Last time we showed research that revealed that dividend-paying stocks have outperformed non dividend-paying stocks over the last three years. Importantly, the research also showed that the higher the dividend growth of a stock, the higher its total rate of return, up to a point. We have previously offered research showing that among dividend paying stocks that dividend growth is the best indicator of long-term price growth. Thus, companies that are producing high dividend growth and not being rewarded with high price appreciation are of particular interest to us. Our experience has taught us that these kinds of companies will at some point have a price growth spurt that will close the performance gap.
Let us give you an example of what we mean by this: Becton Dickinson (BDX) has hiked its dividend by an average of nearly 15% per year. During this time, its stock price has risen by only about 5% per annum. Of course this has been a time when almost all health-care stocks have underperformed the market. However, the difference between BDX and it brethren in the sector are stark. BDX has not only produced dividends and earnings growth much higher than the average stock in the health-care sector, but it has also enjoyed higher dividend and earnings growth than the average stock in the S&P 500. Yet this strong fundamental performance has produced sub-par price gains.
Source: Rising Dividend Investing
Related Articles:
A Dividend Star with a Lagging Price
Posted by D4L | Saturday, December 04, 2010 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
~
Popular Posts Last 30 Days
-
The silver lining of the market sell-off in 2022 is that it has created plenty of dirt cheap dividend stocks that investors can buy now and ...
-
The S&P 500 recently fell into a bear market, defined as a 20% year-to-date drop, which has ramifications for dividend stocks. The good ...
-
Rising interest rates are good for banks because it allows them to charge more for lending services. However, if those higher rates squash h...
-
Through wars and recessions, terrorist attacks and pandemics, dividend stocks as a category have always generated positive returns, even dur...
-
Looking to take advantage of supply chain disruptions and inflation? With Europe shifting from Russian energy supplies, there has been a lot...
-
Many companies will see their interest expenses rise, but the ones whose management was savvy enough to lock in debt at fixed rates should d...
-
How long do you think the average stock gets held? Not very long, it turns out. Reuters calculated in June 2020 that the average holding per...
-
You can work for money. But you can also have your money work for you. One great way to make passive income is to invest in dividend stocks....
-
Stocks generally will offer the best cushion against inflation, especially the reliable high-yield dividend payers. First, stocks have a lon...
-
Earlier we looked at the RQ (Risk/Quality) ratings of individual stocks. This was a good start to help us understand the risk profile of a ...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.