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I have a portfolio of stocks worth $500K, which I would like to serve as an income source of $20K per year in dividends. Please give me your recommendations to steer my portfolio toward that goal by buying dividend-paying stocks that you may recommend.


There was a lot more to your email than this question. To address it completely would go beyond the scope of “Ask the Expert.” It’s clear from the information you provided that you’ve led an industrious, thrifty life that has paid off for you and your family with a sizeable investment portfolio. You would do well to consult a fee-based financial planner with expertise – or access to it through third parties – in investment, taxation and insurance.
As to the specific issue you raise above, your timing seems pretty good. Stocks with high dividend yields have been substantially ignored over the last few years, making them good value relative to some other investment choices. Some blue-chip, household names, in fact, are so cheap that they pay more income on their stocks than their bonds, providing strong growth potential essentially for free. There are no guarantees, of course, but the prospect of regular dividend increases, plus capital appreciation, suggests that these stocks make very good portfolio additions.
These aren’t recommendations – it’s not my place to make them – and you may want to do some further research before considering buying them, but here are some of those high-yield blue chips: AT&T (telecommunications); Bristol-Myers and Johnson & Johnson (health care); Chevron and Conoco Phillips (big oil); Dominion Resources and Exelon (utilities); Kimberly-Clark and Sysco (consumer staples); Philip Morris International (tobacco).
-Conrad de Aenlle