The well known “80/20 rule” perhaps understates the degree to which a few high-profile stocks dominate the financial headlines. Tech stocks in particular account for a huge percentage of the on-air stock analysis and discussion.
The investable universe, of course, extends far beyond Apple (AAPL) and Google (GOOGL). There are numerous companies with products and services that won’t attract a rabid fan following or the attention of the financial media. But “boring” products often make for great dividend stocks.
The following chart shows the performance for paint manufacturer Sherwin-Williams (SHW), grocery store Kroger (KR), cereal company General Mills (GIS), toy maker Hasbro (HAS), and cleaning products company Clorox (CLX) compared to the Nasdaq Composite Index.
The stocks included in the chart above are, of course, cherry-picked for inclusion due to their impressive performance. There are companies such as Revlon (REV) whose stock has lost most of its value over the same period.
Picking the winners and overlooking the losers is incredibly hard (and downright impossible to do with any consistency). But those who have success avoid the natural human tendency to focus on the companies generating the most buzz and grabbing the most headlines.
The best dividend stocks for a long-term portfolio often sell products that generate almost no excitement among consumers purchasing them.
This article, The Surprising Truth About the Best Dividend Paying Stocks, first appeared on Dividend Reference.