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Five great stocks for sustainable income | The Mesh Report

Five great stocks for sustainable income

the Mesh Report Staff April 26, 2016 0

There are two great reasons to put your money to work in the stock market. The first reason being that stocks tend to move higher over time. The second is the added income a portfolio filled with dividend-paying stocks can provide.

This week I want to take a look at dividend paying stocks, and in particular a handful of stocks that have proven an ability to provide sustainable income for years down the road.

Depending on your overall investing strategy, you may prefer to receive your dividends in cash as they arrive, but I prefer to have all my dividends reinvested. This allows the position to grow over time, and with the power of compounded interest, each dividend payment should be fractionally higher than the previous payment.

Not only does dividend reinvestment allow you to slowly grow your holdings, if you focus on stocks with a history of annual dividend increases, then once a year your distributions will get a nice boost, and provide even great reinvestment power.

Investors who focus on pure stock price appreciation look for quick gains, but for dividend investors, the road to wealth is a little slower, but slow and steady often wins the race. Dividends are great, but obviously you also want to try to buy stocks with he potential to rise in value as well, which is a great reason to take a closer look at the following five stocks that offer great sustainable income for your portfolio and have recent market strength as well.

McDonald’s

Fast-food leader McDonald’s (MCD) stalled out for a couple years, but some smart management decisions has once again put the company on the right path, and the stock has reacted positively. One of the smartest decisions was to implement all day breakfast, which has been a major success for the company. During the company’s most recent quarter, the earnings grew by 22%. This marked the third consecutive quarter of double digit earnings growth, something the company has not enjoyed in five years. Same-store sales in the U.S. were up 5.4%, proving that the company’s turnaround program is working, and should lead to additional earnings growth. MCD offers a 2.7% dividend yield, and the company has boosted its dividend each of the last 39 years.

MCD160425

Chart courtesy of www.stockcharts.com

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