Investing in companies that pay reliable dividends can add a level of stability and predictability to a portfolio. It’s a known fact that dividend-paying companies tend to hold up better than non-dividend payers during bear markets. In addition, investing in companies with a combination of exceptional earnings and dividend growth can provide very attractive, market-beating returns over the long term.
In order for a company to pay a dividend, and increase it every year during both good times and bad times, it must operate very efficiently, have superior management, and have a sustainable and successful business model that results in consistent earnings growth.
A resource for developing a watch list of companies with outstanding dividend histories is the dividend achievers index. In order to make it into the dividend achievers index, a company must have increased its annual dividend for a minimum of ten consecutive years, which is a significant accomplishment, considering the dismal economic conditions that companies have been faced with over the last decade.
I believe that a portion of a properly diversified portfolio should be dedicated to companies with outstanding dividend payment histories, such as those in the dividend achievers index.
Investors who prefer to invest in the entire index, instead of choosing individual constituents, can do so by opening a position in the PowerShares Dividend Achievers Index. This ETF’s holdings include all of the companies (approximately 150) that are included within the index. This is a safe and easy way to invest in a basket of companies with growing dividends, but I personally prefer to invest in the “best of the best” by choosing the most attractive opportunities within the index.
Two dividend achievers for the long haul
C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW) is a third party logistics company that provides global freight transportation logistics and supply chain solutions for a wide variety of industries.
Imagine that you are a provider of a very large, heavy product in the U.S., and that this product is needed quickly in a country that you have never heard of. How will you get this product to the customer on time? Fortunately, you could utilize C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW)’s services. C.H. Robinson has the ability to determine the quickest and most cost-effective means to get this product to its destination.
C.H. Robinson’s transportation methods include road, air, ocean, and train. C.H. Robinson provides its services for over 42,000 customers and has access to over 56,000 transportation providers.
C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW) is heavily involved in the fresh produce industry, which includes vegetables and fruit in addition to a wide variety of other food and beverage products. Its expertise in delivering fresh, high-quality produce is invaluable. Refrigerated transportation methods are utilized to ensure that the products being shipped are within the proper temperature range.
The global population is constantly growing, developing markets are continuing to advance, and the economy is slowly improving. As a result, international trade should increase significantly, which bodes well for C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW).
Caterpillar Inc. (NYSE:CAT) is a global blue-chip company that manufactures and sells construction equipment, mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives.
Caterpillar Inc. (NYSE:CAT)’s construction products serve multiple industries, including the agriculture, forestry, defense, paving, and energy industries. Its large group of machinery products include excavators, bulldozers, snow plows, loaders, tractors, drills, pavers, and many others. Caterpillar Inc. (NYSE:CAT) also provides rental services through Cat Rental and financing through Cat Financial.