Blue-Chip Investing vs. Value Investing: An Illustration

I gravitated towards high-quality dividend stocks because you only have to make a decision once and the ownership process is satisfying in the same way that planting an oak tree on the family farm and watching it grow for decades is satisfying.

Imagine if, around 2002, you learned that McCormick controls 40% of the spice market. You checked out the company’s history and saw that it has a conservative balance sheet, double-digit profit margins, and a dividend history that doesn’t miss a beat. You figure that people will continue to put salt and pepper, among so many others, on their food.

So you buy x number of shares. Well, guess what happened from 2002-2018. Profits grew from $1.26 per share to $4.96 per share, and the dividend grew from $0.42 to $2.08 per share. Literally every year, the profits and and dividends have grown. How do you not love that? Read the rest of this article!