| Praise for THE TOP 40 DIVIDEND STOCKS series |
Author Dave Van Knapp
REVIEW OF 2010 EDITION BY JASON KELLY, author of the best-selling The
Neatest Little Guide to Stock Market Investing
Published on February 19, 2010 on JasonKelly.com
Dave Van Knapp of SensibleStocks.com publishes an annual overview of the dividend-paying
stock scene. This year's edition came out last month. Dave was kind enough to send me a
copy of The Top 40 Dividend Stocks For 2010, and I've read through all 145 pages of it.
To the point: this is the best dividend-stock book I know. If you're interested in building
a portfolio of dividend-paying stocks, start with this book. Below, I'll share some excerpts from
the book to show what you can expect to learn, and put to use right away. Here's the table of
contents:
1. Introduction
2. A Look Back at 2009 and Forward to 2010
3. What Are Dividends?
4. Why Invest in Dividend Stocks?
5. What Are the Characteristics of the Best Dividend Stocks?
6. Creating and Managing Your Dividend Stock Portfolio
7. The Top 40 Dividend Stocks for 2010
8. Easy-Rate Scoresheets for the Top 40
9. Disclaimer and Important Information
From the introduction:
In Chapter 4, [Dave] presents the case for dividend stocks: Simply stated, the case for
dividend stocks goes like this:
Dave provides a simple explanation of how, unlike bonds, dividend payouts can rise over time
so that your yield increases, one of the best benefits of a reliable dividend-paying stock:
on the market, Dave tweak[ed] it [this] year to place more emphasis on higher-yielding stocks
without adding much additional risk. [Dave's] system uses data from DRiPInvesting.org,
Morningstar.com, StandardandPoors.com, and others to find the companies with the best
business models; healthy finances; strong earnings, low debt, and other solid fundamentals; a
decent analyst backdrop; yield higher than 3.0% with a three-year total percentage dividend
increase of at least 16%; a history of raising the dividend; and a reasonable stock valuation.
The sweet spot contains companies with a high enough yield to be worthwhile, and a growth
rate of that yield that is sustainable.
That rather lengthy, thorough process winnowed [an original universe of 700 potential
candidates down to this year's Top 40]. The book presents this year's top 40 in four tables,
each with a different sort parameter: alphabetically, by company quality score, by total score
(company quality + valuation), and by current yield percentage. The top five dividend yields
are: 9.8% 8.4% 8.2% 7.6% 7.3% Each of the 40 stocks is presented on a completed Easy-
Rate score sheet, showing exactly why it made the cut. The completed score sheets are also
useful as examples of the kind of research you need to do on companies outside the compact
list of 40, if you'd like to apply Dave's methods to your own dividend-paying candidates.
Finally, Dave discusses what to do with stocks purchased from 2009's list that did not make
this year's list. In most cases, but not all, he suggests keeping them.
It's another winning edition of this annual survey. Dave sells it in PDF form for $39.
-----------------------------------------------------------------------------------------------------------------------
REVIEW OF 2009 EDITION BY "DIVIDEND GROWTH INVESTOR"
Published May 9, 2009 on The DIV-Net, The Dividend Investing and Value Network
Republished May 16, 2009 on Dividend Growth Investor
As a blogger I often receive offers for different investing services and tools for review. I was
recently offered to review Dave Van Knapp’s book “The Top 40 Dividend Stocks for 2009” by
the book's creator. The book is updated every year with the most current information on
dividend investing and with the best dividend picks according to the writer as well. You could
check my review of last year's book as well.
Last year’s picks from Dave Van Knapp’s book outperformed the S&P 500 by 11%. The list
did lose about 27% in 2008 however. There were 34 dividend increases and only 6 dividend
cuts or freezes.
The book is easy to read and could appeal both to novice and experienced dividend
investors. It is well organized and provides a pretty complete guide to long-term wealth and
income accumulation from dividend stocks.
It starts with an overview of the recent market action, which included many dividend cuts in
2008 and 2009 in the financial sector. The author then provides several reasons why
investors who seek superior long-term returns should invest in dividend growth stocks.
The characteristics of the best dividend stocks are also being summarized in the next pages.
If you had questions on how to create and manage your income portfolio the book would
certainly try to answer those concerns.
