SENSIBLESTOCKS .COM
Dedicated to the success of the individual investor
Dividends are stocks’ secret weapon. They enable both superior long-term growth
and immediate income. The secret to achieving these seemingly opposed goals lies in
how you deploy the dividends.
Because dividend stocks serve either goal so well,
they may be the best investment anyone can own.

The Top 40 Dividend Stocks for 2008 e-book is the definitive guide for dividend
investing. It provides a
straightforward, comprehensive methodology for picking
great dividend stocks and managing your portfolio.
The “Top 40” are the best
dividend stocks available right now.
You can start building your portfolio immediately.

**********
Keep reading to find out…
1. Why Dividend Stocks are Good for Long-Term Growth
2. Why Dividend Stocks are Good for Income
3. Whether Dividend Stocks Are Safe
4. The 40 Best Dividend Stocks for 2008
5. The Importance of the Investment Guide (included)
6. Features, Benefits, and Ordering Information

**********

1. Why Dividend Stocks are Good for Long-Term Growth

From a long-term perspective, the most profitable stocks are dividend stocks.

The stocks with the best total returns are not the headline-grabbing high-growth, high-
priced, “latest great thing” issues. They are not technology stocks.
The champions in
the best-total-returns game are dividend-paying stocks.

Look at this fascinating graph from Ned Davis Research:




















Notice three things:

First,
the total return from dividend-paying stocks far exceeds the return from
non-dividend-paying stocks,
with the gap widening steadily over time.

Second, even during the high-flying bull market of 1982-2000, when so much total return
came from price increases,
dividend stocks outperformed non-dividend stocks
handily.

And third, when the dot-com bubble crashed in 2000 through 2002, the dividend-
paying stocks held their own
, compared to the steep losses of the non-dividend
payers. And that was no fluke: Look at the crash of 1974—see how much better the
dividend payers held up then, too.

Studies show that dividends have accounted for nearly half—or more—of the total return
of the stock market over very long terms. That may surprise you, considering how little
publicity dividends get. There is no widely reported dividend index that gets the attention
bestowed every day on the Dow, the S&P 500, and the NASDAQ.

But all of those indexes reflect price changes only. Thus, they give a very incomplete
picture of "how stocks are doing." No wonder dividends pass under so many investors'
radar.

Common mis-perceptions are that dividend stocks are--

--slow-growing and boring;

--an indication that a company cannot think of anything better to do with the money; and

--good only for retirees needing income.

These notions are all incorrect. The fact is, dividend-paying stocks are attractive as a
core investment for anybody, of any age.

Let’s focus for a moment on people in the “wealth accumulation” stage of their lives,
which is basically anybody short of retirement. Beyond your immediate financial needs—
day-to-day pocket money, groceries, gasoline, mortgage and other debt payments, and
raising your kids—
your predominant investment goal is to accumulate enough to
retire.

"What's the number?" That’s the big question that financial advisors and online
calculators help you determine: How much will you need for a comfortable retirement?

Whatever it is, dividend stocks will help you get there. Look again at the graph above.
Dividend stocks will help you accumulate far more money than any other stock
investment, possibly more than any type of investment, period.

Dividend stocks offer the best total return. Remember, total return is the real target,
not merely price appreciation.
Total return = price appreciation + dividends. The key
to long-term growth is to re-invest those dividends.

Re-investing dividends brings the miracle of compounding into play. You create
a virtuous circle: Re-invest dividends >> More shares owned >> More dividends to re-
invest >> etc. The dividends act as a turbocharger on the growth of your wealth.

And it gets even better if the dividends themselves are increasing.  As we will explain
later,
the only dividend stocks to buy are those with a strong history of raising
their dividends.

**********

2. Why Dividend Stocks Are Good for Income

This benefit is pretty obvious. You do not have to sell the stock to get the dividend.
It is simply sent to you or credited to your account. You can withdraw it without touching
your principal.

You can do anything you like with your dividends. Those dollars are not "trapped" inside
the stock's share price. The dividends are remitted directly to you.

If you are a retiree, you can spend the dollars as
month-to-month income.  This is
where you reap the benefits of your intelligent wealth-building during the accumulation
years.

My surveys show that many retirees want to have both income and a growing nest egg.
Dividends make this possible. You can re-invest some and spend the rest. And, of
course, because dividend stocks are stocks, chances are good that they will generate
price appreciation over time anyway, even without re-investing the dividends.

