the business and relevant sector.

When looking to build your own list of stocks or equities for dividend income I cannot stress enough to ensure you conduct your own research. I am not talking hour upon hour of endless reading however there are some basic steps you should be using when looking into specific stocks. I will cover this in more depth later throughout the website.

Here are my first 11 go to basics:

1, Financials, check the vitals

2, Is the business solvent? is cash on the balance sheet?

3, If a company is paying a dividend is it sustainable?

4, Check the P/E and compare its history

5, Check the companies own published news articles.

6, research its peers or competitors

7, ROI (Return on investment)

8, acquisitions / takeovers

9, What is the companies unique selling point (Moat)

10, Is this going to be a long term investment?

11, Historical share price

More tips and help will be provided on other pages in due course however these are some of the quick reference points I run through before digging even deeper.

Finally, links to company pages I have covered and are already in the portfolio can be found by hovering over the name on the opposite side of this page. If the company does not have a link this will be updated and covered shortly, so please checked back.

Clarification: Always confirm anything you read here or on other external resources when you are researching. Cross reference using only a company’s own published financial information. Individual company’s publish their own financials & news that is governed by laws and stock market trading criteria they have to meet. For ease of reference external links will be provided for all company dividends I refer to throughout this website.