Stocks that pay dividends are always better than the ones that don’t pay.Its true that dividends are not guaranteed and that they can be reduced or canceled at any time. Companies like Washington Mutual(WU), National City(NCC), Bank of America(BAC) are some recent examples.However in the long run, dividends form a significant part of a stock’s total return (Total Return = Dividend Return+ Stock Price Appreciation).
One of the ways of identifying is to select stocks from the Dividend Aristocrats Indices published by S&P. The S&P Europe 350 Dividend Aristocrats Index contains “large cap, blue chip companies within the S&P Europe 350 that have followed a policy of consistently increasing dividends every year for at least 10 consecutive years.” Three stocks from this index is listed below:
1. NOVO NORDISK A S (NVO) is a Denmark-based health care company specializing in the care of diabetes. The current yield is 1.90% and the P/E is 22.16. NOV had a total revenue of $7.8B last year and the stock has a 5-star rating by S&P. Dividends have increased at about 20% annually over the past 5 years.
2.Basel,Switzerland based Novartis AG (NVS) is a drug company manufacturing a variey of medicines.NVS has been almost flat over the past 52 weeks.Earnings growth in the past 5 years is 12.5%. NVS pays a dividend of 3.02% and it has a market cap of $119B with 2.3B shares outstanding.
3.SANOFI-AVENTIS SA(SNY) is a Biotechs and Drugs firm in France. SNY has a dividend yield of 5.55%. It markets Ambien CR, the famous drug for insomnia. SNY has fallen about 32% in 52-weeks. Dividends has increased at an annual rate of 26% over the last 5 years.
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