Here’s another benefit of dividend stocks. Unlike your pension, fixed annuity, CD, or
bond,
your dividend income will grow each year. That’s because the best dividend
stocks are the ones that raise their dividends regularly. Those are the only kind to buy.
According to Morningstar (May, 2008), stocks in the S&P 500 have been raising their
dividends an average of 17% annually over the past three years. No bond does that, and
neither does your local bank.

When you retire, you want to have plenty to live on, and you also want to keep
your nest egg safe.
These two goals--income and safety--become paramount.
Financial planners call this stage "harvesting." If you are retired, you must figure that
you may be in this stage 30 years or more—as long or longer than you were in the
workforce, accumulating your nest egg. Besides looking after your own needs and not
outliving your money, you may  wish to help your kids buy their first house, be generous
with your grandchildren, or perhaps leave a legacy. That's why income and safety
become so important:
Income to live on, safety to keep the golden goose alive.

**********

3. Are Dividend Stocks Safe?

Relative safety is the third benefit of dividend stocks. The champions of the safety
game are dividend-paying stocks.

There are three aspects to investment risk: (1) actual loss of accumulated wealth; (2)
risk to the
dividends; and (3) loss of purchasing power—inflation.

Well-selected dividend stocks are low-risk on all three scales.

First, risk of actual loss. Remember what we saw in the graph earlier: Dividend-paying
companies held up much better than non-dividend-payers during hard times in the stock
market. This is not surprising. Dividend-paying companies are usually mature, solid, well
established, and reliable.
Many are wondrous cash machines, in perpetually
successful businesses.
They pull in enough money every year to pay a healthy
dividend and still have enough left to grow the business too.
They suffer less during
bear markets.

Of course, all stocks are vulnerable to market risk. Historically, dividend-paying stocks
are less vulnerable than others.

Second, risk to the dividend. The best dividend companies cut their dividends seldom
and raise them often. Their dividend practices tend to persist, being tantamount to
company policy.
They will go to great lengths not to deviate from the dividend
pattern they have established.
They know that their shareholders expect it. Stocks
with a history of increasing their dividends are the only kind we consider.

And finally, risk to purchasing power. This is the hidden risk,
the thief that robs us all:
inflation.
You don’t get a monthly bill in your mailbox for inflation. But it is hidden in the
background, driving up your cost of living. And this is where dividend stocks really shine.

Well-chosen dividend stocks are as safe as bonds. In fact, on this scale, they are safer,
because as their dividends grow, they keep ahead of inflation.
Bonds—often
considered the safest investment—usually do not keep up with inflation.
There’s
a reason that bonds are called “fixed income” investments—their yield never rises and
neither does their face value.

Do you think the prices of gas or groceries are fixed? Of course not. That's why bonds
can't keep pace. But dividend-paying stocks
do keep up with inflation. The dividends
from well-chosen dividend stocks
grow faster than inflation. Five percent, eight
percent, or 10 percent annual growth in dividends—or more—is not at all unusual. The
average annual dividend growth of the Top 40 is more than 18% over the past three
years.

**********

4. The 40 Best Dividend Stocks for 2008

Let me give you a few insights into the Top 40 Dividend Stocks themselves.

•        Any company that cut its dividend in the past 5 years is
not on the list.
•        Neither is any company that has not raised its dividend in at least 3 of the past 5
years.
•        Nor is any company that has not raised its dividend an average of 5% per year
over the past three years. (I made a couple exceptions for Standard & Poor’s “Dividend
Aristocrats,” which are companies that have
raised their dividends for 25 straight years
or more
).

The list contains stocks from
11 different sectors and several foreign countries,
reflecting our global economy.

The Top 40 were selected by first running an initial universe of over 700 stocks through
several screens like those above.

Then,
I used my Easy-Rate™ scoring system for identifying the best dividend
stocks.
It looks at earnings and earnings growth, revenue and revenue growth, ROE
(return on equity), debt, and dividend history to assign points based on the company's
performance. Total points under this system make it easy to see if a company is an
excellent one or an also-ran. Part II of the system scores the stock’s valuation as
Excellent, Good+, Good, etc. The system is methodical, understandable, and
emotionless.

The best-scoring stocks made the Top 40. They are presented in four tables for easy
reference: alphabetically, by company quality score, by total score, and by current
dividend yield.

