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If you’re looking for stocks to buy and hold, here’s a strategy as well as a few names you should know about.
The strategy is simply dividend investing. If you think that’s sounds complex and like it’s going to involve a lot of math – think again.
- Cramer’s Top 5 Dividend Plays
Dividend investing simply means taking positions in stocks with a rising stream of dividend income.
Okay. So what kind of criteria should you use? Goldman Sachs recently released a new piece of research on this strategy. They recommend the following:
- Companies with at least 3% yield. - Companies with a consistent dividend history. - A likelihood of dividend growth. - No companies with debt-to-equity greater than 100% - Only companies that are "buy-rated"
If that 3% yield seems a little out of left field it’s because historically inflation rates have been around 3% over the past century. Therefore, by focusing on companies, which have a long history of dividend increases of over 3%, you beat inflation – at least on average. (That little tid bit comes from GuruFocus.com)
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