One thing that separates this book from other books on Dividend Investing is that the author
provides a list of 40 stocks as attractively valued investment ideas. Dave Van Knapp
describes the methodology he uses to select the best dividend stocks for his readers. Not
only does the book provide a list of stocks, but also includes brief stock analyses on each and
every company in the catalog.
In general I found the book interesting and informative. I enjoyed not only the whole investing
process that the author describes for creating and managing a successful dividend portfolios
but also his overview of special high yielding dividend structures such as Real Estate
Investment Trusts, Canadian Income Trusts, Master Limited Partnerships and Business
Development Companies. Overall I believe that it is a must own book for every serious
dividend investor. It is easy to read, well organized and provides a wealth of information not
only for the novice investor but also for the seasoned pro!
-----------------------------------------------------------------------------------------------------------------------
REVIEW OF 2009 EDITION BY JASON KELLY, author of the best-selling
The Neatest Little Guide to Stock Market Investing
Published March 17, 2009 on Jason Kelly's Web Site
Dave Van Knapp of SensibleStocks.com has just published a new e-book called THE TOP 40
DIVIDEND STOCKS FOR 2009: Dividend Investing for the Long Haul.
From Section 2:
Judging from reader email I received during this bear market, a focus on dividend streams
would be a nice break from price volatility.
his proprietary company quality score, by his proprietary total score, and by current dividend
yield. Those yields range from a high of 9.7 percent to a low of 3.0 percent.
The company with the highest quality score and highest total score sports a yield of 4.3
percent.
Some fun facts about the Top 40:
Not a bad group! Read more about it at Dave's site.
-----------------------------------------------------------------------------------------------------------------------
REVIEW OF 2008 EDITION BY JASON KELLY, author of the best-selling
The Neatest Little Guide to Stock Market Investing
Published May 14, 2008 on Jason Kelly's Web site
Dave Van Knapp of SensibleStocks.com has just published a new e-book called The Top 40
Dividend Stocks For 2008: How (and Why) to Build a Cash Machine of Dividend Stocks.
Like all of Dave's work, it presents the case in logical steps that build a staircase to
understanding and action. Dave is not about flash and show; he's about getting the job done.
The book shows:
From page 10:
Dave explains his Easy-Rate scoring system for assembling the best dividend stocks. It looks
at earnings, revenue growth, debt, and dividend history to assign points based on their
values. A stock's points make it easy to see if it's Excellent, Good+, Good, Fair+, Fair, Poor,
or Bubble.
Dave then runs his own system to come up with the top 40 current dividend stocks, presented
in four tables for easy reference: alphabetically, by quality score, by total score, and by
current dividend yield.
You may be surprised by some of the stocks not on the list. A sampling from that group:
Among the 40 winning stocks, the highest yield is 9.0% and the lowest is 2.1%. The book
includes completed Easy-Rate Scoresheets for each of the 40 winners.
Neatest Little Guide to Stock Market Investing
Published on February 19, 2010 on JasonKelly.com
Dave Van Knapp of SensibleStocks.com publishes an annual overview of the dividend-paying
stock scene. This year's edition came out last month. Dave was kind enough to send me a
copy of The Top 40 Dividend Stocks For 2010, and I've read through all 145 pages of it.
To the point: this is the best dividend-stock book I know. If you're interested in building
a portfolio of dividend-paying stocks, start with this book. Below, I'll share some excerpts from
the book to show what you can expect to learn, and put to use right away. Here's the table of
contents:
1. Introduction
2. A Look Back at 2009 and Forward to 2010
3. What Are Dividends?
4. Why Invest in Dividend Stocks?
5. What Are the Characteristics of the Best Dividend Stocks?
6. Creating and Managing Your Dividend Stock Portfolio
7. The Top 40 Dividend Stocks for 2010
8. Easy-Rate Scoresheets for the Top 40
9. Disclaimer and Important Information
From the introduction:
- There are two phases to the [sensible dividend investing] process. The first is to
identify the "best" dividend-paying companies. Ones that:
- Are financially solid
- Have a good initial yield at the time of purchase
- Consistently raise their dividends
- Are available at decent valuations
- Are relatively low in risk as to both their dividends and stock prices (recognizing
that stock market risk can never be fully eliminated)
- The second phase is portfolio management. The approach presented in this book
emphasizes making timely decisions to buy, sell, hold, or replace stocks; maximizing
dividend yields and dividend increases; sidestepping dividend cuts; and avoiding
outright loss of capital wherever possible.
