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Three Charts Every Income Investor MUST See

By Brett Eversole
Monday, October 31, 2011

Make sure you get paid...
That's the key to making big, long-term stock market returns.
And if you're a regular DailyWealth reader, you know that blue-chip, "basic" companies are the ultimate way to get paid in stocks. My colleague Dan Ferris refers to them as World Dominating Dividend Growers. These companies throw off the world's most reliable dividend streams... which is the major reason their share prices held steady while most other stocks were hammered in August.
If you haven't bought these income machines yet, you're not too late. In fact, now is one of the best times for income investors to get in on this idea in decades...
To explain why, I just need to show you three charts.
We'll start with a unique chart of Intel, the world's largest semiconductor maker. Intel sells about 80% of the world's semiconductors. This dominant position allows it to reliably rake in cash flows and pay dividends. Intel has raised its dividend by 950% since 2003. Earlier this year, it bumped the dividend payout another 16%. The current yield of 3.4% is near a record high.
The price chart below features an extra "pane" at the bottom. This pane displays Intel's historic dividend yield. As you can see, Intel's current yield is near an all-time high. In other words, one of the world's best companies is treating shareholders as well as it ever has...
But it's not the only one...
Microsoft is a lot like Intel. It dominates its industry. It makes boatloads of cash. Microsoft currently holds a net cash position of over $40 billion. Just last month, Microsoft announced a 25% increase to its dividend. This helped push its dividend yield near an all-time high. As you can see, Microsoft has only sported a higher yield once... during the depths of the financial crisis.
Let me show you one more example, just to drive the point home...
Altria dominates the cigarette business. It has raised its dividend by 41% since 2008... including an 8% increase this year. I expect these increases to continue year after year. You can see in the chart that Altria has only had a higher yield after the share price crashed. Today, shares yield a fat 6%.
I could have featured half a dozen more charts, too.
Current Yield
Average Historical Yield
Abbott Labs
Johnson & Johnson
Procter & Gamble
The companies above are some of the best businesses in the world. They're all bringing in tons of cash and distributing it back to shareholders. On average, their current payouts are 68% higher than their historical averages.
When dividends climb to record highs, it's another way of saying the stocks are record-cheap. When you buy now, you're locking in a great price... and a yield much higher than the average investor has with these stocks. Buy cheap and make sure you get paid. This is the key to getting rich in stocks... And as you can see, right now is a great time to get started.
Good investing,
Brett Eversole

Further Reading:

Dan Ferris' World Dominating Dividend Growers are the best businesses on earth. "Their balance sheets are financial fortresses. Their businesses are incredibly difficult to compete with," he writes. "They earn consistent profit margins, a sign of their superior ability to compete." Read more here: This Investment Is Safer – and Pays More Income – Than Gold.
"These elite cash payers are close to the Holy Grail for investors: They're offering higher returns with less risk," Brett writes. "If you're considering buying stocks for the long-term, these should be at the top of your list." Learn more here: If You Own These Stocks, You Don't Care About a Market Decline.

Market Notes

Intel (INTC)... World Dominator
Wal-Mart (WMT)... World Dominator
McDonald's (MCD)... cheap food
Whole Foods (WFM)... expensive food
Nike (NKE)... shoes & apparel
Under Armour (UA)... shoes & apparel
Bristol-Myers Squibb (BMY)... Big Pharma
Domino's Pizza (DPZ)... Big Pizza
Starbucks (SBUX)... Big Coffee
Intuitive Surgical (ISRG)... robotic surgery
Macy's (M)... department stores
Contango Oil & Gas (MCF)... oil & gas
Enterprise Products (EPD)... oil & gas pipelines
Williams Partners (WPZ)... oil & gas pipelines
Monsanto (MON)... agriculture
Kansas City Southern (KSU)... railroads

Not many... S&P 500 on pace for best month since 1974

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