Looking for investment income? Focusing on yield alone means you’ll miss out on lots of quality companies that pay a smaller dividend, but are still growing and could increase the payout in the future. Looking for companies that check both boxes — dividend payment and growth — can create a powerful compound growth effect over the long term.
Three companies our Fool.com contributors think meet these criteria are Applied Materials (NASDAQ:AMAT), Dolby Laboratories (NYSE:DLB), and Broadcom (NASDAQ:AVGO).
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Don’t pick just one tech theme when you can have many
Nicholas Rossolillo (Applied Materials): As 2020 has unfolded, I keep coming back to Applied Materials, and I see no reason not to again. The company makes equipment for semiconductor and other tech hardware manufacturing, and its engineering research lies at the heart of many important advancements in technology. Whether it’s high-end computing chips for things
Developing economies remain a compelling avenue for income ideas and one of the more practical ideas for tapping that income stream is the ALPS Emerging Sector Dogs ETF (NYSEArca: EDOG).
EDOG, which debuted over six years ago, tracks the performance of the S-Network Emerging Sector Dividend Dogs Index. The index is comprised of the highest paying stocks, or “Dividend Dogs,” from the S-Network Emerging Markets Index, which holds large-cap, emerging market stocks. The Dividend Dogs include the five stocks in each of the ten Global Industry Classification Standard sectors that make up the S-Network Emerging Markets.
“Emerging markets aren’t among the first places investors typically think of when scanning for dividend stocks, but they can offer reliable and growing payers,” reports Lawrence Strauss for Barron’s. “It’s important to tread carefully, however, given risks such as currency fluctuations and less rigorous corporate governance in certain cases.”