This is a guest contribution from Josh Wilson, a Millennial who’s working to grow his portfolio, save for the future, and become a thought leader in the personal finance space through the site Family Faith Finance.
As the stock market continues its relentless climb to record highs, investors grow increasingly wary of its next big move, which, based on typical market cycles, is likely to be down. So, what’s a conservative investor to do?
Equities are a vital part of any long-term investment strategy that seeks to outperform inflation and grow assets for future financial security.The answer lies in high quality dividend stocks. Companies that consistently pay dividends over a long period of time are considered to be more stable, offering investors the benefit of a current return regardless of the direction of its stock.
Generally dividend-paying stocks have performed better than the broad market and the dividends they pay have provided nearly 50% of the total stock market return over the last two decades. Some of the best dividend-paying stocks are in the financial sector and have a history of increasing their dividends, which increases portfolio stability.
Discover Financial Services
Discover Financial Services (DFS) is the holding company for well-known brands, such as Discover Card, Diners Club, Pulse network. It is the third-largest issuer of credit cards and one of the largest private student loan lenders. Discover is also a major player in online banking services. Its total revenue for 2016 was $10.5 billion and its net income was $2.33 billion. As of July 30, 2017, its stock price is trading at $60.67 a share, which is down from its historic high of $72 from Dec 2017.  Many stock analysts view this as a terrific buying opportunity for a great dividend-paying stock.
In June, Discover announced a dividend increase to $1.40 a share, a 16.7% increase from its prior dividend of $1.20. That is the eighth dividend increase since the company went public in 2007. During the financial crisis it lowered its dividend slightly in 2009 and 2010, but, unlike some dividend-paying companies, Discover continued to pay dividends during difficult times.
