Building wealth over time is the goal of every long-term investor. One way to continue to build wealth without having to put upfront capital down is to use dividend stocks to your advantage. The key is to use payouts to reinvest and incrementally build wealth. Companies also offer dividend reinvestment plans, which make this method of reinvesting even more attractive.
Two stocks that fit into this category and will allow you to reinvest with quarterly payout are:
1. 3M (MMM)
3M has offered incremental increases to their dividend payout for 58 years in a row and offers a 2.5% dividend. Earlier in the year, the company boosted its dividend by 8%, too. The company’s diverse portfolio of goods pads the company from losses during economic downturns, and exposure to consumer products and healthcare allows for steady growth.
The company also deals with automotive products and renewable energy.
What’s really impressive is 3M’s dividend reinvestment plan allows you to purchase stocks with no service charge or brokerage fees included. You can send the company money directly to buy more stock – something many companies don’t offer.
The company is slated to release their Q2 earnings on July 26, 2016.
2. Johnson & Johnson (JNJ)
Johnson & Johnson has a wide range of products, from Tylenol to Band-Aids. The company’s historical data shows 54-years of dividend increases with a yield of 2.6% as of July 2016. The company’s immense growth has allowed Johnson & Johnson to be a favorite pick amongst investors.
The company is also working on Imbruvica and Invokana, a blood-cancer and diabetes drug respectively.
Johnson & Johnson had a dividend reinvestment plan, too, which a shareholder can use all or some of their dividend to buy additional shares without fees or commissions. The company is slated to release their Q2 earnings on Tuesday, with EPS forecasts of $1.68 and revenue of $17.98 billion.