- [Other excerpt omitted.]
In Chapter 4, [Dave] presents the case for dividend stocks: Simply stated, the case for
dividend stocks goes like this:
- Dividends are always positive.
- The best dividend-paying companies raise their dividends regularly, usually at a pace
that exceeds inflation. - Dividends are not just for current income. Dividends can be re-invested to build wealth.
- Re-invested dividends compound, accelerating the wealth-building process.
- Dividend stocks offer (with some risk) the potential for price appreciation in addition to
the dividends they pay.
Dave provides a simple explanation of how, unlike bonds, dividend payouts can rise over time
so that your yield increases, one of the best benefits of a reliable dividend-paying stock:
- If you own shares in a dividend-paying company that increases its dividends -- meaning
that the per-share payout goes up, as shown in the illustration -- something very
attractive takes place: Your yield on cost as a shareholder goes up. Many dividend-
paying companies have a long history of increasing their dividend regularly. Often this
is done in line with their earnings growth each year. So a company with annual earnings
growth of, say, 10% may increase its dividends 10% that year too. For comparison, in
your job, how often do you get a 10% raise? When a company increases its dividend,
your yield on cost (that is, the yield on your original investment) goes up. This happens
even though the current yield quoted in the newspaper stays the same. How can this
be? It's simple math. Say you purchase stock in Dividend Inc. when its price is $100
per share and its current yield is 3%. So you buy $1000 worth (10 shares) and the
stock pays you $30 that year. No matter how the stock's price changes over the
coming years, your personal yield (= yield on cost = yield on your original investment)
will always be based on that $1000 that you invested in the stock. Let's say that
Dividend Inc.'s longstanding practice is to increase its dividend in line with earnings. If it
increases its earnings 10% per year, that means in Year 2 the company pays out 10%
more to you, or $33, so the yield on your original $1000 investment increases to 3.3%.
Note that it no longer matters what Dividend Inc.'s current yield is. If the stock's price
rises exactly in line with the company's increased earnings (which would happen in a
rational market), Dividend Inc.'s price next year is also 10% higher ($110 per share), so
the newspaper will still list the current yield as 3% ($33/$110). But that only applies to
new buyers, not you.
on the market, Dave tweak[ed] it [this] year to place more emphasis on higher-yielding stocks
without adding much additional risk. [Dave's] system uses data from DRiPInvesting.org,
Morningstar.com, StandardandPoors.com, and others to find the companies with the best
business models; healthy finances; strong earnings, low debt, and other solid fundamentals; a
decent analyst backdrop; yield higher than 3.0% with a three-year total percentage dividend
increase of at least 16%; a history of raising the dividend; and a reasonable stock valuation.
The sweet spot contains companies with a high enough yield to be worthwhile, and a growth
rate of that yield that is sustainable.
That rather lengthy, thorough process winnowed [an original universe of 700 potential
candidates down to this year's Top 40]. The book presents this year's top 40 in four tables,
each with a different sort parameter: alphabetically, by company quality score, by total score
(company quality + valuation), and by current yield percentage. The top five dividend yields
are: 9.8% 8.4% 8.2% 7.6% 7.3% Each of the 40 stocks is presented on a completed Easy-
Rate score sheet, showing exactly why it made the cut. The completed score sheets are also
useful as examples of the kind of research you need to do on companies outside the compact
list of 40, if you'd like to apply Dave's methods to your own dividend-paying candidates.
Finally, Dave discusses what to do with stocks purchased from 2009's list that did not make
this year's list. In most cases, but not all, he suggests keeping them.
It's another winning edition of this annual survey. Dave sells it in PDF form for $39.
