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What five blue chip dividend stocks would you select for your investment portfolio?

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asked Jul 27, 2015 in Investing by JLettermanMB (43,320 points)
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The term 'blue chip' is defined as well established companies with positive progression in the market. These are companies such as Walt Disney, Wal Mart, and Intel to name a few. Now, this question is intriguing as the selection of blue chip dividend stocks can be deceptively difficult for investors.
The general assumption is to aim for a mouth watering dividend and progress from there. It might be naive to approach the task in this manner and the reason comes down to fluctuating numbers. Dividends are not going to fluctuate rapidly since these are established companies, but nonetheless, it isn't smart to blindly select stocks in this manner.

So, what should you be looking to do? Let's break down the process so you'll be able to select your own 'top five'. Plus, we'll take a look at recommended options for your investment portfolio.

Selection Of Dividend Stock(s)

Assessing a company's reputation in the market (i.e. reading the news) is a wonderful stepping stone towards high quality selections [1]. Those who are trying to come to grips with appropriate selections should consider this factor immediately. How reputable is the company? Have they been around for a long time? Does their stock appreciate or depreciate? All of this research should be done well in advance.

The payout on an annual basis should be taken into consideration as well. The last thing one should be doing is blindly purchasing stocks on reputation alone. This might work, but it is not going to yield maximum profitability on your end. Look at the payout ratio and begin to assess the overall value of the stock in relation to its reputation on the market.

Use these factors to make your own list of five high quality stocks.

Personal Opinion

So, which stocks would I recommend at this point in time? Your investment portfolio is going to differ from the next person including your goals for the next 5, 10, and 20 years. However, these five should be sufficient for one and all.

Wal Mart: This is one of those well established companies, which are simply not going to deteriorate over time.  They have a yield of 2.7%. Plus, you will be receiving at least 49 cents per share.

Proctor & Gamble: You receive a 66 cent return on each stock. It is a powerhouse as a company and has limited debts. This demonstrates positive financial health, which is something you can lean on in your portfolio.
IBM: Paying $1.30 per share, this is one of those high payout ratios, you are not going to see with other options. IBM has been around for a long time and is truly a safe bet at this point in time. They have seen significant growth over the past few years.

GM: They pay on a quarterly basis. You are able to get 36 cents per share. Their net income has been ascending in recent times and this alone is reason enough to purchase these stocks [2]. Add in their reputation and they are a great addition to your investment portfolio.

Coca-Cola: There isn't a lot to be said about this brand and company concerning its popularity and power in the market. It provides a quarterly share of 33 cents per stock [3]. It is a must buy for any investment portfolio.

Remember, to always mix things up with these assets and stick to your guns instead of selling early. This is a passive income stream for those who make the most of it.

References

1. http://www.forbes.com/sites/robertlaura/2013/09/29/three-easy-ways-to-select-and-compare-dividend-stocks/

2. http://www.thestreet.com/story/12825278/10/warren-buffetts-top-10-dividend-stocks.html

3. http://www.thestreet.com/story/12825278/9/warren-buffetts-top-10-dividend-stocks.html
answered Jul 27, 2015 by kingusama92 (23,380 points)
selected Jul 27, 2015 by JLettermanMB

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