You may be surprised by some of the stocks
not on the list. A sampling from that group:
•        Boeing (yield too low)
•        Citigroup (average 5-year return too low; cut its dividend)
•        ExxonMobil (yield too low)
•        Pfizer (made list of finalists but was outscored by others)

Among the 40 winning stocks:
•        the highest yield is 9.0%
•        the lowest yield is 2.1%
•        the average yield is 4.2%
•        the average rate of dividend growth (past three years) is 18.3%

The last item is important.
In order to achieve the growth and income benefits
described earlier, you need to buy stocks with good dividend growth rates.
The
Easy-Rate system puts great emphasis on growth, so a natural result is that the Top 40
list is dominated by stocks with a history of consistent annual
dividend increases. It is
those growing dividends that allow you to accelerate total nest-egg growth (if you are
accumulating wealth) or receive a fast-growing yearly income (if you are harvesting).

My multi-faceted approach led to the elimination of many of the highest-yielding stocks
available. (Such lists are easy to find; Standard and Poor’s updates one weekly…with
stocks yielding 16%, 19%, or more.)
The problem with most of the highest-yielding
stocks is that the yields are not sustainable.
They are based on things like current
unique economic cycles, perpetually rising energy prices, and other impermanent
conditions. You’d have to trade in and out of such stocks to make them work. And one of
the goals of Sensible Dividend Investing is that stock turnover should be relatively
infrequent.

Here is a small sample of the companies that made the grade to land in The Top 40:

  •   One of the world’s greatest companies is now on sale, with a historically low
    price compared to its value. The low price has caused its dividend yield to rise
    above 3.5%. It is on Standard & Poor’s 2008 list of Dividend Aristocrats, meaning
    it has raised its dividend for more than 25 consecutive years. (Actually, it has
    raised its dividend every year for way longer than that.)
  •   Several non-USA banks did not get caught in the sub-prime mortgage debacle
    and the ensuing credit crisis. They are spinning out dividends as high as 6.9%.
  •   Well-run oil pipeline companies are sending their shareholders dividends of
    more than 6% and 7%, right out of the gate to new buyers. Never thought you could
    be an oilman (or oil-woman)? Here’s your chance.
  •   This one you can guess: You drink their soda every day. It’s on the list. Oh, you
    drink the other soda? That one’s on it too. Both are great companies that have
    been increasing their dividends for decades.

The book includes completed Easy-Rate Scoresheets for each of the 40 winners, one
page per stock.
This list of the best dividend stocks is available nowhere else.

**********

5. The Importance of the Investment Guide (included)

The text included with the Top 40 list is a complete how-to-do-it guide. It presents the
special study in logical steps that build a stairway to understanding and action.

Investing is not about flash and show. It’s about substance and getting the job done. The
text comprises 45 pages building the case for dividend stocks, describing the Easy-
Rate approach, and explaining how to start and manage a dividend-stock portfolio using
the Top 40 list as your starting point.

The text follows the mission of SensibleStocks.com: Help self-directed individual
investors with fact-based, practical, actionable information that they can use to profit in
the stock market.

I write for the individual investor.
The levels of comprehensiveness and quality are
high, but everything is in plain English presented in a pleasing format.
The
methodology is totally transparent, and there is nothing that is not fact-based or that you
cannot verify yourself.

The text is non-hyperbolic, educational, and accessible. There are no “Secrets of the
Wall Street Gurus,” “Six Things Wall Street Doesn’t Want You to Know,” or “How to Get
Gains of 1716.8% in Six Months.” Those approaches appeal to some people, but not to
me, and I don’t think to the target audience for this e-book.

I am excited about dividend investing. Using this e-book as my guide, I have converted a
significant portion of my own personal portfolio over to dividend stocks, in addition to the
Dividend Portfolio tracked on this Web site.  

As stated earlier, I think that dividend-paying stocks are an ideal investment for most  
individual investors—about the only exception being someone who is looking for fast
hyper-growth. That is unlikely with dividend stocks. Of course, neither is fast hyper-loss.

Owning dividend stocks is exciting, rewarding, and fun. Jump in the pool, the
water’s fine.

**********

6. Features, Benefits, and Ordering Information

Here are the most important features and benefits in the special report:

  • Top 40 List: A list of the Top 40 Dividend Stocks for 2008. Use it as your
    Shopping List to build your dividend stock portfolio.

  • Completed Easy-Rate™ Scoresheets: One concise sheet per stock, 40 in all,
    filled out according to the unique point system devised for this Special Study.
    Saves you the work of looking up data and filling out sheets yourself. The hard
    work has been done for you. The Scoresheets demonstrate exactly why each
    stock survived and made it into the Top 40 list.

