Dividends4Life: Dividend investing more than chasing yields

Dividend investing more than chasing yields

Posted by D4L | Tuesday, September 14, 2010 | | 0 comments »

Google “dividend investor” and you’ll see immediately a sponsored link from consumer goods giant Proctor & Gamble Inc. that reads: Uninterrupted dividends since 1890. 53 straight years of increases. That’s one enviable track record and no doubt an effective advertising slogan. But even more than that, it is a sobering reminder to today’s yield-hungry investors that not all dividend stocks are created equal.

“It’s just not enough to look at the current yield,” said Robert Floyd, lead manager at R.A. Floyd Capital Management Inc. in Mississauga. “You also need to look at the potential growth of the dividend down the line. That means looking at the balance sheet, the cash flow, the debt load of the underlying company and assessing any other concerns that might restrict its ability to pay out down the line.”

Source: Financial Post

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