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Nucor (NUE) & The Golden Dividend Ratio

There has been a lot of talk about value traps recently. With dozens of companies slashing or halting their dividends, many income investors have seen a “double whammy” of lower portfolio values and lower revenues.

And while it’s real easy to find losers, the dividend winners are much harder to find.

Seven that Money Magazine looked at include 3M (MMM), Johnson & Johnson (JNJ), PepsiCo (PEP), Emerson Electric (EMR), Nucor (NUE), Dover (DOV) and Clorox (CLX)

These dividend stocks all have something interesting in common - in addition to the fact they’re each raised dividends for at least 25 years. It’s their yield.

The yields on these companies range from 3.1% to 3.8%. Consider it the “golden ratio” of dividends. It laymen’s terms, it’s the amount a company can comfortably pay out while still keeping enough for reinvestment and growth.

Looking at the growth rate of their stocks, the worst performer, 3M, has only returned a 447.1% return over the last 25 years. It’s annualized return of 17.88% still beats the S&P’s (.INX) 16.36%. The best performer from that group, Nucor, has an annualized return of 100.25%.

It should give investors pause about investing only in the highest yielding stocks.

Research Team

INVESTMENTU

www.investmentu.com

About the author:

INVESTMENTU
StreetAuthority, LLC is a research-intensive financial publishing firm that aims to level the playing field for small investors by giving them access to the ideas and insights of some of the country's top investment researchers, analysts and writers. Although we specialize in income and international investment research, we publish a wide variety of newsletters that are geared towards helping EVERY kind of investor profit from today's volatile marketplace. Visit StreetAuthority.

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Comments

rozer
Rozer - 5 years ago
I see the total return of 447%, but how did you arrive at the 17.88% annualized return?

thanks

Please leave your comment:


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