For the investor who desires both current income and capital appreciation we offer a list of dividend paying stocks.  We have chosen 50 stocks that we believe have a strong likelihood of increasing dividends and share price in the future.

How to use the list:

The list of stocks is updated monthly.  We recommend that investors diversify their funds equally across 10-20 of the top 30 stocks in the list.  Then, on a periodic but infrequent basis (such as once a year), rebalance their portfolio by selling stocks that are no longer on the list and replacing them with issues that are in the top 30.

List Composition:

To create our list we start with the stocks that trade on the NYSE, NASDAQ, and AMEX and then apply following criteria:

• Have a 5 year dividend growth rate greater than zero
• Have a 5 year earnings growth rate greater than zero
• Have a book value greater than zero
• Recent 3 month average daily volume is greater then 200,000 shares
• Last 12 months dividend payout is less than 50% projected earnings

We then take the 50 stocks with the highest dividend yield.

Philosophy:

Companies that have high dividend yields tend to resist downturns.  The dividend helps support the stock price so that, during downturns, these companies' stocks will drop less than the overall market.

The additional criteria that we have applied are designed to find those stocks that will be in the best position to increase their dividends in coming years.  An increasing dividend should lend additional support to the under lying share price; maximizing the potential for capital appreciation going forward.

Fluctuating stock prices cause the dividend yield to vary, if a stock's price rises sufficiently, the corresponding yields falls enough to remove the stock from the list.  Selling the stock and replacing it with a stock that is on the list results in an increase in dividend income.  Other times, stocks that are not on the list experience price declines that increase their yields sufficiently to place them onto the list.  By occassionally rebalancing their portfolio, investors practice a buy low, sell high investment style.