The Conservative Retirees portfolio seeks to preserve capital and deliver a very safe, above average dividend yield. Dividend income is expected to steadily grow at a moderate rate, and the portfolio is expected to keep up with the S&P 500 over time.
We expect the portfolio to underperform in bull markets and significantly outperform in bear markets due to the defensive nature of its holdings.
Total return is expected to be composed of:
3.5% – 4.5% dividend yield
4% – 6% earnings growth
We invest in high quality companies with enduring competitive advantages, long operating histories, shareholder-aligned management, and large markets that provide opportunity for long-term growth. These businesses maintain reasonable payout ratios, generate consistent free cash flow, and have healthy balance sheets, providing a sturdy foundation for consistent dividend increases.
When we make an investment, we take a patient, long term investment horizon and expect to hold the stock for at least five years, keeping portfolio turnover low. Generally speaking, we will only sell a stock if the safety of the dividend payment has come into question, the company’s long term earnings power appears to have become impaired, the stock’s valuation reaches seemingly excessive levels, or we find a more attractive idea.
As of 3/31/2017
Market Value: $126,375
Dividend Yield: 3.5%
Forward P/E Ratio: 18.3
Increases: 46 Decreases: 0
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Looking for more sources of safe, predictable income?
In addition to our Conservative Retirees dividend portfolio, we have five pre-filtered lists of dividend stocks that can help meet your needs:
Safe Dividend Stocks
The Safe Dividend Stocks list contains the highest rated stocks for safety, making them more appropriate for investors concerned more with safe passive income and less with longer-term growth potential. These companies generally maintain low levels of debt, produce consistent free cash flow, generate moderate-to-high returns on equity, and have moderate-to-low payout ratios. View the list here.
Stocks on this list have dividend yields in excess of 5% and plenty of potential to provide immediate high income. But, how can you know if the dividend payment is safe? Simply knowing the dividend yield and payout ratio is not enough. Fortunately, our proprietary Safety Score metric evaluates a company’s debt level, cash flow generation, sales growth, profitability trends, cyclicality and more to get a better sense of the yield’s safety. Increase your portfolio’s income level without taking irresponsible risk. View the list here.
Real Estate Investment Trusts
This list covers over 225 real estate investment trusts (“REITs”). REITs typically provide high dividends and the potential for moderate capital appreciation. These companies are required to pay out at least 90% of their taxable income to shareholders in the form of dividends, making them a strong income-generating investment. View the list here.
Master Limited Partnerships
This list covers over 130 master limited partnerships (“MLPs”). For investors willing to deal with potential tax reporting complexity, lack of liquidity, and other risks, MLPs can offer higher yield potential. View the list here.
The dividend stocks on this list pay a dividend every month. They make budgeting a bit easier, and why not receive a check every month instead of every three? View the list here.
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