The Investment You Might Want To Make Right Now | Summary and Q&A

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June 22, 2022
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The Investment You Might Want To Make Right Now

TL;DR

Three dividend growth stocks, AbbVie, Abbott, and NextEra Energy, have proven track records of increasing dividends and outperforming the market. Consider these stocks for consistent and growing income.

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Questions & Answers

Q: Why should I consider investing in dividend growth stocks?

Dividend growth stocks offer the potential for consistent and growing income, which can be especially beneficial during a bear stock market. Dividends can also provide a cushion against inflation and rising interest rates.

Q: What is a dividend aristocrat?

A dividend aristocrat is a company that has increased its dividend for at least 25 consecutive years. AbbVie and Abbott both hold this status, indicating their long-term commitment to rewarding shareholders with consistent dividend growth.

Q: How has NextEra Energy performed compared to the overall market?

NextEra Energy has outperformed the S&P 500 in recent years, suggesting strong performance and potential for future growth. This makes it an attractive option for investors seeking both income and capital appreciation.

Q: How can dividend growth and reinvestment impact overall return?

By reinvesting dividends and benefiting from dividend growth, investors can compound their returns over time. This can significantly enhance total return, as demonstrated by the example of Abbott's stock value increasing to $14,283 with dividend adjustments, compared to $12,921 based on share price alone.

Summary & Key Takeaways

  • AbbVie and Abbott, once the same company, have both become dividend aristocrats with long histories of increasing dividends.

  • NextEra Energy has a 28-year track record of dividend increases and has outperformed the market in recent years.

  • Using dividend growth and reinvestment can significantly boost total return for dividend growth stocks like Abbott.

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