Safe Dividend Investing
In 2000, I lost $300,000 in mutual funds that an investment advisor had put my lifesavings into.... I lost it because I had entrusted it to an industry that does not educate investors nor encourage them to look closely at what that industry is doing with their money..... I set out to find a better, safer way to invest..... My podcasts relate to what I learned in creating a generous, reliable income and in growing my wealth.... A few of the more important lessons I learned and explore are:.... (1) It is critical that you become a self-directed investor.....(2) If you can not easily measure the risk and potential in an investment, then do not invest in it. This excludes from your portfolio bundled investment devices, like mutual funds, ETFs and Index funds,..... (3) Financially strong companies who have paid “good dividends” for decades will continue to stay strong and continue to pay good dividends because it is both part of their "character" and in their executives selfish interest.....(4) Diversification is critical. Investing equally in the best 20 strong dividend stocks is the ideal.....A portfolio of 20 limits your risk in any one stock to 5% of your wealth..... No matter how strong you think a stock is, do not fall in love with it..... I have lived very well off my steady dividend income for 18 years, through two market crashes and one pandemic. I have watched my portfolio’s capital more than triple from where I started, despite taking out a generous dividend income every year to live on... In charts, for my second investment book,(Safer Better Dividend Investing), I spent months scoring all 628 dividend stocks paying dividends of 6% or greater traded on the TSX, NYSE and the NASDAQ. I discovered dozens of stocks that can provide not only a generous dividend income but outstanding capital growth.....Financial independence is realizable for careful, patient, dividend investors.
Safe Dividend Investing
Podcast 276 - WHY NVIDIA, MASTER CARD, VISA, COCA COLA, ETC. FALL SHORT
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Welcome to Safe Dividend Investing’s Podcast # 276 on May 23rd of 2026.
My name is Ian Duncan MacDonald, and I am the author of 7 investment books. My seventh investment book, Achieving Financial Independence Safely - 200 NYSE Stocks Analyzed and Scored" became available January 3rd on Amazon. You can easily find it by searching in Amazon or Google for "Ian Duncan MacDonald books".
For more information on all my books, stock scoring software and podcasts go to www.informus.ca. In the website you will find a free AI system to analyze and score your proposed stock purchases. A strong portfolio can be built within a few minutes. When I first saw this AI program in action, it made that me realize investment advisors could be replaced by AI technology within ten years.
In this week's podcast I discuss why Nvidia, this week's hot AI stock, and Peter Druker's five highest scoring stocks NYSE stocks ( Master Card, Visa, Procter & Gamble, Johnson & Johnson and Coca Cola) do not qualify for my stock portfolio. For safe diversity I want my million dollar portfolio to contain 20 diverse stocks to provide me with a safe income exceeding $60,00 annually with the expectation that their rising share prices and dividend payouts will last my life time. How I will choose these 20 and where to find them is detailed.
IAN
Ian Duncan MacDonald
Author and Commercial Risk Consultant,
President of Informus Inc
2 Vista Humber Drive
Toronto, Ontario
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imacd@informus.ca
Podcast 276
Safe Dividend Investing
Greetings to investors all around the world. Welcome to Safe Dividend Investing’s Podcast #276, recorded on May 23rd of 2026. My name is Ian Duncan MacDonald. I am the author of seven investment books.
To learn more about how you can benefit from my investment books, visit either my website www.informus.ca or www.amazon.com’s website and do a search for "Ian Duncan MacDonald books”. At Amazon you can find sample chapters and reviews by investors who have benefited from my books.
It was brought to my attention that the free AI stock compilation program I had referred to in the transcript of Podcast 275 had a distribution problem. Apparently, the transcripts are not being picked up by Spotify or Amazon. I have therefore copied the transcript to my website www.informus.ca where the AI program for scoring stocks can be copied and pasted into the AI processor of your choice.
Again, this week’s business news was dominated by Nvidia. On Friday more than 169,275,710 of its shares were traded. The shares rose to $215.033. Only 4 years ago they were trading at $19.60. More than three dozen analysts are recommending it as a buy. Yet popularity and a growing share price are not as important as being the best managed company in which to invest your money. Who are the five best managed companies traded on the New York Stock Exchange?
According to the “Druker Scoring” method, the five best managed companies in descending order are reported to be:
(1) Mastercard Inc., stock symbol MA
(2) Visa Inc, stock symbol V
(3) Procter & Gamble, stock symbol PG
(4) Johnson & Johnson, stock symbol JNJ
(5) Coca Cola stock symbol KO
I think that everyone immediately recognizes these five companies as being extremely large American companies who have been successful for the better part of a century, but what is a Peter Drucker Score? Who was Peter Drucker.
Drucker is regarded as being the foremost business management consultant and business educator of the 20th Century. Anyone who has studied for a master’s in business administration has probably read his books. He was actively consulting until his death at the age of 93 in 2005.
It is interesting to compare Druker’s thinking to that of the current managers of many companies traded on the New York Stock Exchanges. For example, Druker, who promoted management by objectives and self-control, did not see maximizing profits as the primary objective of a company. He thought that for a company to survive and grow, its primary purpose had to be to serve their customers. Thus, he emphasized such things as customer satisfaction, having your employees fully engaged in the company and always pushing for innovations.
