4 Things a Dividend Farmer Needs: Ground

Money Ground

Without ground in which to plant, it’s hard to farm.  The same is true of dividend investing.  Without dividend paying companies in which to invest, it’s hard to be a dividend farmer.  So where can dividend investors find ground, maybe even good ground?

You could start by asking crazy Uncle Harry or your wild-eyed neighbor for investment tips, but I’m not sure I’d start there.

There are plenty of dividend-related blogs in the investing universe that offer ideas and analysis.  Be wary… the blog you’re looking at might be written by your crazy Uncle Harry or wild-eyed neighbor so proceed with care.

Having a conversation with a trusted financial professional is a sound course of action.  While I’ve gone down this road, I’ve found investment advice tied to brokerage commissions is a drag on your portfolio performance if you commit to buying through the broker providing said advice.

With that in mind, however, some brokerage tools can be helpful.  For instance, Fidelity account holders can use the firm’s stock screening tools to find dividend payers, but the filters are limited.  I’d imagine most brokerages offer similar tools which are good, but not great.

Yahoo Finance and similar sites are also sources of dividend investing ideas.  You can plug in a company name or ticker symbol and pull up a variety of information about the company in question.  This information normally includes the dividend payment and yield, but not always.  While this is generally a good source to check, you might find yourself searching for needles in a haystack as you plug one name or symbol into the tool after another, looking for potential dividend farming opportunities.

One very useful source I’ve discovered over the years is the DRIP Investing Resource Center.  Started over two decades ago by David Fish, the site provides regularly updated lists of Dividend Champions, Contenders, and Challengers.  The Champions, Contenders, and Challengers lists consist of companies that have raised their dividend payments for consecutive years:  Champions (25 or more years), Contenders (10-24 years), and Challengers (5-9 years). 

Fish's list provides more than an alphabetical breakdown of the companies in each category.   For example, you can see annual dividend growth rates in nominal dollars as well as percentage growth rates for each year in the period as well as current dividend payments and yields.

I’ve found the spreadsheet of Champions, Contenders, and Challengers to be a great resource for sourcing good companies with long histories of growing dividend payments.  If I’m going to plant investment money and take advantage of the reasons Dividend Stocks Beat Non-dividend Stocks, then planting money in good companies is equivalent to planting crops in good ground.

The thoughts and opinions expressed here are those of the author, who is not a financial professional, and therefore should not be considered as investment advice.  This information is presented for education and entertainment purposes only.  For specific investment advice or assistance, please contact a registered investment advisor, licensed broker, or other financial professional.