This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Forget Growth vs. Dividend; Buy Both

But there's no denying the 900% rise in Google (GOOG - Get Report) since its 2004 IPO. Same with companies such as Visa (V - Get Report) or Mastercard (MA - Get Report), which have had incredible runs over the past few years, and have not indicated changing that trend any time soon.

I'm in my mid-20s, which is why I've stacked my portfolio with these higher-beta stocks. I want more exposure to big potential winners in the intermediate term. I don't necessarily need the safety and protection of a blue-chip stock, no matter how consistent it is. But that doesn't mean I don't want any exposure to them.

Growth is only growth for so long. In five to 10 years, many growth names run themselves irrelevant, or in other words are no longer growing like they once were. On the contrary, blue-chip stocks can consistently churn out moderate growth for decades, while maintaining low valuations.

In this case, I want to build a model portfolio consisting of six stocks in total. Because I am young and can afford the consequences of being wrong, I'm going to select four growth names and only two dividend payers. Here's what it looks like:

For my growth names, I have selected stocks that continue to outperform the market year after year. Sure, Starbucks (SBUX - Get Report) doesn't have the prettiest chart from 18 months ago, and a recent court ruling has dampened Visa's near-linear run. But these four names have incredibly optimistic outlooks, are the leaders in their respective fields and print money like the Federal Reserve. The three-year performance is undeniable.

On the contrary, Coca-Cola (KO - Get Report) and McDonald's could have significant headwinds in the short and intermediate terms, especially the latter company. Declining same-store sales growth, along with increased competition and input costs continue to weigh on the stock price.

But despite the potential multiyear slump these stocks might have, their brand recognition, international exposure, and strong dividend make them hard to ignore. McDonald's has raised its dividend by 10% or more in each of the last 10 years, with the exception of 2008, when it only raised the payout by 9.33% in the midst of the financial crisis.
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
SBUX $56.25 -1.59%
KO $44.84 0.00%
MA $96.45 0.00%
V $77.19 0.00%
MCD $128.40 0.00%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs