When I first started investing, I was never really was interested in dividend stocks.  I wanted appreciation.  I wanted to find the next Google (GOOG), Apple (APPL), Microsoft (MSFT), that next stock that will leap 1000% in appreciation retuns.  The further I have gone into stock investing the more I understood that its rare to find these good stocks.  I also know for retirement accounts which do not get hit with capital gain taxes when you sell that they are perfect for dividend stocks.

If I have a choice to a brokerage account or retirement account, you always want to invest the dividend stocks into the retirement account.  You get the interest without any of the taxes involved.  If I had bought the dividend stock in my normal after-tax brokerage account, I would have to pay taxes on the interest.  Therefore, I rather load up my retirement accounts with dividend stocks that will pay for the long-term.  This means I am looking for dividend stocks that have continued to raise their dividend year-after-year and they have a long-term track record of stock rising.  It doesn’t matter that it appreciates only a little at a time because I am getting the nice dividends.

In the past year, I have advocated oil stocks like Chevron (CVX).  It pays a nice dividend but it also has appreciated rapidly since my recommendations.  The price makes it more tough to recommend such a stock since that means the dividend percentage is lower when you purchase at the price currently at $113 which gives it a 3.87% dividend.  This isn’t bad but I also think the price is a little high.

I rather look at stocks that are weak now and undervalued.  With the Fed planning to meet in the middle of December, there is a high chance that they will raise interest rates.  This means strong dividend stocks will most likely get sold off.  I am setting my radar on Omega Healthcare Investors (OHI) which pays over 8% dividend.  I am also looking at New Senior Investment Group (SNR) which pays over 10% dividend.  I have discussed them in the past article and I think they will be nice long-term holds that will continue to pay the dividend and hopefully raise it long term.