Three or four years ago I remember having many conversations with my Mom about how tough it was to invest for income. The only place you could get any yield was the bond market but yields were still weak and wouldn’t protect against inflation. Stock dividends were pretty much a joke. There were only a handful of stocks with sustainable yields above 3%. It was a really tough time to try to invest for income.
My oh my how things have changed! Today’s stock market is a dividend investors paradise! I just read a Barron’s interview with Judith Saryan, co-manager of The Eaton Vance Dividend Income Fund (EDIAX), “A Dividend Stock Picker Gives Her Favorites” (subscription required), and I have to think it’s a lot of fun being her right now.
For the first time in a long time, an investor can put together a real income producing portfolio of dividend paying stocks that one can count on for the long run.
I took a look at the list of the Eaton Vance Dividend Income Funds holdings as of 12/31/08 and here are some with their dividend yields:
Walmart (WMT), 2.2%
McDonald’s (MCD), 3.8%
Waste Management (WMI), 5.1%
Novartis (NVS), 5.0%
Verizon (VZ), 6.7%
Lockheed Martin (LMT), 3.9%
The list goes on and on. These kinds of yields literally make me salivate.
If you have enough money, you are now getting an opportunity to put it to work at yields that can provide you a solid income for the rest of your life.
This opportunity might never come again. Put your money in these great companies, pocket their quarterly dividends and do what you want with your life. This is an amazing chance to secure your financial freedom if you’ve got the savings. For the first time I can tell my Mom (and my clients): I can create a compelling portfolio of dividend paying stocks that you can count on for the long term!
Disclosure: Top Gun is long Walmart (WMT) and Lockheed Martin (LMT) and has no position in any of the other stocks mentioned.