3 Companies That Keep Boosting Dividends Year After Year

Since the turn of the new millennium, the U.S. economy has suffered two major
shocks: the collapse of the Internet bubble and the collapse of the real estate
bubble. This double whammy has revealed massive errors committed during the past
15 years or so by banks, investors, home buyers and business chieftains. In
hindsight, is it any wonder the stock market has made no net progress since the
beginning of 2000? Indeed, whatever meager return the S&P 500 Index has achieved
in the new millennium is due entirely to dividends . Measured by price change
alone, the index is down 21% since Jan. 1, 2000 (through Sept. 28). Sure, there
have been individual triumphs like Amazon (NASDAQ: AMZN ) and Apple (NASDAQ:
AAPL ). However, the list of failures is a mile long. Chasing capital gains,
without regard to current income, has been a largely futile quest. This long
drought will end someday when the next mega-bull market begins. I've got to
level with you, though. It might well take another three to eight years before
the big liftoff. First, governments on both sides of the Atlantic must face up
to the fact that they've promised more retirement, health care and other
benefits than they can pay for without destroying economic growth. A painful
restructuring is coming. Once investors know the terms of the settlement, stocks
will launch into another great long-term uptrend like that of 1982-2000. Until
then, our job is to play our cards as shrewdly as possible, exploiting every
edge we can find. Three Powerful Advantages With our focus on dividends and
interest, we've got a powerful leg up on investors who overlook these three
factors: Income-producing investments tend to hold their value better in tough
markets. Bonds in particular often go up in price when the stock market is
falling. Dividend-rich stocks initially might drop with the market, but they
generally snap back sooner and recover further than stocks that pay little or
nothing. Over the long run, stocks that deliver generous (and increasing)
dividends usually appreciate, too. Think of utilities, food/beverage/soap stocks
and master limited partnerships. In a low-yield environment, income-starved
investors are drawn to these stocks like bees to nectar. Dividends and interest
are themselves a valuable component of total return. Maybe I'm stating the
obvious, but investors have forgotten this truth in recent years. In the nine
decades since 1930, reinvested dividends have contributed, on average, 53.8% of
the total return from the S&P 500 Index. Share prices might fluctuate, but
dividends always make you richer. Without dividends, you have to rely on the
fleeting and all-too-mortal genius of a Steve Jobs (or a Ken Olsen or an An Wang
remember them?) to keep your money growing. Buy Dividend Boosters Of course, a
dividend isn't worth much if the company can't keep paying it. At this
tricky stage of the market cycle, I advise you to channel the bulk of your fresh
cash into stocks with impeccable records of not only maintaining but also
boosting their dividends year after year. Three I'm particularly keen on at
the moment are: