Top Stocks To Buy For Every Investor – Top 10 Dividend Stocks To Buy Now

There are many investors around the world who want to know how to find the best stocks to buy in these tough economic times. This is especially true with the recent market selloff in the summer of 2011 with a possible European debt crisis. There seems to be a slim chance of another global financial crisis if Greece and Italy don’t get support. However, this time is different from 2008 for many reasons, and US banks are certainly much better capitalized now. I’m not predicting another recession or financial meltdown right around the corner, and I think the recent market weakness is a very good time to add quality dividend stocks to your retirement account.

Most investors don’t realize how powerful investing in solid dividend stocks that pay high yields year after year can be. For example, dividend-paying stocks produced an average annual return of more than 10% from 1970 to 2005. That’s six percent more than non-paying stocks in that same period. How important is another six percent annualized over 25 years? Instead of ending up with $200,000 of an initial investment of $50,000, you would have created enough to be a millionaire. Also, investing in some of the dividend stock picks we suggest here could provide strong dividends and double-digit growth over the next five years or more. That could produce a return of more than 20% annualized.

In my opinion, especially with the current market uncertainty and during a slow recovery cycle, investors should own quality stocks that consistently pay cash dividends. It is simply a good investment strategy in good and uncertain times. Everyone seems to have forgotten about these dividend stocks in the last decade, but dividends are the number one way to make money in stocks in the long run.

If you’re going to get rich in stocks, one way is to get lots of dividends and then reinvest those dividends. Referring to a study of the period from 1872 to 2000 in his book Behavioral Investing, analyst James Montier showed that dividend yields provided more than 50% of the total return on stocks. There is no question that the best stocks to buy for long-term wealth creation are high-quality dividend stocks.

I recommend using several important fundamental criteria when evaluating stocks with strong dividends. The first is if the company has a price/earnings (PE) ratio < 14. The historical market average is about 15 and the modern market PE is about 17. So, for the price to actually go up, the PE you should have room to return to the historical or modern average of the ratio. The second critic is showing consistent growth over time with strong year-over-year gains. The third is considered a great advantage, and that is that the company has a history of consistently increasing the dividend each year. Some other criteria that may be helpful are to look for companies with a price-to-book ratio < 2.0 (historical average is 1.94) and price-to-sales ratio < 1.0 (historical average is 0.86).

For this article, I focused my efforts on finding a diversified group of 10 very solid dividend stocks suitable for anyone’s retirement portfolio. These companies are fundamentally sound and will generate consistent revenue and steady growth for years to come.

Top 10 Dividend Stocks To Buy With Value, Steady Growth And Steady Dividends:

1) BBL – BHP Billiton (PE < 11)

2) BMS-Bemis Co Inc (PE <12)

3) COP – I know Phillips (PE < 8)

4) DD – EI of Pont de Nemours and Co. (EP < 10)

5) RME – Emerson Electric Co (PE < 12)

6) MT – ArcelorMittal (PE < 6)

7) NSC – Norfolk South Corporation (PE < 11)

8) PEG – Public Service Ent Group (PE < 13)

9) UL-Unilever (PE <13)

10) UTX – United Technologies Corp (PE < 12)

All of the companies on this list have strong fundamentals and most have high dividend yields of 3% or more. In addition, its projected value in 1 year has a minimum increase of 20%. Study these companies and their balance sheets and learn how to find these types of investments on your own.

The bottom line is that an investor will do very well investing in high-dividend stocks both now and in the future. Keep looking for more of our posts on some good stocks to buy in Brazil, China and other countries.

And of course, good luck growing your retirement account in the future.