Finding dividend stocks you can buy and hold until retirement is hard, but not impossible.
Indeed, here are two stocks that I believe have all the hallmarks of retirement dividend champions.
Profiting from data
Fidessa(LSE: FDSA) provides software and services, such as trading and investment management systems, analytics and market data to the financial services industry. This is a business that's difficult to disrupt, and companies like Fidessa have to spend years building a name for themselves and reputation for quality.
All that time and investment pays off over time. Its leading position has helped it grow revenues by 25% over the past five years. Management believes that the company is well placed to expand further in the years ahead.
A trading update published today noted: "Fidessa believes that it is entering a period where opportunity is returning. [It] expects this opportunity to arise both from customers developing their businesses in response to market changes and also as a result of other vendors struggling with the scale needed to operate successfully in the increasingly complex environment."
The group's leading position is excellent news for income investors. It's unlikely that smaller upstarts will disrupt the firm, and as it grabs more market share, it's going to be even harder for competitors to impinge on growth.
Fidessa's market position is allowing it to pursue an aggressive dividend policy. This year analysts expect the company to return 100% of earnings to investors via dividends, giving a dividend yield of 4.2%.
At the end of the first half, the group reported £71m in cash, enough to support the dividend for two years based on 2016's numbers.
So overall, from a dividend perspective, it looks to me to be a great buy-and-forget investment.
Building for the future
In my opinion, the best dividend stocks are businesses built for the long run, just like Aviva(LSE: AV).
As a manager of pensions and savings, its management has to manage the business for the long run, and this means having a suitable dividend policy in place.
Its experienced management team has managed this well. In fact, the company is generating cash over and above its dividend requirement.
At the beginning of August, the company reported operating profit growth for the fourth year in a row -- up 11% as a result of strong business performance worldwide. On the back of these numbers, the company was able to increase its interim dividend per share by 13%. For the full year, analysts believe that the firm will support a yield of 5.2% with the payout covered twice by earnings per share.
As the world's population grows, the demand for pensions and savings is only increasing, and Aviva is well placed to benefit from this growth. As earnings rise further, the company's dividend should increase as well.
You can't succeed without dividends
Research has shown that over the long term, dividends account for half of equity returns, which is why I believe that if you invest without considering dividends, you're putting yourself at a serious disadvantage to the rest of the market.
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Rupert Hargreaves does not any share mentioned. The Motley Fool UK has recommended Fidessa. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.