Dividend Investing is Kid's Play - MCD, K, KO, TWC, MAT

By selecting quality dividend payers with a long-term time horizon, saving for your child is with reach.

As a parent, one of your biggest concerns is saving to give your child a sound financial start in life. This may take the form of a new car, a quality education or some capital to start their own business.
 
However the brutal annihilation of stocks in 2008 and 2009 has discouraged many investors from considering the stock market as a place to deliver long-term returns. This is unfortunate when one considers that by identifying a handful of good quality stocks, with solid dividend yields, you can go a long way toward securing your child’s future.
 
With that in mind, investors might want to consider a stock portfolio with which their children can easily associate. Below is an example of stocks which could make up a very simple portfolio, followed by their historic dividend yield:
 
McDonald's Corporation (MCD) - 2.9%
Kellogg Co (K) - 3%
The Coca-Cola Company (KO) - 2.9%
Mattel Inc – (MAT) 3.5%
Time Warner Cable (TWC) - 2.6%
 
Every child recognizes the McDonalds (MCD) and Coca-Cola (KO) logos, there is an above average chance that the Kellogg Company (K) produces their breakfast cereal and they derive entertainment from either Mattel (MAT) toys or the programming or internet provided by Time Warner (TWC).
 
Below we've built in the performance of these companies taking the capital gain or loss and included the historic average dividend yield over a 5-year period.
 
McDonalds Corporation (MCD) - 141%
Kellogg Co (K) - 27.2%
The Coca-Cola Company (KO) - 50%
Mattel Inc (MAT) - 60.79%
Time Warner Cable (TWC) – negative 2.3%
 
This exercise highlights how an investor can scan a handful of blue chip companies for high dividend yielding stocks and attach them to highly recognizable brands that apply to your children’s every day lives. By doing this and making an investment in this themed portfolio, you would be well on your way to making a real saving for your child’s financial future.
 
One needs to bear in mind that through a financial crisis which was dubbed to potentially be on a par with the Great Depression, there was a single negative stock in that portfolio, and most of its capital losses were eliminated by a dependable dividend yield.
 
Saving for your child’s future by investing in quality dividend stocks is something which is within the reach of every investor.

Your code to embed this article on your website* :

*You are allowed to change only styles on the code of this iframe.

Comments

Add your Comment