A Simple Formula for Buying the Best Dividend Stocks for 2025

Many investors are worried about a recession. Or the Federal Reserve is easing policy too quickly. Or not fast enough!

And then the upcoming one awaits us elections. Buckle up, my fellow adversary.

Fair. But let’s remember that the fears in the headlines are usually built into the price. A popular “threat” rarely disrupts the market.

On the other hand, we opponents are concerned about a scenario that could emerge from left field. We’re not worried about hard landing. Or soft landing. Underestimated risk is no landing this reignites inflation.

Inflation should concern dividend investors

Rates are falling, assets are rising – let the good times come! This will be fun for a while. Until prices go up again.

Fed Chairman Jay Powell has officially abandoned his hawkish stance. It lasted almost two years, longer than I expected. But hey, it’s an election year and I’m sure there was pressure on Jay to relent. So he did it.

The Fed is currently telegraphing the rate cuts. This is fair because inflation is cooling down. But what if the economy heats up again, and so do prices? The stock market could really start to wobble. Tothat is, investors understand that a rising stock market means financial conditions are deteriorating. easy which is fertile ground for return of inflation.

In this case, cash would be a bad place to be. Even today inflation has cooled, but this still operates at 2.5%. We need to beat that number.

This is entirely doable with my three-step post-election dividend plan.

My three-step dividend plan for 2025

Step one: Find a dividend that is growing quickly. UnitedHealth Group (UNH) this is a great example. The insurance company has a permanent audience. The company significantly increases dividends every year. It has grown by an astonishing 460% over the past decade!

Its stock price over the same 10-year period? Growth by 460%. Once again, the ticker follows the payout like a puppy dog:

Forever-height dividends are the result of constantincrease cash flow. UNH’s continued growth is due to more than just luck. Management had the foresight to open its own technology division, Optum, in 2011. Optum provides benefits to pharmacies, operates clinics and provides data analytics and other advanced technologies to optimize healthcare.

This cash cow stays full All economic environment. In addition, UNH is about when prices rise. Inflation no problem for this management team. If anything, they enjoy the opportunity to charge more money!

As investors, this brings us to the second step, where we time Our buying point is by purchasing a “dividend magnet” lag. This ensures that we are buying low when the stock is undervalued in terms of its payout.

Then, step three: we sell high! We owned UNH twice during my tenure. Hidden profitability research service. We took profits for the first time when the stock price rose. upcoming his payments:

I added magnets to the diagram above to highlight where UNH is located. cheap regarding its dividends. This is a signal that the almighty dividend magnet will push the stock higher.

Many investors waited throughout 2019 and much of 2020 for UNH’s dividend magnet to take effect. Over the course of days, weeks and even months, stock prices can deviate far from their payouts. Higher or below. Remember, this is a “get rich slowly” strategy. Sooner or later the magnet will work.

Why did we sell shares in December 2022 and buy them back two months later? UNH got ahead of itself. So we sold high… and bought on the subsequent dip:

UNH is essentially our own ATM located at: CI! Whenever we need a double-digit profit, we buy UNH low and sell high:

UNH’s yield today is 1.5%. On paper, this is a piece of cake, which is why many vanilla dividend investors overlook this stock.

UNH’s yield has fluctuated between 1% and 1.5% for years on end. Which is interesting because we might think that the company with dividend growth of 460% over the past decade would have paid more.

Well, it’s not for lack of effort on UNH’s part. These dividend advances are “absorbed” by Mr. and Mrs. Market. They see the increase and increase the stock price. The current yield never changes because the price rises over time!

That’s why buying UNH is simply the safest and surest way to get rich in stocks.

I like it but no enough love UNH here. He rose above me Hidden profitability buy it before price $550.00. Let’s be patient and see if we can buy (more) on the dip.

Brett Owens is the company’s chief investment strategist. Opposite View. For even more great income ideas, get a free copy of his latest special report: Your Early Retirement Portfolio: Huge Dividends—Every Month—Forever.

Disclosure: none