The Best of the Money (Dividend) Blogs

The globeandmail yesterday released their annual "Best of the Money Blogs" survey to seek out the best online financial blog resources for investors and personal finance junkies. If readers are astute they might find a number of Dividend Addicts in the midst of these highly regarded blogs.

"To track down the best financial blogs the Web has to offer, we asked our Globe bloggers, columnists, the Canadian Capitalist and hedge fund manager Howard Lindzon to share their favourites. Want to let us know what you think? Our online poll below will let you vote for your top picks. And, if you have a name we overlooked, add it to the comments. You can also recommend the sites other readers have added. Without further ado, here's the list..."

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Diageo has Scope to Raise Dividend Further

Garry White of the Telegraph.co.uk writes a column on defensive dividend stock Diageo PLC (DEO) and the prospects of future dividend increases from the company.

"Diageo shares have underperformed other defensives over the past six months, but the company generates good cash flows and its dividend is safe. This has created a buying opportunity....Of course, despite its defensive characteristics, the spirits and beer group has not been immune to the effects of the recession. Destocking has been a major theme – and this has obviously hit sales."

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Dividends Can Prevent Inflation Erosion

Charlie Farrell of moneywatch.com wrote an article recently on dividends and how inflation impacts a portfolio. Because dividends have the potential to grow over time threats of inflation to a portfolio can be partly offset by investing in companies that raise their dividends above inflation.

"Historically, dividend payments have increased as the companies that pay those dividends grow their businesses and their earnings. While past performance is no guarantee of future returns, a reasonable long term estimate for future dividend growth on a diversified portfolio is about five percent per year."

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Dividend Lovers Should Take Note:

John Heinzl of theglobeandmail publishes an article on Canadian dividend stocks addressing the issue of some investors feeling as if they've missed the boat on high dividend yields erased by the market advance.

"True, the stock market has been on steroids since hitting its March lows, but there are still plenty of juicy dividend yields out there. And as the economy gradually recovers, the risk of companies cutting their payouts is fading, removing a key source of worry for income-seeking investors. All of which means that dividend stocks still offer decent value, particularly for long-term investors who can tolerate more short-term volatility."

Dividends Discussed:
- Canadian Banks
- Reitmans
- Bell & Rogers
- Thomson Reuters

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Cheap Utility Stocks

Bloomberg has an article out today discussing global utility stocks and their attractive valuations for dividend oriented investors.

"Power producers are offering the biggest dividends since at least 1995. Payouts by utility companies in the MSCI World account for about 5.17 percent of share prices, almost double the rate at the end of 2007, according to quarterly data compiled by Bloomberg. They have increased per-share dividends every year since 2001, the data show. That’s longer than any industry group except health-care companies, which have a dividend yield that is 43 percent lower. The yield from utilities is also higher than the 3.71 percent yield on 10-year Treasury notes. In the previous 14 years, utilities have paid on average 1.74 percentage points less than government bonds, Bloomberg data show."

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Opportunities in Dividends

Johanna Bennett in Barron's interviews Alan B. Lancz on the recent market rally, investing opportunities and the prospects of dividends discussing investments such as Procter & Gamble (PG), American Water Works (AWK) and Eni SpA.

"Q: Are we in a bear-market rally or a bull-market recovery?
A: Wall Street spends far too much time thinking about that, which is why they missed the severity of the financial crisis. It has been a strong rally with the market bouncing off extreme lows. The financial crisis, for the most part is behind us and there is a light at the end of the tunnel. But we are not out of the woods. The massive government bailouts will have unintended consequences, such as rising interest rates, a rising risk of inflation and a weak U.S. dollar. We can't count on China to lead us out of the recession. Meanwhile, I don't expect to see strong economic growth anytime soon."

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Tough to Nail Down Yield

Keith Woolhouse of The Ottawa Citizen writes a column on the topic of dividend yields and where investors should invest their capital in an environment that doesn't reward you for placing money in savings accounts.

"The choice facing investors at this time is not simply where to invest -- extremely low rates on savings accounts make that decision easy. A greater worry is the overhanging concern that the market has got ahead of itself and a correction may be in the offing, bringing down share prices and raising current yields. But waiting for the market to pull back can prove costly and it hasn't worked, so far, for those still on the sidelines."

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The Ultimate DRIP Portfolio (DRIP-folio)

Triaging My Way To Financial Success posted an article discussing the concept of The Ultimate DRIP-folio; an ideal portfolio of dividend stocks that are eligible for a DRIP (dividend re-investment plan) or SPP. He's collaborating with other investors and readers to construct a model portfolio that's both diversified and takes advantages of DRIP discounts offered by companies in this current environment. For Dividend Addicts this could be a great resource to pick up names of companies with effective DRIP programs.

"I want, with the help of readers and investors, to create The Ultimate DRIP-folio; a diversified portfolio of stocks that have eligible DRIPs. This portfolio could be the standard among all investors interested in constructing a portfolio that takes advantage of DRIPs and compounding returns over the long-term."

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Dividends: Waiting for a Rebound

Ben Steverman in BusinessWeek writes an article on the stinginess of companies increasing their dividends and how some companies, despite the recession, are finding innovative ways to give back to shareholders.

"So far in 2009, 80 companies in the S&P 500 have raised dividends, netting shareholders an extra $5.4 billion, S&P says. However, 63 firms have reduced payouts, for a $46.3 billion hit to dividend income. Investors have been disappointed by some of the stock market's most consistent and generous dividend payers. S&P keeps a list of "Dividend Aristocrats," firms that have increased payments for 25 consecutive years. Changes to the list won't be official until the end of 2009, but many aristocrats seem to destined to lose their rank."

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A Big Problem with Dividends

The Dividend Guy wrote an article titled, Dividend Investing's Big Problem, that outlined a main fault of many Dividend Addicts who concentrated their dividend paying stocks in banks and financial stocks rather than other sectors for diversification over the past few years.

"How did I get to have this problem. As I look back on it, it really is quite simple. Some of the longest standing dividend payers and dividend growers were Citigroup and Bank of America and I was buying into that strong yield and strong growth. As a dividend investor, this is what we are really trying to do - achieve that fantastic long term growth that comes from a growing dividend. This lured me into a false sense of security in these securities and I got burned."

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