Long Term Dividend Stocks To Buy Right Now

| January 30, 2015 | 0 Comments

The best long-term dividend stocks are the kind of stocks you see in the portfolio of Fayez Sarofim.

Who’s Fayez Sarofim?

Most days you’ll find him smoking a cigar in his 29th floor office in downtown Houston. The El Greco painting on the wall… it’s an original.

Fayez owns a chunk of the Texans, Houston’s NFL team. You’d be lucky to fill up an elevator with all the people in Texas who have more money.

And even though he hasn’t always been lucky in love, 86-year old Fayez knows a thing or two about long-term dividend stocks.

You can’t help but love his dividend investing philosophy.

“People always look for the needle in the haystack. Why not buy the haystack?”

Take a look at his holdings, and you’ll see Fayez has put together a lineup of stocks that are poster children for dividend investing.

Exxon Mobil (XOM), Procter & Gamble (PG), Wal-Mart stores (WMT)…

It’s as if Fayez buys all the S&P 500 Dividend Aristocrats he can.

But when you take a closer look, you’ll discover a few secrets that have cemented his position as one of the world’s savviest investors in long term dividend stocks.

The Secrets Of Picking The Best Long-Term Dividend Stocks

Want to let Fayez do the work for you?

Open an account with his firm. Minimum investment… $5 million.

Not exactly what you had in mind? Let me show you what kind of dividend stocks Fayez has always had a soft spot for.

He has owned Philip Morris since 1963. He buys and holds. His firm’s annual portfolio turnover rate is usually less than 20%.

“Nervous energy is a great destroyer of wealth,” he says.

But there is one investment he’s made that falls outside the walls of the S&P 500 Dividend Aristocrats.

And it’s an energy stock that has bucked the trend. It’s actually had a nice run the past year.

Best long term dividend stock chart Kinder Morgan

Kinder Morgan Inc. (KMI) pays a 4.21% dividend.

But to make the annual dividend payment of $1.76, it’s been robbing Peter to pay Paul. The dividend payout ratio is 141.9%.

Kinder Morgan operates oil and gas pipelines. Over the past year, the stock has bounced around, but it’s up 23%, outperforming the overall market.

So if you’d like to invest in long-term dividend stocks like Fayez Sarofim, look at opportunities like Kinder Morgan.

And if you’d like to mirror his investing style, but you don’t have 5 million sitting around, you’re in luck.

Check out the mutual fund that’s hired Fayez as a “sub advisor”.

The Dreyfus Appreciation Fund

Don’t you love this title? Sub-advisor.

Here’s a guy worth $2.2 billion and the suits at Dreyfus give Fayez a title that makes him sound like a summer intern.

In Houston, they call him “The Sphinx”.

I’d call him a guy who makes smart, patient decisions. He’s clearly smitten with long-term dividend stocks, as we can see with the top five holdings of the Dreyfus Appreciation Fund.

Stock Yield Annual Payout Payout Ratio
Apple Inc. (AAPL) 1.68% $1.88 24.3%
Philip Morris International (PM) 4.84% $4.00 78.9%
Coca-Cola Co. (KO) 2.84% $1.22 59.8%
Exxon Mobil (XOM) 3.00% $2.76 36.8%
Chevron (CVX) 3.96% $4.28 43.1%

The Dreyfus Appreciation Fund gives you a great window into the investment decisions of an investor who knows how to pick winning, long-term dividend stocks.

But should you run out and invest in the fund?

No, and here’s why.

The Problem With Investing In This Fund If You Want Long-Term Dividends

Right off the bat, you’re paying a hefty premium. Your overall return is reduced by almost a full percentage point because of the fees you pay.

Here’s another way of looking at it. If you invest $10,000 in this fund, after five years you’ll have paid more than $500 in fees.

You’re better off bypassing the fund and investing in individual long-term dividend stocks.

Want more ideas on where to look, and how to carve out the winners from the losers?

Read my article, “How to Find The Best Stock For Dividend Income.”

And don’t forget about the 86 year-old Houston billionaire with an El Greco hanging in his office.

Fayez Sarofim is a patient guy. He’s been sitting on his Philip Morris stock, raking in dividends and capital appreciation, since President Kennedy was in the White House.

Not a bad role model for dividend investors… even if he might smoke a few too many cigars.


Apple (AAPL)

Dividend Yield: 1.68%
Annual Payout: $4.84
Payout Ratio: 24.3%
P/E: 17.09

Philip Morris International (PM)

Dividend Yield: 4.84%
Annual Payout: $4.00
Payout Ratio: 78.9%
P/E: 16.74

Coca-Cola Co. (KO)

Dividend Yield: 2.84%
Annual Payout: $1.22
Payout Ratio: 59.8%
P/E: 23.7A

Exxon Mobil (XOM)

Dividend Yield: 3.00%
Annual Payout: $2.76
Payout Ratio: 36.8%
P/E: 11.32

Chevron (CVX)

Dividend Yield: 3.96%
Annual Payout: $4.28
Payout Ratio: 43.1%
P/E: 9.6


Michael Jennings

Note: Michael Jennings writes and edits DividendStocksResearch.com. Sign up for our free dividend reports and dividend newsletter at https://www.dividendstocksresearch.com/free-sign-up. We’ll show you how to create regular income by investing in dividend stocks, easily, step-by-step.

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Category: Dividend Stocks To Buy?

About the Author ()

Michael Jennings writes and edits DividendStocksResearch.com showing how you can profit from dividend stocks. His passion for stocks and especially Dividend Stocks began at an early age. Now he shares his knowledge and wisdom with anyone who asks... He shows beginning investors, retirees, and even trading pros how to create regular income by investing in dividend stocks, easily, step-by-step! You can Sign up for his free Dividend reports and dividend newsletter at http://www.dividendstocksresearch.com/free-sign-up

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