By Brett Owens
You can double your money in perfectly safe, well-known dividend stocks . But only if you know the secret! Novice income investors gravitate toward higher current yields, but often that can result in hitching your sleigh to stagnant stocks with equally stagnant dividends.
For monster total returns, we want to pay attention to dividend increases. Because these hikes donaEURtmt just bump up the yield on your initial investment aEUR" they also trigger stock-price increases, too. If a stock is already paying out 3% but then juices its payout by 10%, investors will see that new 3.3% yield and buy more shares. That buying will drive the stockaEURtms price up, and the yield back down, eventually toward 3%.
Just consider Visa ( V ) , which almost always sports a current yield of less than 1%. Is it a dividend laggard? Hardly. As of NovemberaEURtms 19% jolt to the payout, Visa stock now pays 150% more than what it did in early 2014 aEUR