Whenever I talk to a ‘newbie’ about the virtues of investing in dividend paying stocks for the long haul, I always have to give a concrete example of how the power of compounded dividends (no matter how small) will add up to solid wealth over time. Phillip Morris and Pepsi are two classic examples of how top dividend paying stocks can build a solid cash flow over time. Here are some others just to prove this point:
Johnson & Johnson (JNJ) – one of my favorite dividend payers and a great one to buy right now. 100 shares of JNJ 20 years ago would’ve cost about $6,750. By reinvesting those dividends back into the stock, you’d have over 1200 shares today worth over $68,000 (10x your original investment) and paying over $2,500 in dividends a year – almost 40% yield on your original investment.
Nationwide Health Properties (NHP) - A $10,000 investment in Nationwide Health Properties back in 1988, would’ve turned into a whopping $358,554 today AND you’d be getting $11,132 in dividends every year.
Last example is Coca-Cola (KO) which is one of the best dividend paying stocks over its history. The company went public in 1919 at $40 a share. Today, each share is worth over $250,000…without dividends reinvested. With the power of compounding dividends, each one of those KO shares is now worth $8.5 million and is throwing off $243,o00 a year in dividends.
For a good list of stocks to buy today that will turn into examples like this tomorrow…we recommend the Dividend Aristocrats List. And as always…this site is dedicated to bringing the best ideas for top dividend paying stocks that can make you rich over time and that aren’t trafficked in the mainstream…