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Today’s episode - “Stable”

Good day! ✋ 

Double Your Money in 5 Years? It's possible. Forget lackluster returns. We've identified 10 dividend stocks with the power to supercharge your portfolio. Inside, we break down the numbers and reveal how these stocks crushed the S&P 500 by over 100%.

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To begin, let's check in on the financial markets.👇️ 

Before we start, please remember that I am not a financial advisor, so always do your research before investing.

Let’s go!

Dividing stocks can be a powerful tool if you aim to grow your investment and enjoy a reliable income. In this detailed exploration, we dive into the top 10 dividend stocks that have the potential to double your investment within the next five years. Using a thorough analysis, we compare these stocks against the S&P 500 to highlight their exceptional performance.

Performance Overview

To illustrate the potential of these dividend stocks, we modeled a $10,000 investment in each of these top 10 dividend stocks and compared it to an equivalent $10,000 investment in the S&P 500 over the past five years.

Results:

• Top 10 Dividend Stocks: $46,000

• S&P 500: $22,000

This comparison reveals that the top 10 dividend stocks have outperformed the S&P 500 by 102%. An investment of $10,000 in these dividend stocks would have grown to $46,000, whereas the amount invested in the S&P 500 would have only reached $22,000. This demonstrates that dividend stocks offer higher returns and provide more stability and lower volatility compared to the broader market.

Why Dividend Stocks?

Dividend stocks provide several advantages that can lead to superior long-term growth:

• Consistent Income: Dividend payments offer a steady stream of income, which can be reinvested to compound returns.

• Reduced Volatility: Dividend-paying stocks tend to be less volatile than non-dividend-paying stocks, which helps manage risk, especially during market downturns.

• Total Return: Capital appreciation and dividend income can lead to higher returns over time.

While past performance doesn’t guarantee future results, it provides a solid baseline for evaluating potential investment opportunities.

Top 10 Dividend Stocks

Here’s a deep dive into each of the top 10 dividend stocks:

1. LAM Research (LRCX)

• Sector: Semiconductor Equipment

• Dividend Yield: 0.74%

• Performance:

  • 1-Year Growth: 73%

  • 3-Year CAGR: 20%

  • 5-Year CAGR: 43%

• Highlights:

  • Industry Leader: LAM Research is a major supplier of wafer fabrication equipment used in semiconductor manufacturing. Their equipment is critical for processes such as deposition, etching, and cleaning of integrated circuits.

2. Novo Nordisk (NVO)

• Sector: Healthcare

• Dividend Yield: 0.68%

• Performance:

  • 1-Year Growth: High due to demand for GLP-1 drugs.

  • 3-Year CAGR: Strong growth driven by obesity and diabetes treatments.

  • 5-Year CAGR: Consistently high returns.

• Highlights:

  • Innovative Treatments: Novo Nordisk is renowned for its diabetes and obesity treatments, including the popular GLP-1 drugs like Wegovy and Ozempic. Their expansion into new manufacturing facilities highlights the strong demand for their products.

3. General Dynamics (GD)

• Sector: Aerospace and Defense

• Dividend Yield: 1.8%

• Performance:

  • 1-Year Growth: Strong returns from defense spending.

  • 3-Year CAGR: Consistent growth across its diverse segments.

  • 5-Year CAGR: Reliable long-term performance.

• Highlights:

  • Diverse Operations: General Dynamics operates in aerospace, combat systems, marine systems, and technology. Their products range from business jets to military combat vehicles and nuclear submarines.

4. Broadcom (AVGO)

• Sector: Semiconductors and Software

• Dividend Yield: 1.14%

• Performance:

  • 1-Year Growth: Over 100%, reflecting strong demand for semiconductor solutions.

  • 3-Year CAGR: Exceptional growth.

  • 5-Year CAGR: Remarkable performance with significant capital appreciation.

• Highlights:

  • Diverse Product Range: Broadcom designs and supplies a wide range of semiconductor products and infrastructure software. Their acquisitions, including Symantec Security, expand their cybersecurity capabilities.

5. Walmart (WMT)

• Sector: Retail

• Dividend Yield: 1.18%

• Performance:

  • 1-Year Growth: Strong performance driven by increased consumer spending.

  • 3-Year CAGR: Consistent growth amidst economic fluctuations.

  • 5-Year CAGR: Reliable returns.

• Highlights:

  • Low Prices: Walmart’s strategy of offering the lowest prices makes it a go-to retailer, especially during inflationary periods and economic downturns.

6. Microsoft (MSFT)

• Sector: Technology

• Dividend Yield: 0.66%

• Performance:

  • 1-Year Growth: Significant gains from AI and cloud services.

  • 3-Year CAGR: Robust growth is driven by Azure and other innovations.

  • 5-Year CAGR: High returns reflecting the company's strong position in technology.

• Highlights:

  • AI Integration: Microsoft’s investment in AI, particularly through its Copilot initiative, is expected to add $10 billion annually over the next two years.

