It is hard for an investor to get paid in a ZIRP (zero interest rate policy) world.
One popular refuge for income investors has been dividend-paying stocks, which have provided cash flow as well as some nice appreciation over the past three years.
However, it is important to understand that dividend investing is not without risk. In particular, one should recognize that income stocks come in a variety of flavors, with significantly differing expectations for long-term consistency.
The core of an equity income portfolio is typically a handful of solid, steady blue chip stocks that have a long history of maintaining or increasing the dividend year in and year out.
Standard & Poor’s maintains a list of “dividend aristocrats,” stocks that have paid a stable or increasing dividend each quarter for at least 25 years. The aristocrats include many familiar names: Exxon, 3M, Coca-Cola, Proctor and Gamble and Walgreens.