One of the benefits of my column for the Herald- Tribune has been dramatically increasing my friendships.

When I first started writing for our newspaper in 2008, I was a newcomer to Sarasota. The business editor of the newspaper suggested that I provide my email at the bottom of the column to encourage dialogue with the readers. I have benefitted tremendously from this communication tool, because my readers not only introduced me to clubs in our community such as the Sarasota Economics Club and the Sarasota Media Club, but they also have provided me with ideas for my column.

In my article “My story of financial setbacks, recovery and why I still worry” I expressed my preference for stocks that pay close to 3 percent and have consistently shown an ability and willingness to increase these distributions. Stocks such as these should experience a lack of volatility resembling bonds.

As an example of the two-way communication provided by the column, a friend responded by passing on information on three companies that fit my description of investments I favor. I pass them on for further discussion:

Coca Cola enjoys a worldwide reputation, operating in every country except North Korea and Cuba. Coca-Cola products represent roughly 3 percent of the estimated 55 billion beverages served every day around the world. The company has paid dividends continuously for more than 100 years.

My friend pointed out to me that, since I retired at the end of 2004, Coke has doubled its dividend. It pays slightly less than 3 percent annually. During that same time, the stock has also appreciated close to 100 percent. My friend argued that he expects Coke’s stock price to track its dividend growth.

Chevron is one of the world’s largest integrated oil companies. To maintain growth, the company has successfully invested in liquefied natural gas and deep-water drilling. At today’s price, Chevron yields slightly more than 3 percent. Since 2004, its dividend has risen about 120 percent. The stock has risen similarly. The company has consistently shown a willingness and ability to raise dividends. We can expect higher dividends in the future because cash flow should rise from $40 billion to $50 billion over the next decade.

Abbott Labs provides another example. In August 2004, the stock traded for approximately $39, with a dividend of $1.04. In January 2013, Abbott Labs did a spinoff, creating two companies, Abbott Labs and AbbVie. The combined value of both companies is slightly above $80. The combined dividend is $2.16. Since my friend’s original purchase, the dividend has increased 208 percent, and shares of Abbott and AbbVie have appreciated 203 percent.

Let me add a word of caution. One cannot expect a stock to keep up with its dividend if investors worry about a company’s ability to maintain its payout. Also, if the dividend is below 2 percent, investors are evaluating a stock more on its growth prospects than its payout. Once a company starts paying close to 3 percent, however, some 1 percent more than the 10-year Treasury currently, the stock price has considerable “staying power.”

Standard & Poor’s has created an index called S&P Dividend Aristocrats that measures the performance of companies that have increased their dividends every year for the last 25 years — an enviable record in these tumultuous times.

Over the long term, equities have outperformed bonds. Companies paying dividends have provided greater rates of return than equities not paying dividends. Depending upon the period, dividends represent between 40 to 50 percent of a stock’s annual return.

Benjamin Graham, an influence for Warren Buffett, said, “In the short-term, the market is a voting machine, while in the long-term it’s a weighing machine.”

Put another way: Do not worry about daily price fluctuations; over time, stocks in companies with strong business fundamentals will protect their investors.

Originally published in the Sarasota Herald-Tribune