This year is becoming the year of “World Dominating Dividend Grower” stocks.
While stock markets around the world struggle – and stocks in sectors like coal, steel, oil, and gold slide lower – Dan Ferris’ World Dominating Dividend Growers (WDDGs) are steadily marching to new highs.
Stocks like Coca-Cola (KO), Wal-Mart (WMT), Johnson & Johnson (JNJ), and Abbott Labs (ABT) are among the market’s best performers (and best dividend-payers).
Back in January, I noted how blue-chip dividend-paying stocks were set to become the “fashionable thing” on Wall Street…
… dividends are sizing up to be this year’s “momentum trade.”
Over the past few years, we’ve stressed the importance of dividends and high-quality stocks dozens of times.
In a world full of risk and fraud, getting paid steady and growing dividends is one of the market’s best strategies.
You can read a few of our best pieces on the idea here, here, and here.
This idea was heavily “stress tested” in 2011. The broad market went through huge swings… and was crushed during the summer panic. Some of the market’s riskier companies fell 25%-50% in just a few months. But most of our favorite dividend payers – like Coke, Intel, and Wal-Mart – held up just fine. Read about this phenomenon right here.
Our guess is that, in 2012, more and more people recognize the safety and income-producing power of basic dividend payers. With interest rates low, the fashionable thing on Wall Street will be for fund managers to say, “I own blue-chip dividend payers.” This will send a flood of new money into these stocks. Corporate managers will see the share prices of divided payers rise… so they will hike payouts. This will create a “momentum” trade in dividends.
As we expected, this “dividend momentum” has sent shares of Wal-Mart (WMT), Johnson & Johnson (JNJ), Coca-Cola (KO), and Abbott Labs (ABT) soaring.
The most impressive performance has come from Wal-Mart, which you can see below. (Congratulations to Dan for exhorting subscribers to buy Wal-Mart about 2,000 times…)
– Brian Hunt
Source: The Growth Stock Wire
