In 2009 the best-performing stocks were the worst capitalized, the closest to the brink of bankruptcy, the most highly leveraged–in short, the trash. It’s likely that, as the rally progresses–and there are too many skeptics for it to end just yet–the better quality stocks will play catch-up.
Standard & Poor’s maintains a list of what it calls Dividend Aristocrats, those stocks in the S & P 500 that have increased their dividends every year for the last twenty. I’ve expanded that concept a bit by looking at the much broader S & P 1500.
- 36 large-cap companies
- 34 mid-cap companies
- 20 small-cap companies
If you must buy and hold stocks this is the list of stocks to consider. The average yield-to-cost basis, had one bought these stocks 20 years ago, is 14.2%.