  • Clickable links: Each Scoresheet has a clickable link to the company’s Web site.
    No cumbersome entering URLs into your browser.

  • Candid discussion of the pros and cons of dividend stocks. Dividend
    stocks are not for everyone. They will not satisfy someone looking for hyper-growth
    in a short period of time. The text contains a lucid and comprehensive discussion
    of the pros and cons of dividend-paying stocks, and how to identify the best of
    them.

  • Real-money portfolio: The Dividend Portfolio maintained on this site is run by
    the precepts in this special study. That’s my money in there. The Dividend
    Portfolio is not a hypothetical “model,” and the money was not provided by a
    company I work for. It’s mine. Therefore, I take this very seriously.

  • Up to date: The Special Study bypasses the lengthy delays of regular book
    publishing. By comparison, an often-seen “Best Stocks of 200x” book is  
    published each year with information that is almost a year old by the time the book
    is available.

  • Clear, succinct text: About 45 pages of text are included—a friendly,
    comprehensive, candid, and intelligent discussion about all aspects of dividend-
    paying stocks. The text is a complete step-by-step guide to creating and
    maintaining a portfolio of dividend-paying stocks..

  • No separate pamphlets: The text is fully integrated. It flows logically. It contains
    complete information that is easily comprehensible. No cumbersome “bonus
    reports” that are really just come-ons to make it seem like you are getting a
    great deal. That’s just a marketing ploy—and it’s also lazy, forcing you to weave
    the information in each pamphlet into the complete picture. I've already painted the
    complete picture for you.

  • List of omitted stocks: These are stocks you might normally expect to find in a
    list of the best dividend stocks, but which did not make the grade here. It
    contains eye-opening facts that show you why these companies did not make the
    Top 40.

  • Focus on consistency of dividends: My point system rewards companies
    that pay dividends regularly. Minimum requirements are that the company must
    have paid dividends for at least 5 years running; have raised them in at least 3 of
    those 5 years; and never lowered them. Note that some banks, reeling from the
    credit crisis, have recently slashed their dividends. You won’t find any of them in
    the Top 40 list.

  • Focus on rising dividends: I've also rewarded companies that regularly
    increase their dividends. To keep up with inflation and generate the best total
    returns, you need to know which companies raise their dividends regularly. Extra
    points were also awarded to companies for raising their dividends faster than
    other companies.

How to Buy

1.     Click any of the “Buy Now” buttons below located on this page. The price is $39...
less than a buck a stock, plus you get the Investment Guide and filled-out Easy-Rate
Scoresheets for each stock.
2.     Payment is securely handled through PayPal. You do not need a PayPal account—
they accept major credit cards in the usual fashion.
3.     After payment is confirmed, you will be directed to a “Thank You” page. There you
will find a clear link to the document you have purchased. You will also receive a
confirmation email, and that too will contain the link to the document.
4.     Use the link to access the pdf document (e-book). Access is instantaneous. Use
the Adobe Acrobat Reader to view. Download the document to your own computer.

It’s as easy as that. Within a few minutes, you will have your own copy of
THE TOP 40
DIVIDEND STOCKS FOR 2008: How (and Why) to Build a Cash Machine of
Dividend Stocks.

Best Wishes for Your Investing Success,

Dave Van Knapp


PS: I am really excited about dividend investing. After creating this special study, I
revamped my approach to the Dividend Portfolio tracked on this Web site. The portfolio
is now run exclusively according to the methodology presented in
THE TOP 40
DIVIDEND STOCKS FOR 2008: How (and Why) to Build a Cash Machine of
Dividend Stocks.

Not only that, I have converted a good portion of my own personal nest egg to dividend
investing. I am convinced that, for the average individual investor, this is the best form of
investing for the long haul. And you know what? I sleep better at night because of it.

PPS: In creating this special study, I started with my book, SENSIBLE STOCK
INVESTING: How to Pick, Value, and Manage Stocks
. (See cover image and links
to the right.)

I re-calibrated the book’s Easy-Rate™ scoring system to
emphasize dividend factors
and make the best dividend stocks “pop out.” I tweaked and played with the new scoring
system until I was sure that it would truly identify the best dividend stocks.

Then I collected names of potential candidates. I scoured innumerable sources. When I
was done, I had
more than 700 stocks as candidates.

Third, I subjected all of them to several
important tests. Have they been paying their
dividends uninterruptedly and raising them regularly? Have their total returns kept pace
with the market? Do they have a decent yield right now? There were five tests like these,
and they reduced the 700 candidates to
just under 100 finalists.

