In light of our mention yesterday of high and low-tax states, a reader says:
“I moved from a mixed-tax state (OK) to tax-friendly state (AL). I had a small business. Never a tax problem in OK, but Alabama’s revenue grab is aggressive and every town demands a local tax permit. I had to give up the business.”
That’s a shame. When “aggressive” taxes become regressive, right?
“Two comments on tax friendly states: perhaps Kiplinger’s hypothetical case of a couple with $150,000 income and $10,000 in dividend income justifies their conclusions; however, as a retired couple on a fixed income living in the “People’s Republic of California,” I see no way that CA is not in the top 10 LEAST friendly states.
“Perhaps KIplinger should break down their conclusions by a variety of income categories. How typical is their sample case? Never in our lives did my wife and I earn over $100,000.”
We, too, were shocked California didn’t break the top-ten. And you might have a point about Kiplinger’s sample.
Your Rundown for Wednesday, October 23, 2019:
Dividend Aristocrats are a bundle of S&P 500 securities that have increased their dividends for at least 25 years in a row.
What’s more, these stocks have mostly beaten the broader markets in total returns for the past five years.
Here’s the catch: Of the 57 Dividend Aristocrats, 40% offer dividend yields below 2%. (Doesn’t exactly blow your socks off.)
But there are three companies topping the list that have serious passive income-generating potential:
- Pharmaceutical company AbbVie (ABBV)
- Telecom AT&T (T)
- Gas and oil giant ExxonMobil (XOM)
All three companies have an annual dividend yield greater than 5% — with AbbVie leading the pack at 5.6%, AT&T at 5.3% and ExxonMobil at 5.2%.
While we can make the argument that all three of these Dividend Aristocrats are profitable and worth the investment, AbbVie’s a standout.
The pharmaceutical company manufactures a diverse lineup of medications — that’ll only benefit from the company’s recent merger with Allergan — and offers the richest payout with a winning valuation; its dividend should be safe for the long-term.
Market Rundown for Wed. October 23, 2019
S&P 500 futures are down 3 points to 2,991.
Oil is down 75 cents to $53.73 for a barrel of West Texas crude.
Gold’s up $9.10 to $1,496.65 per ounce.
Bitcoin’s down 5.6% to $7,639.71.
Have a great day; we’ll talk tomorrow.
For the Rundown,