Building a Winning Dividend Portfolio: What to Look For

When it comes to building a winning dividend portfolio, you want to put together something that is likely to last for the long term. This is especially true if you plan to build an income portfolio that will help you accomplish your goals later on. Here are some things to consider as you put together a winning dividend portfolio:

Companies with consistent growth

Choose dividend paying companies with consistent growth. This doesn’t mean that it has to be explosive, huge short-term growth. All you need is consistent growth. A company that grows its earnings regularly, and has future prospects can be solid a bet, both as a dividend stock, and as a company that will see an increase in stock price over time. Also, consider companies that generate cash on their own. These are companies more likely to be able to share some of the profits with investors through dividends.


Consider the costs the company has. How does it contain them? Look at profit margins and consider companies that consistently show that it can control costs, and make wise spending decisions that benefit the company. Also, pay attention to debt. While a certain amount debt is to be expected in any business, you want to make sure that the level of debt is relatively low and manageable.

Long term performance

How long has the stock been performing well? Look at the long term staying power of the stock. It can also help to look at how much volatility the stock has experienced. You might see some dips and rises, but a solid, long term stock sees its performance smooth out over time. Don’t choose something that rockets higher in the short term, but is likely to drop dramatically as well; instead, look at long term performance.

Dividend increases


Along with solid long term performance, a record of regular dividend increases can be desirable. Does the dividend increase have to be huge each year to matter? No. Any consistent policy of dividend increases says a lot about a company’s management and its fundamentals.

When looking at your options for addition to your dividend portfolio, it’s a good idea to consider your goals. If you are planning to grow your dividend portfolio long term, and prepare it to provide you with regular income to meet your needs, the important thing is to look for companies with staying power, regular growth, and good management. The stocks in your dividend portfolio don’t need to be glamorous, and they don’t need to make a big splash. In the case of a solid portfolio built to withstand the test of time, sometimes slow and steady can win the race.