-----------------------------------------------------------------------------------------------------------------------
REVIEW OF 2009 EDITION BY "DIVIDEND GROWTH INVESTOR"
Published May 9, 2009 on The DIV-Net, The Dividend Investing and Value Network
Republished May 16, 2009 on Dividend Growth Investor
As a blogger I often receive offers for different investing services and tools for review. I was
recently offered to review Dave Van Knapp’s book “The Top 40 Dividend Stocks for 2009” by
the book's creator. The book is updated every year with the most current information on
dividend investing and with the best dividend picks according to the writer as well. You could
check my review of last year's book as well.
Last year’s picks from Dave Van Knapp’s book outperformed the S&P 500 by 11%. The list
did lose about 27% in 2008 however. There were 34 dividend increases and only 6 dividend
cuts or freezes.
The book is easy to read and could appeal both to novice and experienced dividend
investors. It is well organized and provides a pretty complete guide to long-term wealth and
income accumulation from dividend stocks.
It starts with an overview of the recent market action, which included many dividend cuts in
2008 and 2009 in the financial sector. The author then provides several reasons why
investors who seek superior long-term returns should invest in dividend growth stocks.
The characteristics of the best dividend stocks are also being summarized in the next pages.
If you had questions on how to create and manage your income portfolio the book would
certainly try to answer those concerns.
One thing that separates this book from other books on Dividend Investing is that the author
provides a list of 40 stocks as attractively valued investment ideas. Dave Van Knapp
describes the methodology he uses to select the best dividend stocks for his readers. Not
only does the book provide a list of stocks, but also includes brief stock analyses on each and
every company in the catalog.
In general I found the book interesting and informative. I enjoyed not only the whole investing
process that the author describes for creating and managing a successful dividend portfolios
but also his overview of special high yielding dividend structures such as Real Estate
Investment Trusts, Canadian Income Trusts, Master Limited Partnerships and Business
Development Companies. Overall I believe that it is a must own book for every serious
dividend investor. It is easy to read, well organized and provides a wealth of information not
only for the novice investor but also for the seasoned pro!
-----------------------------------------------------------------------------------------------------------------------
REVIEW OF 2009 EDITION BY JASON KELLY, author of the best-selling
The Neatest Little Guide to Stock Market Investing
Published March 17, 2009 on Jason Kelly's Web Site
Dave Van Knapp of SensibleStocks.com has just published a new e-book called THE TOP 40
DIVIDEND STOCKS FOR 2009: Dividend Investing for the Long Haul.
From Section 2:
In the last quarter of 2008, the Standard & Poor's (S&P) 500 stock index registered
more dividend cuts and omissions than increases and initiations. That made it the first
quarter in which unfavorable actions outnumbered favorable ones since S&P began
keeping dividend records fifty years ago. At the end of the year, about 370 of the S&P
500's stocks were dividend payers, down 20 from the end of 2007.
Nevertheless, total dividends paid out in 2008 by the S&P 500?s stocks increased
about 1 percent, to about $244.7 Billion. That was the lowest dividend growth rate since
2001.
The total performance of any stock consists of its dividends plus price changes. On a
total-returns basis, dividend-paying stocks outperformed non-payers by about 6
percent in 2008. Part of this was due to the dividends, which are always positive. The
rest was due to comparatively better price performance.
Last year's edition, The Top 40 Dividend Stocks for 2008, recommended 40 dividend
stocks as best-of-breed at the time of publication. Let's see how they did.
Remembering that the principal goal in dividend investing is to create a reliable, ever-
increasing income stream, the Top 40 did very well. Investments in all 40 stocks over
the entire year would have produced the following results:
- 3.7 percent yield, calculated as the total dividends paid in 2008 divided by the sum of
all stocks' prices at the beginning of the year - 34 stocks increased their dividends over 2007, and 6 cut or froze them
- Of course, in addition to receiving dividends, investors are interested in preserving or
increasing their principal. Stocks across the board got hammered in 2008. The S&P
500 lost 38 percent. Our Top 40 Dividend Stocks did better, losing 31 per cent in price
averaged across all 40 stocks. When gains from dividends are factored in (dividends
are always positive), the Top 40's total return was -27 percent.
That is a severe loss. However, as a Sensible Dividend Investor, I don't get too worried
about declines in principal nor too excited about increases. The goal in dividend
investing is to generate ever-increasing dividend streams. That money can then be
used for re-investment or for current income. If you focus on that goal of ever-
increasing dividends, then fluctuations in the prices of the individual stocks take on less
importance. Your attention is on the dividend streams, not on the stocks' prices.
