ALLE - 1 Magnificent S&P 500 Dividend Stock Down 20% to Buy and Hold Forever
2023-10-08 06:36:00 ET
One battle-tested way to look for outperformance in the stock market is to find businesses that pay a well-funded and growing dividend. A study by Hartford Funds showed that since 1973, dividend growth stocks in the S&P 500 index have outperformed the broader index (on an equal-weighted basis) by 2.5 percentage points annually.
Furthermore, by focusing on dividend growers with payout ratios (dividend payments divided by net income) below 50%, investors can find stocks with ample room to continue increasing their payouts for decades. One business that fits this description is security specialist Allegion (NYSE: ALLE) with its 1.7% dividend, diminutive 29% payout ratio, and eight straight years of dividend increases.
However, as promising as these dividend metrics are, this is only a portion of what makes the company so intriguing, especially after dipping 20% from its 52-week highs.
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1 Magnificent S&P 500 Dividend Stock Down 20% to Buy and Hold Forever