Dividends4Life: Stocks With Sustainable Dividend Growth (DIV)

Stocks With Sustainable Dividend Growth (DIV)

Posted by D4L | Tuesday, August 17, 2010 | | 0 comments »

In the past we have looked at the importance of a company’s ability to sustain its dividend. However, as an investor in dividend growth stocks, it is not enough to simply sustain the dividend – I want to own companies that are capable of sustained dividend growth. Needless to say, this is a little more difficult to evaluate, but here are few important things to consider…

Needless, to say before buying you must consider the future prospects for each company and determine if the growth rates are sustainable in the future. As with yield, dividend growth carries its own risk. If the rate is too high, the company will have a hard time maintaining it going forward. If the rate is too low, it will not keep up with inflation and the shareholder will lose purchasing power.

Source: Dividends Value

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