When you use a buy and hold investing strategy for long-term dividend income, you still need to keep up with each stock in your portfolio. Buy and hold doesn't mean buy and "hope they go up".
With a lot of the information about any company available on the internet or through an online broker, it is easy to stay up-to-date on your stocks. It may take only an hour a week per stock to do the necessary homework.
Knowing what a company is up to makes you an informed shareholder and clues you up on when some new development may have good or bad consequences for the company's share price.
One simple stock picking trick is to choose companies that have excellent dividend payment histories. Here are three companies that have done just that over the past 5 – 10 years. They could be that layer of safe dividend income your portfolio needs.
IOOF Holdings Limited (ASX: IFL) provides financial products and portfolio administration services like superannuation, annuities and investment trusts, as well as offering financial planning and stock broking. Super and SMSF demand is very high as more people save and prepare for retirement. It has a 5.1% fully franked dividend yield and has a good track record for increasing dividends. High yield stocks are attractive to super funds that are looking for steady future income. That's why IOOF Holdings is doubly good for a retirement portfolio.
AP Eagers Limited (ASX: APE) operates a network of auto dealerships across Australia and runs Brisbane Motor Auctions. Revenue over the past five years has been on the rise and dividends have also, about a compound 20% on average annually. FY 2013 was its best year for earnings and dividends. It offers a 4.0% yield fully franked.
Woolworths Limited (ASX: WOW) has consistently raised dividends every year over the past ten years. The retailing giant is still growing and now wants to enter financial services, an industry big enough to potentially drive revenues for such a big company. People will be shopping at Woolies for many years to come, so the dividends should still keep coming as well. This stock could be a foundation of a long-term dividend portfolio. It has a 3.8% fully franked yield.
