Three Solid Dividend Payers to Grow Your Portfolio
Marc Lichtenfeld|May 9, 2023
A Note From Amanda: Inflation is creating a retirement crisis in America. But income expert and bestselling financial author Marc Lichtenfeld of The Oxford Club says the solution might be in one of the most unlikely places: oil. And a strange investment (open to everyone) could hold the key to saving your retirement. It’s NOT a stock, bond or private company… which means you can escape the chaos and volatility we’ve seen lately. It’s easily the #1 oil and natural gas income play for 2023… and it’s less than $25!
Get the details from Marc on this “strange” income play here.
Some of you may know me as the dividend guy. I literally wrote the book on dividends.
The key to successfully investing in dividends is to buy stocks that raise their dividends every year. That way, you are keeping pace with or beating inflation and maintaining or increasing your buying power every year.
Think about it this way. If a product costs $100 this year and inflation is 5%, that product will cost $105 next year. If you receive $100 in dividends this year and your dividend increases by 8% next year, you will receive $108. So the increase in dividends will allow you to keep up with (and even beat) inflation and afford the new $105 price tag.
So it’s important to find stocks that increase their dividends annually.
The energy sector is a great place to look for them.
Oil and gas stocks tend to have solid dividend yields because they generate a lot of cash flow. A well-managed energy company grows its cash flow – or at least manages it well enough to increase the payout to shareholders – each year.
Here are a few energy stocks that investors who want to grow their income every year can take a look at. Each of these companies’ free cash flow is at a 10-year high.
- Chevron (NYSE: CVX) is an oil giant with nearly $38 billion in free cash flow. That makes its $11 billion in dividends very affordable.
Chevron has an impressive dividend-raising history – with 33 straight years of increases beginning in 1990. The dividend has grown at a compound annual growth rate of nearly 7%. The $1.51 per share quarterly dividend equals a 3.7% yield.
- One Gas (NYSE: OGS) is a gas utility that serves more than 2 million people in Kansas, Oklahoma and Texas. In 2022, it generated nearly $1 billion in free cash flow while paying out just $133 million in dividends, so it has plenty of room to raise the dividend in 2023.
Considering it has lifted its dividend for nine straight years, it seems very likely that it will continue to do so.
One Gas has raised its dividend by a compound annual growth rate of 9.8% since 2014 – more than enough to beat inflation. The current yield is 3.3%.
- Phillips 66 (NYSE: PSX) refines and transports oil. The $8.6 billion the company generated in free cash flow in 2022 easily covered the $1.8 billion it paid to shareholders in dividends.
Phillips 66 has increased its dividend every year for the past 12 years. Over the past 10 years, the company has boosted the dividend by an average of 10.4% per year. The stock yields 4.2%.
Owning dividend growth stocks is a conservative and time-tested strategy for growing your income and your wealth. And the energy sector is a prime spot to search for dividend growth stocks.
If you’re interested in an energy play that is 100% outside the stock market, you need to check out my presentation on the #1 oil and natural gas income play for 2023.
One man turned a single $1,000 investment in this asset into $100,000 a year for 50 years… That’s like earning a 10,000% dividend!
Get all the details on this income play here.
Marc Lichtenfeld|Chief Income Strategist, The Oxford Club
Marc Lichtenfeld is the Chief Income Strategist of The Oxford Club. After getting his start on the trading desk at Carlin Equities, he moved over to Avalon Research Group as a senior analyst. Over the years, Marc’s commentary has appeared in The Wall Street Journal, Barron’s, and U.S. News & World Report, among others. Prior to joining The Oxford Club, he was a senior columnist at Jim Cramer’s TheStreet. Today, he is a sought-after media guest who has appeared on CNBC, Fox Business and Yahoo Finance. His book Get Rich with Dividends: A Proven System for Double-Digit Returns achieved bestseller status shortly after its release in 2012.
Marc is the Senior Editor of The Oxford Income Letter, which is based on his proprietary 10-11-12 System. He is also the Editor of Technical Pattern Profits, Penny Options Trader and Oxford Bond Advantage.