Is Now the Time to Buy Dividend-Paying Stocks? (ft. BBAE’s James Early)

Jun 8, 2023

Ask episode

Chapters

Transcript

Episode notes

Investors love dividends. There's something special about receiving cold hard cash into your brokerage account every quarter, which you can use to pay for expenses or reinvest and buy more stock. Over time, reinvesting dividends can compound your returns.

But how do dividend-paying stocks compare against other segments of the market? Have they been impacted by the tricky macro of the past year? Are dividends more attractive in rising-rate environments? And what factors should investors consider before buying dividend stocks?

To answer those questions, we've brought in an expert. James Early is the Chief Investment Officer of BBAE, and formerly the Advisor of Motley Fool's Income Investor. 7investing CEO Simon Erickson recently spoke with James about dividends and dividend-paying stocks.

In the first part of the conversation, James describes what got him into dividend investing and the "3M" factors -- "management, moat, and money situation management" -- that investors should look for. He describes how dividends are a good way to keep management teams responsible in their capital allocation decisions. He also describes how dividend-paying stocks perform through different market environments.

Simon then asks James to describe the tradeoff between dividend yield and dividend growth. Is it more advantages for investors to look for higher yields upfront? Or should we patiently wait for dividends to grow over time?

In the final segment, James describes two of his favorite dividend-paying companies: Diageo (NYSE: DEO) and Unilever (NYSE: UL).

Publicly-traded companies mentioned in this podcast include Diageo, and Unilever. 7investing's advisors and/or its guests may have positions in the companies that are mentioned.

Don't miss out on future conversations like this! 7investing will be publishing upcoming interviews with the CEOs of PubMatic, Rocket Lab, and more. Join 7investing's free email list to get our podcasts and investing insights delivered directly to your Inbox.