Streetwise for Sunday, October 10, 2021

Once again, my mailbox is inundated commentary which profess the same theme. Specifically, that the financial markets could be headed for a major correction. Some even suggested we could see a decline like we saw in 2008.

Often the commentary lacks both data and academic credentials, relying instead on a seemingly mystical crystal ball. What is unfortunate is that opinions have the potential to become believable in the minds of many when repeated continuously.

What concerns me the most is the decimation of investor confidence that is often aligned with any possibility of a market decline. However, there is one investment route you might find useful in today’s investment climate.

Academic studies in general point out that equities as an investment vehicle have gone a long way in the past towards increasing your wealth. The key question is what to buy and when. The latter question is easy, whenever you find an attractive investment. Therefore, the only remaining issue what do you invest in?

Let once again, as I have for countless years, hypothesize the following: Suppose for a moment you had a list of about 352 companies that have continuously increased their dividends for at least 10 consecutive years? Would that help?

Each teaching quarter, I introduce my adult students who are seeking to enhance their investment skills to the Mergent Handbook of Dividend Achievers. The book could be a useful tool for individual investors.

Moreover, I was once asked that if you removed my computer, access to the Internet, and only allowed to have one item with which to select investment candidates, what would it be? The answer is the Dividend Achievers Handbook. In fact, at one time I was quoted on the back cover making that statement.

No, I do not have, and never have had, any financial or other ties to Mergent, although as a matter of complete disclosure my students receive an academic discount.

The book profiles those companies that have increased their regular annual cash dividend for a minimum of 10 consecutive years. Less than 10 percent of all listed dividend paying companies make the Dividend Achievers list. If a company misses a year, it is off the list and must increase dividends for 10 consecutive years to be added back.

Mergent is not content to simply list the stellar dividend performers. Rather it takes the list and proceeds to slice and dice it in a variety of ways. For example, it lists the top 20 companies in 12 different categories, such as total assets, return on assets, return on equity and dividend yield.

Yet, the various lists comprise only about 50 pages of the book. The remaining pages are devoted to a detailed description of each company, including 5 years of annual financial data.

I have been using and writing about the Handbook for over 25 years and I believe it to be one of the few remaining bargains in the arena of investment materials. Moreover, you do not need any form of professional assistance to benefit from what Mergent has put together.

If you are interested in knowing the name of a company with the longest record for increasing its dividend every year, it is a two-way tie. American States Water and Procter & Gamble have been increasing their dividends for 64 consecutive years.

One minor but annoying point is that the print is rather small. This is a result of having to incorporate as much data as possible in a relatively small space. Personally, being a bit long in tooth I keep a magnifying glass nearby, just in case. Note, Mergent has recently been offering a larger print edition.

If you would like to obtain a single copy or a subscription, contact Mergent at 1-800-342-5647.

Lauren Rudd is a Managing Director with Raymond James & Associates, Inc., member NYSE/SIPC. Contact him at 941-706-3449 or Lauren.Rudd@RaymondJames.com. All opinions are solely those of the author. This material is provided for informational purposes only, is not a recommendation and should not be relied on for investment decisions. Investing involves risk and you may incur a loss regardless of strategy selected. Past performance is no guarantee of future results.