Streetwise for Sunday Oct 19, 2008

Streetwise

Lauren Rudd

Sunday, October 19, 2008

Single Best Investment Guide

“When this old world starts a getting me down...,” (James Taylor, 1998).

I cannot testify as to the world, but for many of you Wall Street is getting you down. Do not despair, I have an answer you might find extremely useful in today’s volatile investment climate.

However, let me preface what follows with the following mantra...stocks are and always have been the best investment for increasing your wealth. The only difficulty is determining what to buy and when. The last point is easy, anytime and especially now when they are on sale.

So which companies do you invest in? Suppose you had a list of 319 solid high quality dividend paying companies that have withstood the test of time...would that help? Although I have not discussed Mergent’s Dividend Achievers publication in over three years, it is still, in my opinion, the single most useful tool for individual investors.

Dividend Achievers is published quarterly by John Wiley & Sons and profiles 319 companies that have increased their regular annual cash dividend for a minimum of 10 consecutive years. However, the Dividend Achievers list itself is only updated once a year. To put things in perspective, only about three percent of all listed, dividend paying companies make the Dividend Achievers list.

Mergent is not content to simply list the stellar dividend performers. Rather it takes the list and proceeds to slice and dice it in a variety of ways. For example, it ranks the entire list by total return based on 1, 3 and 5 year ending May 30, in the summer 2008 edition. Then it lists the top 20 companies in 12 different categories such as total assets, return on assets, return on equity and dividend yield. You will also find the website addresses for the companies listed.

Yet, the various lists comprise only 36 pages of a book that is 355 pages in length. The remaining pages are devoted to a detailed description of each company, 6 years of annual financial data along with the most current quarterly data and a chart of stock prices covering a 10-year period. There is one page per company.

No, I do not have a financial tie-in with the book or with Mergent. However, as a matter of complete disclosure, in the past I have received such items as a coffee mug, tee shirt and chocolate business cards that came with my complimentary publisher’s review copy.

In a more serious vein, I have been using and writing about the Dividend Achievers publication for over seventeen years and I believe it to be one of the few true bargains in the arena of independent investment research. If you took away my access to the Internet, my telephone and only allowed me the use of one printed book for selecting companies in which to invest, this book would be my choice.

For example, if you are interested in knowing which company has the longest record for increasing its dividend every year as of Dec. 31, 2007, it is a three way tie. American States Water, Diebold and Procter & Gamble have been increasing their dividends for 54 consecutive years. And you say you cannot figure out what to invest in.

So what do I not like about the book? Mergent has become very commercial with what used to be a relatively inexpensive investment tool. Four issues per year is probably overkill for many investors. In addition, they have licensed the Dividend Achievers name to several mutual funds. The beauty of the book is that you do not need assistance, or a mutual fund, to benefit from what Mergent has put together.

Wiley is selling the book both as a one year subscription for $199 or as a single copy for $50 plus shipping. If you would like to obtain a single copy or a subscription, contact Wiley at 1-888-378-2537. You might want also want to mention how you learned about the book.