More Of The Best Long Term Dividend Stocks

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Dividend Stocks Research
More Of The Best Long Term Dividend Stocks
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• Hi, My name is Aaron and Im with Dividend Stocks
  Research, today were reviewing our recently
  published article

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• More Of The Best Long Term Dividend Stocks

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• Last month, on a rare rainy morning in Southern
  California, I headed up I5 toward LA. The traffic
  clogged at Del Mar. Looking off through the gray
  dawn at the racetrack I thought about its honored

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• guest, 2015 Triple Crown Winner American Pharoah.
  American Pharoah is the first horse to win the
  Triple Crown since 1978. And this achievement got
  me thinking about what was going on back in

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• 1978, which was not one of the markets better
  years. The Dow started off at 831 and wound up at
  805. But dividend investors made out fine. SP
  500 stocks paid an average yield of 5.39.

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• Which just goes to show that down markets dont
  hurt as much when the dividends are rolling in.
  And as markets sputter, dividend stocks will be
  able to soften the blow of lower share prices
  because of the dividends they pay.

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• Dividend stocks hold up better when the market
  goes down. Look at 2008... The Standard Poors
  500-stock index took a 37 hit. But the SP 500
  Dividend Aristocrats only went down by 22.

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• The SP 500 Dividend Aristocrats have been
  growing their dividends for the past 25 years.
  But enough of 1978 and 2008.

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• Lets pay our respects to Triple Crown Winner
  American Pharoah and try to make some sense of
  2015. One of the key questions we should ask is...

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• Are The Best Long Term Dividend Stocks Too
  Expensive?

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• Well, theyre definitely not cheap, especially
  when it comes to the SP 500 Dividend
  Aristocrats.
• But now and then you can even find the Dividend
  Aristocrats on sale.

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• You pay for quality. Thats pretty much a given.
  Youre not just buying income, but youre
  depending on the companys ability to
  consistently grow the dividend year after year.

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• After all, dividends arent much good if you
  cant count on them to keep rolling in. Are there
  traps you should watch out for? Definitely. One
  of them is investing in a stock where the
  companys products

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• might not make it through a rough stretch. Even
  though youre investing for the long-term, youre
  going to hit cycles. Just ask a gold miner or a
  homebuilder.

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• Right now, we see down cycles with energy
  companies and the big global banks. But peel back
  the layers and look more closely. Dont lump
  every stock in the same basket, and youll turn
  up some interesting opportunities in bank stocks.

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• Why The Right Small Banks Can Be Some Of The Best
  Long-Term Dividend Stocks

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• Look carefully and youll discover there are
  still some smaller, regional banks that have been
  able to keep growing their dividend for the past
  ten years. When Bank Of America BAC and JP
  Morgan Chase Co.

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• JPM stumbled and cut dividends a few years back,
  a handful of smaller banks weathered the storm.
  If you are looking for the best long-term
  dividend stocks, and youre not too fussy about
  growth,

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• small banks offer some interesting opportunities.
  These probably arent stocks where youll pile up
  capital gains, because the share price likely
  isnt in a position to grow.

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• And keep in mind that even though small banks
  have made it through the financial meltdown,
  theyre for the most part battered and bruised.
  This is a business of the weak and the strong,
  the hunters and the hunted.

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• Dont be surprised to see consolidation. But
  business fundamentals are improving. Loan
  quality looks to be growing stronger. Here are 3
  small bank stocks that pay dividends.

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• 1st Source Corporation SRCE
• Bank Of The Ozarks OZRK
• Commerce Bancshares CBSH

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• 1st Source Corporation SRCE pays a 2.06
  dividend yield. Its been growing the dividend
  for 29 years and the Dividend Payout Ratio is
  30.4.

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• Bank Of The Ozarks OZRK pays a 1.23 dividend
  yield. Its been growing the dividend for 4
  years and the Dividend Payout Ratio is 27.34.

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• Commerce Bancshares CBSH pays a 1.87 dividend
  yield. Its been growing the dividend for 46
  years and the Dividend Payout Ratio is 33.1.

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• The Right Price To Pay

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• Right off the bat you see that Bank Of The Ozarks
  got in trouble a few years back and had to cut
  the dividend.
• Why invest in OZRK with its skimpy 1.23 yield
  when its only been growing dividends for the
  past 4 years?

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• When you compare it to Commerce Bancshares and
  1st Source Corporation, it comes in a distant
  third. Not exactly Triple Crown material. Bank
  Of The Ozarks is expensive with a P/E ratio of

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• 27, and its trading right now near its 52 week
  high. But earnings are strong and its making
  acquisitions. What about Commerce Bancshares and
  1st Source Corporation?

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• Commerce Bancshares has also been trading near
  its 52-week high. But the P/E ratio is good,
  just a sliver over 18.
• The same story for 1st Source Corporation, but an
  even lower P/E at 14.

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• And this raises an interesting question. If
  youre trying to decide between 1st Source
  Corporation and Commerce Bancshares, do you use
  the lower price earnings ratio as your tiebreaker?

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• There can always be different reasons for a low
  P/E ratio. Maybe the stock is undervalued by the
  market for no good reason. Maybe its
  undervalued because nobodys terribly excited
  about its future.

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• In the case of 1st Source Corporation with a low
  P/E of 14 , youve got the classic case of a
  stock thats flying under the radar. Its
  followed by just one analyst.

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• But why not invest in both? Diversifiy your
  risk. Just dont load up on too many small bank
  stocks. The sluggish economic recovery means the
  loan portfolios could still trigger a few

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• surprises, even with examiners keeping a watchful
  eye on things. And as for the price you pay for
  the best long-term dividend stocks... Strike a
  balance. Be just as concerned about paying too
  little as paying too much.

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