Looking for investment income? Focusing on yield alone means you’ll miss out on lots of quality companies that pay a smaller dividend, but are still growing and could increase the payout in the future. Looking for companies that check both boxes — dividend payment and growth — can create a powerful compound growth effect over the long term.
Three companies our Fool.com contributors think meet these criteria are Applied Materials (NASDAQ:AMAT), Dolby Laboratories (NYSE:DLB), and Broadcom (NASDAQ:AVGO).
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Don’t pick just one tech theme when you can have many
Nicholas Rossolillo (Applied Materials): As 2020 has unfolded, I keep coming back to Applied Materials, and I see no reason not to again. The company makes equipment for semiconductor and other tech hardware manufacturing, and its engineering research lies at the heart of many important advancements in technology. Whether it’s high-end computing chips for things
Activist investor Daniel Loeb on Wednesday urged Walt Disney Co. to skip paying an annual dividend and instead pour the $3 billion into hits for its streaming television service.
Loeb, founder of Third Point hedge fund, made his pitch in a letter to Disney chief executive Bob Chapek and the board of directors.
Loeb reasoned that skipping a few dollars per share in dividends, the entertainment giant could use the money to more than double its budget for content at Disney+ streaming service.
“Disney has built one of the largest streaming platforms in the world, already within the original 5-year Disney+ subscriber target range of 60-90 million,” Loeb said in the letter, a copy of which was obtained by AFP.
“To further capitalize on this transformational opportunity, we believe the company should permanently suspend its $3 billion annual dividend and redirect this capital entirely into content production and acquisition for
Developing economies remain a compelling avenue for income ideas and one of the more practical ideas for tapping that income stream is the ALPS Emerging Sector Dogs ETF (NYSEArca: EDOG).
EDOG, which debuted over six years ago, tracks the performance of the S-Network Emerging Sector Dividend Dogs Index. The index is comprised of the highest paying stocks, or “Dividend Dogs,” from the S-Network Emerging Markets Index, which holds large-cap, emerging market stocks. The Dividend Dogs include the five stocks in each of the ten Global Industry Classification Standard sectors that make up the S-Network Emerging Markets.
“Emerging markets aren’t among the first places investors typically think of when scanning for dividend stocks, but they can offer reliable and growing payers,” reports Lawrence Strauss for Barron’s. “It’s important to tread carefully, however, given risks such as currency fluctuations and less rigorous corporate governance in certain cases.”
Emerging markets aren’t among the first places investors typically think of when scanning for dividend stocks, but they can offer reliable and growing payers.
It’s important to tread carefully, however, given risks such as currency fluctuations and less rigorous corporate governance in certain cases.
“You can find world-class businesses in emerging markets,” says Giorgio Caputo, portfolio manager of the
JOHCM Global Income Builder
fund (ticker: JOBIX). “The countries that have gotten this right have moved up the ladder from pure manufacturing into IP,” or intellectual property—most notably technology companies. He points to companies in South Korea, Taiwan, and “increasingly mainland China” for making the leap.
The fund’s two emerging market holdings are American depositary receipts of
Taiwan Semiconductor Manufacturing
(TSM), which yield about 2%, and preferred shares of