Dividend stocks are not just a way to generate superior, risk-adjusted returns, they are also a way to nurture future generations. After all, one of the greatest gifts you can give your children is financial security. Dividend stocks with solid yields that have been making payouts forever might not be the most attractive part of a portfolio, but they are sure to be the most secure — and long-lived.
Dividends are those cash distributions that many companies pay out regularly to shareholders from earnings. It sends a clear message about the future prospects and performance of the company. A company’s willingness and ability to pay steady dividend over time, and its power to increase them, provide a good clue about its fundamentals.
Typically, mature, profitable companies pay dividends. However, companies that do not pay dividends are not necessarily without profits. If a company thinks that its own growth opportunities are better than investment opportunities available to shareholders elsewhere, the company should keep the profits and reinvest them into the business. For these reasons, few growth companies pay dividends. But even mature companies, while much of their profits may be distributed as dividends, still need to retain enough cash to fund business activity and handle contingencies.
When it comes to dividend stocks that you will pass down to your kids, you need a history of uninterrupted and rising payouts. Nothing clobbers a dividend stock like a dividend cut or suspension when times get tough.
The other thing you will most certainly want in dividend stocks to give to your kids one day is a high probability that the company paying the dividend won’t go bust or bankrupt. No one knows what the future holds, but if a company has paid dividends for close to a decade or more, chances are it won’t disappear in your own or your children’s (or even grandchildren’s) lifetimes.
Based on that and other factors, here are 10 dividend stocks you will pass down to your kids one day:
Nestle Nigeria Plc: the company manufactures, markets, and distributes food products in Nigeria.
Total Nigeria Plc: involves the finding, extracting, producing and exporting petroleum and gas. It is also engaged with the blending of lubricants and the sales of petroleum products.
Nigerian Breweries Plc: It is a pioneer and largest brewing Company in Nigeria.
FBN Holdings Plc: This is the oldest financial institution in Nigeria as well as the undisputed leader in the banking equities on the Stock Exchange.
Mobil Nigeria Plc: engages in the sale and marketing of petroleum products in Nigeria.
Dangote Cement Plc: It is Nigeria’s largest cement producer with a production capacity of 40.25 million tonnes in Nigeria.
UACN Plc: A leading food-focused company with diversified operations in Real Estate, manufacturing of Automobile, services, foods and beverages, logistics, Paints, Animal feeds and warehousing. It is regarded as regarded as the “Nigerian Chaebol” as a result of their operations and activities.
Flour Mills Plc: It is primarily engaged in flour milling; production of pasta, noodles and edible oil; livestock feeds; farming and other agro-allied activities;
Guinness Nigeria Plc: The Company has a strong portfolio of alcoholic and non-alcoholic beverages.
Guaranty Trust Bank Plc: Its principal activity remains the provision of commercial banking services to its customers.