Streetwise for Friday, November 3, 2017

My mailbox has been inundated with a variety of media commentary and investment letters, all of which are profess the same theme, that Wall street is headed for a major correction in the order of 50 percent. (Note: In 2008 the S&P was down 38 percent.)

I must take umbrage to such callous statements, many of which seem to lack both data and academic credentials, relying instead on a seemingly mystical crystal ball. What is unfortunate is that unfettered words of that nature have the potential to become a self-fulfilling prophecy.

As both an economist and Wall Street analyst, I am concerned over the continued decimation of investor confidence brought about by the resultant rising fear of the markets. However, I have an answer you might find extremely useful in today’s capricious investment climate.

Numerous academic studies have shown unequivocally that equities have an unblemished record as being the best investment vehicle for increasing your wealth. The key questions of course are what to buy and when. The last point is easy, anytime. Therefore, the only remaining issue is which companies do you invest in?

Suppose for a moment you had a list of about 271 solid, high quality, dividend paying companies that have withstood the test of time, would that help?

Such help is available by means of the Mergent Handbook of Dividend Achievers and it remains, in my opinion, the single most useful tool for individual investors.

I was once asked the question that if you removed my computer, access to the Internet, and only allowed me the use of one item with which to select investment candidates, what would it be? The Dividend Achievers Handbook would be it. In fact, at one time I was quoted on the back cover making just that statement.

No, I do not have, and never have had, any financial ties to Mergent, although as a matter of complete disclosure they do offer my students a student discount.

The book profiles those companies that have increased their regular annual cash dividend for a minimum of 10 consecutive years. Less than 10 percent of all listed dividend paying companies make the Dividend Achievers list. If a company misses a year, it is off the list and must again increase dividends for 10 consecutive years to be added back on.

Mergent is not content to simply list the stellar dividend performers. Rather it takes the list and proceeds to slice and dice it in a variety of ways. For example, it lists the top 20 companies in 12 different categories, such as total assets, return on assets, return on equity and dividend yield.

Yet, the various lists comprise only about 50 pages of the book. The remaining pages are devoted to a detailed description of each company, including 5 years of annual financial data.

I have been using and writing about the Handbook for over 25 years and I believe it to be one of the few remaining bargains in the arena of independent investment research. Moreover, you do not need any form of assistance to benefit from what Mergent has put together. Some of the companies discussed in this column were initially brought to my attention via the Handbook.

If you are interested in knowing which company has the longest record for increasing its dividend every year, it is a two-way tie. American States Water and Procter & Gamble have been increasing their dividends for 63 consecutive years. And you say you cannot figure out what to invest in.

What do I not like about the book? First, Mergent has become quite commercial with what used to be a relatively inexpensive investment tool. While not prohibitive, the $80 price is also not what I would call inexpensive.

The other point is relatively minor but annoying. The print is rather small. This is a result of having to incorporate as much data as possible in a relative small space. Personally, being a bit long in tooth I keep a magnifying glass nearby, just in case.

If you would like to obtain a single copy or a subscription, contact Mergent at 1-800-342-5647. It cannot hurt to mention I sent you and maybe they will offer you a discount.

Lauren Rudd is a financial writer and columnist. You can write to him at Phone calls accepted between 9 AM and 3 PM at (941) 706-3449. For back columns please go to