Perhaps one of the best solutions is to find high quality stocks of companies that have been paying dividends for a long time. These stocks provide investors with capital appreciation, and a steady stream of dividend payments. Most of them also ensure that in case inflation goes much higher, these companies will be able to raise prices to offset that increase. They provide income, inflation protection and potential capital appreciation. Bonds, on the other hand, are fixed interest payments. No matter how well the company does, bondholders will only receive their coupon payment and their principal at maturity.
Although the stock price of these dividend aristocrats may fluctuate overtime, all of them have been consistently paying dividends. A dividend aristocrat is defined as a company that has paid dividends for over 25 years, and it constantly increases it. Some of these stocks include well known names such as Home Depot, Target, Coca-Cola, Pepsi, and Verizon. The value of stocks, such as dividend aristocrats is usually higher given their historical performance. They are seen by investors as some of the most safe and reliable investment vehicles. As a retiree wanting to protect your retirement savings, and at the same time receive income and ensure you keep the same lifestyle. Looking at these steady dividend payers could be the best option.
Dividend aristocrats are some of the most sought after stocks in the whole market. Stocks that have consistently paid and raised dividends for more than 25 years, are considered dividend aristocrats. Some of these companies will never cease to exist, as they provide essential products and services used around the world. They are certainly the best current alternative to bonds or any kind of investment.
When you invest in dividend aristocrats, you essentially receive interest income in the form of dividends. The dividend yield on some of these stocks is far higher than the coupon paid by treasuries or corporate bonds. At the same time it provides inflation downside protection.
Author bio: Value of Stocks is an independent financial information provider. Focused on analyzing stocks with a value investing approach. Our main goal is to help investors make better investment decisions.