Praise for
THE TOP 40 DIVIDEND STOCKS FOR 2008
Author Dave Van Knapp
REVIEW BY JASON KELLY,
Author of the best-selling
The Neatest Little Guide to Stock Market Investing

May 14, 2008

Dave Van Knapp of SensibleStocks.com has just published a new e-book called The
Top 40 Dividend Stocks For 2008: How (and Why) to Build a Cash Machine of
Dividend Stocks
.

Like all of Dave's work, it presents the case in logical steps that build a staircase to
understanding and action. Dave is not about flash and show; he's about getting the job
done.

The book shows:
  • What dividends are
  • Why they're a big part of succeeding in stocks
  • Characteristics that define the best dividend stocks
  • How to create and manage a dividend stock portfolio
  • The 40 best dividend stocks for 2008

From page 10:

    "In 1934, Benjamin Graham and David Dodd wrote in their classic Security
    Analysis, "The prime purpose of a business corporation is to pay dividends to
    its owners [emphasis added]." Many investors agreed, considering the
    possibility of stock price increases to be speculative in comparison to a steady
    flow of dividends.

    "But 66 years later, by the end of the bull market of 1982-2000, there was far
    less interest in dividends among investors. The humongous rise in share prices
    during the long bull market dwarfed dividends' contribution to total returns. Many
    investors' interest in dividends dropped to near zero.

    "But times change. The bursting of the bubble from 2000-2002 sobered up many
    investors. There has been a rekindling in appreciation for dividends. Investors
    realize that a dividend stock portfolio can lower risk, grow principal, and steadily
    increase income over time.

    "Dividends are stocks' secret weapon. Studies show that -- despite their
    relatively small contribution during the bubble years -- dividends have accounted
    for half or more of the total return of the stock market over very long terms. This
    may be surprising considering how little publicity dividends get. There is no
    widely followed dividend index that gets the kind of publicity bestowed every day
    on the Dow, the S&P 500, and the NASDAQ -- all of which reflect price changes
    only, and therefore give a very incomplete picture of "how stocks are doing."

    "Dividend stocks are attractive as a core investment for anybody. Common
    misperceptions are that dividend stocks are slow-growing, boring investments;
    that a company's payment of dividends is a sign of weakness, that the company
    cannot think of anything better to do with the money; and that dividend stocks are
    good only for retirees needing income. These are all incorrect, unless you
    consider steady income and wealth-building to be boring.

    "In fact, dividend stocks may just be the best investment that anyone can own."

Dave explains his Easy-Rate scoring system for assembling the best dividend stocks.
It looks at earnings, revenue growth, debt, and dividend history to assign points based
on their values. A stock's points make it easy to see if it's Excellent, Good+, Good,
Fair+, Fair, Poor, or Bubble.

Dave then runs his own system to come up with the top 40 current dividend stocks,
presented in four tables for easy reference: alphabetically, by 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% and the lowest is 2.1%. The
book includes completed Easy-Rate Scoresheets for each of the 40 winners.

-----------------------------------------------------------------------------------------------------------------------
REVIEW BY DIVIDEND GROWTH INVESTOR,
Published on The DIV-Net, The Dividend Investing and Value Network

September 19, 2008

Recently I received an interesting book on dividend investing, titled “The Top 40
Dividend Stocks for 2008 – How (and Why to Build a Cash Machine of Dividend
Stocks, written by David P. Van Knapp. The author, who also maintains the site
SensibleStocks.com, decided to skip the publishers altogether and has his book
available to readers online in a PDF format. That made it easier for him to provide an
up to date edition in order for his readers to stay competitive in the markets.

The book is very well written and is organized in 8 chapters, starting with an overview
of dividend stocks in general, characteristics of the best dividend stocks, creating and
managing a dividend portfolio and ending with the system that the author has created
which has helped him identify the top 40 dividend stocks that he recommends. This
book should be appealing not only to novice dividend investors but also to more
seasoned stock pickers with its wealth of information on dividends. Almost everything
you ever wanted to know about dividends could be found in it.

The author starts the book by giving an introduction of what dividends are and why
investors should buy stocks which produce increasing streams of dividend income. He
also discusses the pros and cons of dividends versus share buybacks, and proves
that it pays to own the “boring” dividend stocks which provide the most efficient stream
of income from a tax perspective right now. I especially enjoyed reading about his
discussion on managing portfolios consisting of the best dividend stocks. I also liked
his ideas on portfolio management where he set clear goals and objectives as well as
strategies for achieving them. I also found the idea of avoiding to catch falling knives,
and instead wait for the stock price to turn before accumulating shares particularly
intriguing.

Another section focused on certain types of companies which are organized
specifically to pay high dividends such as business development companies, real
estate investment trusts as well as master limited partnerships.

Many investment services will sell you a cheap book which describes a system which
is pre-sold throughout the book. Not this one – this author sells a buy one get one free
type of deal as he not only shares his stock picking system but also provides specific
picks as well as the reasoning behind selecting those picks. The last half of the book
was specifically dedicated to analyzing the top 40 dividend stocks for 2008 in more
detail, thirteen of which were non-US companies….

Despite the fact that I enjoyed his writings on the BDC, REITS and MLP’s, I believe
that most investors overlook these vehicles because the distributions from the three
types of firms are taxed somewhat differently compared to distributions from common
stocks. I would have…enjoyed reading more about taxation on MLP’s from his own
experience. Most other yield hungry investors would probably enjoy a small section on
Canadian Income Trusts as well as tanker stocks….

Overall I enjoyed reading the book, and would recommend it to any serious dividend
investor who wants to succeed in his or her endeavors. It is easy to read, well
organized and provides a wealth of information not only for the novice investor but also
for the seasoned pro!


This article was republished on September 26, 2008, on the
Dividend Growth
Investor blog
.
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