Why Being A Dividend Champion Isn't Enough

Overview
The inflation rate over the past ten years has been 1.95%. This is low in terms of a historical perspective, but when you look at investment opportunities what you look for at the absolute minimum are investments that will protect your money from inflation. Even if you cannot make money on an investment, you want to at least preserve your investment and earn a rate of return that at least equals the inflation rate.
For dividend investors, the Dividend Aristocrats and the dividend champions lists are two valuable resources that investors often look to in order to find attractive investment opportunities. However, being on this list doesn't mean that a stock is an automatic buy. In fact, long term investors should probably avoid some of these stocks, at least for now.
In this article, I will be taking a look at six Dividend Champions that have provided average annual returns over the past decade lower than the inflation rate. These stocks include:
Farmers & Merchants Bancorp (OTCQX:FMCB) Archer Daniels Midland (NYSE: ADM) Eagle Financial Services (OTCQX:EFSI) Brady (NYSE: BRC) Telephone & Data Systems (NYSE: TDS) Raven Industries (Nasdaq: RAVN) Farmers & Merchants Bancorp
Over the past decade, the stock has averaged annual total returns of 0.77% (with dividends reinvested). So an investment of $10,000 in Farmers & Merchants Bancorp ten years ago would be worth just $10,647 today.
Looking at the chart below, you can see that over this... Read more