7. Taiwan Semiconductor (TSMC)

• Sector: Semiconductors

• Dividend Yield: 0.85%

• Performance:

  • 1-Year Growth: Strong performance due to high market share.

  • 3-Year CAGR: Impressive returns driven by global expansion.

  • 5-Year CAGR: Consistent growth.

• Highlights:

  • Market Leader: TSMC is the largest semiconductor manufacturer globally, with over 59% market share and high margins.

8. Phillips 66 (PSX)

• Sector: Energy

• Dividend Yield: 3.16%

• Performance:

  • 1-Year Growth: Strong performance in the energy sector.

  • 3-Year CAGR: Solid returns with a focus on diversification.

  • 5-Year CAGR: Strong performance with a focus on renewable energy.

• Highlights:

  • Diverse Operations: Phillips 66 operates in refining, chemicals, and energy logistics. To future-proof its business, it is also investing in renewable energy.

9. Qualcomm (QCOM)

• Sector: Semiconductors and Telecommunications

• Dividend Yield: 1.43%

• Performance:

  • 1-Year Growth: Over 94%, driven by strong demand for Snapdragon processors and 5G technology.

  • 3-Year CAGR: High returns from innovation in mobile and IoT technologies.

  • 5-Year CAGR: Consistent strong performance.

• Highlights:

  • Key Technology Player: Qualcomm’s Snapdragon processors and 5G modems are crucial in the mobile and IoT sectors. Their technology is embedded in a wide range of devices.

10. AbbVie (ABBV)

• Sector: Biopharmaceuticals

• Dividend Yield: 3.54%

• Performance:

  • 1-Year Growth: Notable gains driven by strong sales of immunology and oncology products.

  • 3-Year CAGR: Solid growth with strong dividend payments.

  • 5-Year CAGR: High returns reflecting AbbVie’s focus on high-growth areas.

• Highlights:

  • Innovative Pipeline: AbbVie’s focus on immunology and oncology has resulted in strong sales and robust pipeline drugs. Their acquisition of Allergan adds significant value.

The top 10 dividend stocks listed here offer high returns, consistent dividends, and stability. Their performance over the past five years highlights their potential to double investments within the next five years. While past performance provides a useful benchmark, it's important to conduct your research and consider your investment goals.

Having said that, are you ready to replicate our trades from carefully selected stocks? Check out the newly formed IWA Portfolio! ⬇️ 

IWA PORTFOLIO

Our IWA portfolios consist of trades from our stock basket. We believe in long-term investments and have curated a selection of carefully chosen stocks to create a well-balanced, safe, and profitable stock portfolio. You can access our daily trades from the three portfolios we manage.

• IWA Quality Growth Stocks Portfolio

• IWA Quality ETF Portfolio

• IWA High Dividend Portfolio

The easy way to begin or enhance your investment journey is to learn from what works for others. This section is for you if you want inspiration from an existing investment portfolio.

The IWA Portfolio is only available to Premium Subscribers.

IWA Quality Growth Stocks Portfolio

One of my oldest investment portfolios was started during the pandemic. It's where I began paying attention to finding reliable stocks that could generate annual profits. As of August 6, 2024, we added Nvidia ($NVDIA) to our holdings. We couldn't resist shopping, and in fact, we funded multiple trading accounts across the globe. Some might call it panic buying of our target instruments.

Return YTD 11.95% ➡️ 14.67% 

Return 2Y 69.36% ➡️ 73.47% 

Profitable Weeks 53.70% 

IWA Quality ETF Portfolio

It’s one of the newest portfolios, having just celebrated its first anniversary. We are pleased with its progress, as it's safe, reliable, and stable.

After a strong recovery the day before, Wall Street calmed down on Friday. The overall mood was slightly positive, with traders taking precautionary measures before the weekend. The US threatened Iran with a counterattack, impacting market sentiment. The Dow Jones rose by 0.1 percent to 39,497 points, while the S&P 500 and Nasdaq rose by 0.5 percent. Yields fell on the bond market after two days of increases. The expectation of a small interest rate cut of 25 and a large one of 50 basis points by the US Federal Reserve in September is balanced.

Return YTD 12.6%  ➡️ 12.81%

Return 2Y 42.44% ➡️ 45.74%

Profitable Weeks 59.26%

IWA High Dividend Portfolio

I am immensely proud of my holdings, which have grown from a small investment into a strong portfolio of 40 reliable stocks spanning stable industries, focusing on quality dividend growth.

Return YTD 7.52%  ➡️ 8.89%

Return 2Y 11.44% ➡️ 12.86%

Profitable Weeks 55.56% 

Portfolio Indicated Dividend Yield 2.67%

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The Investing Wise Academy Team

Disclaimer: This newsletter is for informational purposes only and should not be considered financial advice. Please consult with a financial advisor before making any investment decisions.

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