Dividends4Life: The ABCs Of Dividend Investing

The ABCs Of Dividend Investing

Posted by D4L | Friday, August 30, 2013 | | 0 comments »

To many people, we are known as "The Dividend Guys." To those who know us best, we're known as the "Rising Dividend Guys." We were given those nicknames because we have been running our Rising Dividend strategy for nearly 20 years and now have nearly $600 million invested almost exclusively in dividend-paying stocks. The world, economy, and securities markets have seen a lot of changes over the past 20 years. We imagine some folks are wondering why we haven't changed our strategy along with them. They may wonder if we are a "one trick pony".

We believe the dividend is the best indicator of value because dividend payments are made in cash. Cash is cash and once paid cannot be later changed or taken back, as earnings can. In addition, cash dividend payments are not derived through financial engineering, but are set by the people who should know a company best -- the board of directors. If we were to reduce everything we have said so far into one sentence, it would be this: The total return of a stock over a five to ten year period will likely be close to the sum of its current dividend yield plus its projected dividend growth, adjusted slightly by changes in interest rates.

Source: Seeking Alpha

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