I have been researching stocks that would be great for dividend income. This would play into my eventual to be able to live off the dividends the stocks would provide, while still enjoying equity growth. Imagine, if you will, being in a position to be able to get $100,000 a year on income from the stocks in you portfolio.
If you want to do that today, you would need a $4,000,000 paying a 2.5% yield at the time of purchase. A more attainable option would be to build up a portfolio of stocks that not only pay dividends, but increase them on a yearly basis. If you were to reinvest the dividends back into the stocks, that 2.5% average yield could be more than 15% on your initial investment 20 years from now.
For example, in 1990 McDonald's paid a 3.49% yield. On that same initial investment, you would get a 25.6% yield today. In terms of dollars, in 1990 you would have received a $8.75 for every $1000 invest back then. Today, you would get $64 every quarter. That is just amazing and does not take in to fact that you would have more than the initial shares you purchased with that initial $1000. If those dividends were reinvested, then you would see over $300 per quarter.
With that in mind, I ran into a great list of dividend stocks for over at Dividend Growth Investor. Over there you will find great dividend growers such as Altria, McDonald's, Clorox and Con Ed.