Dividend growth stocks

Working to summarize the blog on this topic from http://seekingalpha.com/article/193345/comments?v=1268663941&source=tracking

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I'm a swing trader, so I do not pay much attention on dividends. However, I feel there is a place in our portfolio and do not have to sell them (just pass them to our heirs). Here are some random thoughts.

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From my own research via over 250 searches (one search is one screen) and over many simulations (one simulation running all 250 searches for a period), dividend-growth stocks are never in the top-performing 10% in all phases of the market cycle. Yes, dividend-growth stocks should indicate a company is successful, but also indicates the company does not know how to re-invest the money (debatable). One man's research.

Total Return = Stock Appreciation + Dividend - Taxes

The simulations may miss the dividend part, so I need to add about 2% for the return for these stocks.

Taxes are more complicated as long-term and short-term appreciations and dividends could be different. Your state residence and your tax bracket make a difference too. The winning stocks will have the cost basis step down to the day you die, so most likely it is a tax advantage.

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Diversify as most bank stocks belong to this group before the crash.

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Hints from another investor:


So my conclusions/summary so far is:
1) Can't guess the market's direction.
2) For the average guy like me who can't pick stocks or time market, over the long term Div Growth Stocks are the best place to be.
3) Preferably buy them when their evaluation vs others in sector and their sector vs other sector's evaluations are low (out of favor) and the collary, sell them when both evaluations are high (when they are darlings).
4) Diversify into several div growth stocks, (I'm Canadian but live in Houston and when retire will probably be in Canada with travel in Europe and Asia and thus should diversify out of US into several countries or in global companies).
5) When possible, avoid the big failures like GE & C.
(Any corrections appreciated)

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It is not hard to write a search on the stocks that increase dividend yield every year.