How To Earn 13.2% Yields From Stocks Paying 5.4%

In my Daily Paycheck portfolio, I have two classic dividend payers that I put in the same class as Abbott and IBM — AT&T Inc. (NYSE:T) and Altria Group, Inc. (NYSE:MO).

If you put $5,000 into AT&T five years ago, you’d have earned a 5.5% yield at the time. That’s $275 per year. But today, that $5,000 investment would be paying $417 a year if you simply reinvested your dividends. That’s an 8.3% yield on your original investment.

Altria is an even better story. Right now, the shares pay a solid 5.4%. It’s nothing to sneeze at, but thanks to the company’s commitment to dividend growth, $5,000 invested just five years ago — plus reinvested dividends — is now earning 13.2%, or about $660 every year. That makes for a 144% higher yield in just 5 years.

Action to Take –> It’s doubtful most of us will have decades and decades to invest like Grace Groner or my Aunt Lillian. But that doesn’t mean we can’t see our dividends grow enormously in a span of just a few short years by simply choosing our dividend payers wisely and then reinvesting the payouts.

This article was originally written by Amy Calistri and posted on StreetAuthority.

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