His score measured how effective a company was managed in achieving a balance between effectiveness and efficiency. This approach is far from the stereo typical objective reflected in the “Greed is good” declaration by the stockbroker character Gordon Gekko, in the movie Wall Street.
Over his lifetime, unlike number crunching accountants, Druker focused his research on the relationships between human beings in large institutions. He wanted to understand how people worked together to form successful companies.
Unfortunately, on close examination I found none of Druker’s five best managed companies could qualify for entry in my portfolio
In first place in the Druker scoring system’s best managed companies is Mastercard Inc. It had a share price of $498.09 with a very good operating margin of 57.91%. Its book value of only $8.64 on a stock selling for almost $500 makes you wonder if investors worry about a sudden decline in what appears to be an overpriced stock.
However, what disqualifies Mastercard immediately from my consideration is that it only pays a dividend yield of 0.70%. Thus, if I were to invest that $1,000,000 in my bank savings account into Mastercard I would have to be able to live on $7,000 a year from Mastercard’s dividends. Can you live on $7,000 a year? I certainly can’t.
However, if I go to Chapter 8 in my last book “Achieving Financial Independence Safely – 200 NYSE stocks Analyzed & Scored”, in a few seconds I can immediately see in the list of the 200 listed stocks, 24 financially strong stocks (their strength as indicated by their IDM stock score exceeding 60 out of 100) who are paying a dividend over 6%. The highest was paying a dividend of 14.86%. Nineteen of these stocks have share prices under $50. Mastercard also had a strong IDM stock score of 62 but as you can see a high score without sufficient dividend revenue makes it unattractive to me.
It is not difficult to find 20 high dividend, safe stocks to invest a million dollars in that would provide an annual livable dividend income in the $60,000 to $80,000 range. Considering each stock’s 25 years of historical share prices and dividend payout records you can immediately see those whose management have had consistent share prices and dividend gains over the years. Often, the increase in the dividend payout increase percent is much higher than the share price percentage increase. My experience of investing in such stocks for over 20 years has proven to me that it is not unreasonable to expect such gains to continue.
If I could not generate enough dividend income to live on from Druker’s best managed high scoring companies, it would force me to liquidate some of the purchased stocks each year to provide a survival income. Would I then hope that I was going to die young before I had sold all the shares and was left penniless?
In Druker’s second place was Visa Inc with a share price of $330.75 and a dividend yield percent of 0.81% which generated an annual dividend payout of $2.68 per share. The book value of the stock was $19.79 indicates the stock could be considered overpriced and more likely to shrink than to grow. Visa’s strong operating margin of 61.12% was even higher than Master Card’s. However, despite this strength it also fails like Mastercard to generate enough dividend income to live on despite having a high IDM score of 65.
In third place was Procter & Gamble whose share price was $142.4 with a dividend yield percentage of 3.06%. This was the highest yield of the five stocks. However, its annual dividend payout of $4.35 would still be a long way from providing enough income to live on. The stock’s book value of $22.21 was better than Visa and Master Card but indicating its share price was also overpriced. With an operating margin of 23.59% it is “normal” operating margin for a successful company. The IDM score of 51 was the lowest IDM score of these five Druker stocks.
In fourth place was Johnson & Johnson whose share price was $229.32. It was paying a dividend yield percent of 2.34% and paying out $5.36 in dividends annually. Still not enough to live on. Its book value of $33.86 indicated it too was overpriced. The operating margin of 25.88% was good. With an IDM score of 67 it was the highest IDM score of the five stocks.
In fifth place was Coca Cola. At $81.55 it had the lowest share price of the five stocks. Its dividend yield of 2.60% pays out a dividend of $2.12 annually. The book value of $7.48 was the lowest of the five stocks. Its operating margin of 30.01 showed strength and its IDM score of 62 was good.
Interestingly most Blue-Chip stocks in the Fortune 500 pay a dividend of less than 2% so PG, JNJ and KO with dividend yields over 2% would be attractive to timid investors who think they can only invest safely in Fortune 500 companies. Since the Fortune 500 includes the 500 largest U.S. companies by revenue only Procter & Gamble, Johnson and Johnson and Coca Cola easily qualified for inclusion in that index. Mastercard and Visa generate lower revenues, relative to these financial/industrial giants, so they can sometimes fall outside the top 500.
While the five companies with the highest Druker scores may be thought to be better managed than thousands of other companies on the New York Stock Exchange, It seems that good management does make a company a good investment for dividend investors. To some, like me, the objective of investing in stocks is to realize sufficient income from your investments so that you can maintain the good lifestyle you have grown used to with as little effort and stress as possible. That objective translates into finding 20 financially strong companies whose shares you could safely hold until you die.
20 stocks create safe diversity so that any deviation by a few of these stocks would have minimal impact on the total portfolio’s growth in both share price value and dividend payouts. It also limits the amount of work required in buying and monitoring the stocks
While these five NYSE companies rate highest in the Druker Scoring system because they are leaders in customer satisfaction, employee engagement, innovative development, social responsibility and financial strength, they fall short as income producers. For Investors like me who seek shares in companies managed by executives who believe in sharing the corporation’s ever-growing profits with their shareholders, who are the owners of the company.
That’s all for this week, folks.