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More on Dividend Growth Investing:
I think that building a portfolio filled with dependable income machines that pay fat dividends is one of the best ways to supercharge your retirement because it can enable you to retire on less principal than you otherwise would need if you were following the 4% rule. This is because if a company has a durable investment that pays out a very dependable dividend, especially if it grows over time at a pace that beats inflation and is at a yield significantly above the 4% level, you can effectively live off of that dividend indefinitely. The reason for this is that dividends provide a much more consistent sequence of return than simply selling your shares.
Mortgage REIT PennyMac Mortgage Investment Trust (PMT) issued a new bond – the 9% 2030 (PMTV) which, at a yield of 8.35%, is trading at a decent pickup over its sister bond PMTU. The company did well over COVID and OK since 2022. There are 4 business lines – Agencies, Credit Risk Transfer, MSRs and correspondent production, the latter is less common in the sector. The company has three preferreds – all fixed rate (though this is being litigated at the moment) with yields in the range of 8.2-8.6%. Given the yield of 8.2% on PMTV, the preferreds look expensive.
The information presented here results from integrating two data sources: the “U.S. Dividend Champions” spreadsheet from a specific website and upcoming dividend data from NASDAQ. This integration merges data on companies with a track record of consistent dividend growth with their anticipated future dividend payments. It’s crucial to note that every company on this list has maintained a record of dividend growth for at least five years.
US equity markets remained under pressure this week – declining for the sixth time in the past seven weeks – as encouraging inflation data and a deal to avoid a government shutdown were offset by further tariff escalations and data showing a notable deterioration in consumer confidence. With the Federal Reserve in its “quiet period” ahead of next week’s rate decision, markets struggled to agree on how the FOMC will interpret the latest economic data, as much of the “hard data” – CPI, PPI, and jobless claims – showed encouraging trends of easing inflation and resilient labor markets, while essentially all of the “soft data” – PMI business surveys, consumer expectations, and corporate commentary – painting a far bleaker picture of looming stagflation.
Furthermore, the fascinating thing is that after more than a decade of nonstop outperformance of American stocks (American exceptionalism), European equities have made an impressive comeback. As we can see below, European value stocks have outperformed U.S. growth stocks nonstop since the end of 2024. Due to this performance, the two assets have performed equally since early 2024 (see below).
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