Judging from reader email I received during this bear market, a focus on dividend streams
would be a nice break from price volatility.
his proprietary company quality score, by his proprietary total score, and by current dividend
yield. Those yields range from a high of 9.7 percent to a low of 3.0 percent.
The company with the highest quality score and highest total score sports a yield of 4.3
percent.
Some fun facts about the Top 40:
- The average current yield is 5.1 percent.
- All companies on the list have increased their dividend in each of the past five years.
- Twenty of the companies have raised their dividend for 20 or more years
consecutively. - The three-year average dividend growth of the Top 40 is 16 percent.
- Every company except three has raised its dividend at least 5 percent on average over
the past three years. Three companies that have raised their dividends for at least 20
years in a row were allowed onto the list with 3-year average dividend growth rates of 4
percent.
Not a bad group! Read more about it at Dave's site.
-----------------------------------------------------------------------------------------------------------------------
REVIEW OF 2008 EDITION BY JASON KELLY, author of the best-selling
The Neatest Little Guide to Stock Market Investing
Published May 14, 2008 on Jason Kelly's Web site
Dave Van Knapp of SensibleStocks.com has just published a new e-book called The Top 40
Dividend Stocks For 2008: How (and Why) to Build a Cash Machine of Dividend Stocks.
Like all of Dave's work, it presents the case in logical steps that build a staircase to
understanding and action. Dave is not about flash and show; he's about getting the job done.
The book shows:
- What dividends are
- Why they're a big part of succeeding in stocks
- Characteristics that define the best dividend stocks
- How to create and manage a dividend stock portfolio
- The 40 best dividend stocks for 2008
From page 10:
- "In 1934, Benjamin Graham and David Dodd wrote in their classic Security Analysis,
"The prime purpose of a business corporation is to pay dividends to its owners
[emphasis added]." Many investors agreed, considering the possibility of stock price
increases to be speculative in comparison to a steady flow of dividends.
"But 66 years later, by the end of the bull market of 1982-2000, there was far less
interest in dividends among investors. The humongous rise in share prices during the
long bull market dwarfed dividends' contribution to total returns. Many investors'
interest in dividends dropped to near zero.
"But times change. The bursting of the bubble from 2000-2002 sobered up many
investors. There has been a rekindling in appreciation for dividends. Investors realize
that a dividend stock portfolio can lower risk, grow principal, and steadily increase
income over time.
"Dividends are stocks' secret weapon. Studies show that -- despite their relatively small
contribution during the bubble years -- dividends have accounted for half or more of
the total return of the stock market over very long terms. This may be surprising
considering how little publicity dividends get. There is no widely followed dividend index
that gets the kind of publicity bestowed every day on the Dow, the S&P 500, and the
NASDAQ -- all of which reflect price changes only, and therefore give a very incomplete
picture of "how stocks are doing."
"Dividend stocks are attractive as a core investment for anybody. Common
misperceptions are that dividend stocks are slow-growing, boring investments; that a
company's payment of dividends is a sign of weakness, that the company cannot think
of anything better to do with the money; and that dividend stocks are good only for
retirees needing income. These are all incorrect, unless you consider steady income
and wealth-building to be boring.
"In fact, dividend stocks may just be the best investment that anyone can own."
Dave explains his Easy-Rate scoring system for assembling the best dividend stocks. It looks
at earnings, revenue growth, debt, and dividend history to assign points based on their
values. A stock's points make it easy to see if it's Excellent, Good+, Good, Fair+, Fair, Poor,
or Bubble.
Dave then runs his own system to come up with the top 40 current dividend stocks, presented
in four tables for easy reference: alphabetically, by quality score, by total score, and by
current dividend yield.
You may be surprised by some of the stocks not on the list. A sampling from that group:
- Boeing (yield too low)
- Citigroup (average 5-year return too low; cut its dividend)
- ExxonMobil (yield too low)
- Pfizer (made list of finalists but was outscored by others)
Among the 40 winning stocks, the highest yield is 9.0% and the lowest is 2.1%. The book
includes completed Easy-Rate Scoresheets for each of the 40 winners.
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