Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

General Electric Company (GE), Apple Inc. (AAPL): 4 Dividend Stocks Built to Last

Page 1 of 2

Dividend stocks are wildly popular these days. Most investors know that a bad bond market makes dividends attractive. However, very few know what really makes a good dividend stock.

The pay-out ratio, the percentage of a companies actual earnings that are paid out in dividends, is the key to successful dividend investing. Study after study has shown that high dividend payers with low pay-out ratios crush the markets’ returns.

In the spirit of crushing the market going forward I’ve compiled a list of top dividend payers. These stocks all have a low pay-out ratio, below 60%, and a dividend yield over 2%. Here’s the best of the best.

General Electric Company (NYSE:GE)

Industrial revolution

Since cutting its dividend in 2009, General Electric Company (NYSE:GE) has raised it six times in four short years. Today the dividend yield sits at 3.3% but, surprisingly, the pay-out ratio is still under 60%–earning it a spot on our list. General Electric Company (NYSE:GE) has always been known as a dividend stock. This fact is precisely why some investors shunned the conglomerate after the big dividend cut in 2009, but since then the company has executed well.

1). They’ve reduced the percentage of earnings that are dependent on their risky finance arm and non-core (i.e., NBC) businesses have been cut.

2). They’ve focused their resources on core industrial services

3). While they’ve raised their dividend six times, they’ve kept their pay-out ratio reasonable. This allows General Electric Company (NYSE:GE) to continue to re-invest in their business while also keeping their dividend safe.

Perhaps its near death collapse in 2008 taught General Electric Company (NYSE:GE) a thing or two. All I know is that GE’s dividend is much safer today, and so is the stock.

Apple Inc. (NASDAQ:AAPL) is not dead

Apple Inc. (NASDAQ:AAPL) is in transition right now. The company is changing from a hyper-growth stock to a more diversified play. The stock has surprisingly become a high yielder at 2.7%, a value play with a PE near 10, and it still has the ability to grow.

Often times investors don’t make the connection between earnings growth and dividends, but nothing could be more closely connected. For instance, Apple’s pay-out ratio is currently just under 30%, easily meeting our criteria, but if earnings grow it’ll become even lower. If that happens, Apple Inc. (NASDAQ:AAPL)will once again hear clamoring to raise its dividend. So, the chances are, if this company grows again you’ll likely see an increase in the stock price and the dividend. With iRadio set to launch, as well as new products and refresh cycles ahead, I think that growth is a reasonable bet.

Cisco: finally breaking through

IP-networking giant Cisco Systems, Inc. (NASDAQ:CSCO) has (finally) had a nice run up in its stock price. The stock is trading at a 52 week high, just over $24, after being range bound seemingly forever. Despite holding overwhelming market share, and showing consistent earnings growth, this company seems perpetually undervalued.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!