Finally, I used the Easy-Rate system to score all of the finalists. I ranked them according
to their scores. I selected 34 stocks on scoring alone. Then I added a few “editor’s
choices.” That gave me the Top 40 list.

Notice that
I did not just concentrate on current yield, as so many dividend
investors mistakenly do. Many of the highest yielding stocks have hidden
pitfalls and are literally “too good to be true.” They may be out of business in a
couple of years.

Instead, I kept my eye on the ball: total returns and safety. Thus, factors like
consistency, reliability, and dividend growth played a large role in determining the Top
40 list.

This Special Study is not sold in bookstores. It’s easy to order online. Just follow the
instructions above. You will get
THE TOP 40 DIVIDEND STOCKS FOR 2008: How
(and Why) to Build a Cash Machine of Dividend Stocks
in minutes. Downloading
the report to your computer is instantaneous once payment is completed.
Dave Van Knapp

Author of

SENSIBLE STOCK INVESTING: How to
Pick, Value, and Manage Stocks

and

THE TOP 40 DIVIDEND STOCKS FOR
2008: How (and Why) to Build a Cash
Machine of Dividend Stocks

About Dave Van Knapp
Spec Sheet

THE TOP 40 DIVIDEND STOCKS FOR
2008: How (and Why) to Build a Cash
Machine of Dividend Stocks

  •     99-page Special Study, including
    text, tables, the Top 40 list, and Easy-
    Rate Scoresheets on each stock
  •    Based on the principles of
    SENSIBLE STOCK INVESTING:
    How to Pick, Value, and Manage
    Stocks, specially modified for dividend-
    paying stocks
  •    Text completely and lucidly
    describes what dividend stocks are,
    why to invest in them, the
    characteristics of the best ones, and
    how to create and maintain a dividend-
    stock portfolio.
  •    Tables show the complete Easy-
    Rate™ Scoring System for dividend
    stocks…so you can rate your own
    stock ideas or update the Top 40 list
    included in the Special Study.
  •    Four other tables present the Top
    40 sorted in different ways, so you
    can easily focus on particular
    characteristics.
  •    Forty Easy-Rate Scoresheets, one
    for each of the Top 40, are completely
    filled out with the most pertinent
    details on each stock, so you can
    double-check for yourself why these
    have been chosen as the best 40
    dividend stocks available today.
  •    Format: E-book in Adobe pdf file.
    Use Adobe Acrobat Reader to view
    and download. The entire contents are
    copyrighted ©  2008, but the pdf file
    has no annoying restrictions on
    printing or copying. Will print
    normally on 8.5 x 11-inch paper.
  •    Publication date: May, 2008. All
    information is up-to-date as of April,
    2008.
  •    Price: $39.
The Importance of Rising Dividends

When you first purchase a stock, the
“current” dividend is the dividend payout you
get from the very beginning. Expressed as a
percentage of the stock's price, it is called the
"current yield." As companies increase their
dividends (pay out more dollars per share),
your yield, based on your initial investment,
goes up.

Say a company has a dividend yield of 3.5%
when you purchase it, and it increases its
dividend 12% per year—as many stocks on
the Top 40 list do. Your yield goes from
3.5% in Year One, to 3.9% in Year Two, to
4.4% in Year Three, to 4.9% in Year Four,
and to 5.5% in Year Five.

In dollar terms: Suppose you invest $10,000
in this stock. In Year One, you’ll receive
$350 in cash dividends. In Year Two, $390.
Year Three, $440. Year Four, $490. And Year
Five, $550.

If you’re young and accumulating, you can
re-invest that money, perhaps buying more
shares of the same company. If you’re retired
and want to take the dividends as income to
live on, you can do that too.

Those increasing payments come to you no
matter how the underlying stock’s price
oscillates. Hopefully that price will trend up
over the long term, as the company’s
fortunes improve, giving you two important
sources of wealth: the dividends and the
increasing values of the shares themselves.
Price $39.00
Price $39.00
Price $39.00
Price $39.00
May, 2008: Introducing...

THE TOP 40 DIVIDEND
STOCKS FOR 2008:
How (and Why) to Build a Cash
Machine of Dividend Stocks

A Special Study by Dave Van Knapp,
author of SENSIBLE STOCK
INVESTING: How to Pick, Value, and
Manage Stocks
Grow Wealth Long-Term OR Harvest
Income Immediately with The Best
Dividend Stocks!
Learn How to Build Your Own
Magnificent Growth/Income Engine