Best US Dividend Stocks

Back in August, I created a filter to find the best US dividend stocks. My criteria were the following:

– Dividend yield over 3%

– Stock price over $10.00

– Payout Ratio under 60%

Then, with your comments, I decided to pull out another search for the Top US dividend stocks by changing my filters for the following:

– Dividend yield over 3%

– Maximum dividend yield 7%

– Payout Ratio under 60%

– Dividend growth (min 5% annualized growth over 5 years)

– P/E ratio under 15

As you can see, we have taken out the stock price as some readers were pointing that some great dividend stocks can be found within the lower end of the ticker. On the other hand, I have put a maximum dividend yield of 7% since I think that “overpaying” dividend stocks would likely include some dubious prospects.

I think the most interesting part was to add the dividend growth to my dividend stock filter. The real power of dividend investing is found within the dividend growth on a long term investment period.

Here are the Best US Dividend Stocks:

I pulled out my data back in mid October so some numbers might be off slightly (especially dividend yield).

This is with no surprises that my first stock pick, JNJ (which is yet to be bought since I’m having problem with my corporate brokerage account) is part of the list. On the other hand, high dividend paying companies that are part of the tobacco industry were taken off that list mainly because of their higher payout ratio. Even Universal Corp didn’t make the cut since their dividend growth slowed down over the past 5 years. In the end, it is simply the reflection of a declining industry…

I’ll come up with the best Canadian dividend stocks on next Monday with the same approach. You will see, there is not much to build a portfolio from!

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