How many investments have delivered these results;  fifty per cent capital gain in 3.5 years, seventeen percent increase in income?  That dividend growth rate provides more than four percent per year of income increases.



Stocks and Bonds

The stock market has been an equity investor's friend.   The bond market has been a friend as well.  But the bond market cannot deliver the income.

In this blog I pick and monitor stocks I call Dividend Machines.    I also pick discount bonds.  Because bonds are so expensive, few discount bonds are available for the ordinary investor.   Stocks on the other hand are available.   Moreover stock prices move up and down in reaction to things over which the ordinary has no control.   It is a fool's game to try figure out the stock price moves of a specific company, but you can use fundamental data to determine if as stock is the right investment for you.

Look at the 2011 portfolio of Dividend Machines.
 

This portfolio was built from November 2010 through November 2011.  The portfolio is three and one half years old.    If you bought 100 shares of every stock I profiled your investment would be up around fifty percent and the income from you investments would have increased more than seventeen percent.

* See Model Portfolios for holdings  http://www.themoneymadam.com/p/model-portfolios.html

I guess you could do better some where but I am going to stick with TheMoneyMadam's Dividend Machine criteria to pick stocks for the income producing portion of my portfolio.

TheMoneyMadam

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Dividend Machine Scana Corp., SCG

Scana Corporation symbol SCG is a utility in South Carolina; I love Charleston but that is not why I like Scana. I like Scana because not only does it make a lot of money $2.87 per share but also it pays us $1.94 a share.


At the closing price on January 7, 2011 of $41.12, the yield is 4.69%. Scana is number eight of the fifty two dividend machines I will profile for your income investing portfolio.


They make a lot of money but they have enough to continue to reinvest in their business of delivering gas and electric to its customers. Scana has increased the dividend every year for at least 5 years at a 4.6% clip. Their D/E ratio is 1.35 a touch high but tolerable considering the industry. It is expensive to build and deliver energy.


As I suggested in my last post on dividend machines, you need to diversify your holdings among small companies as well as large, and among industries. Historically utilities have been an integral part of every income investor's cash flow strategy. You should not have all your money in utilities but you should have some. Consider Scana as a good dividend machine. Investigate other utilities. Later this week I will discuss some of the nuances of utilities to help you make better choices.


Create your cash flow strategy using dividend machines, bond interest, and covered calls then gradually invest to create enough income to quit working.

Very Truly Yours,

TheMoneyMadam

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