As of this morning, the S&P 500 is up over 13%, including dividends, for 2010. This performance is significantly above long-term average returns, and remarkable when considering all of the headwinds that the markets faced in 2010. These impressive results are largely due to the exceptional growth in corporate earnings, which will increase nearly 47% over 2009. Of course, the above average growth in both stock prices and corporate earnings came after exceptionally low earnings and market prices in 2008 & 2009.
This is where our dividend investing philosophy should serve us well. As we have said before dividends fill two important roles for us. 1) They are real cash and have represented over 40% of the total returns of stocks since 1926; 2) Companies that pay a consistently rising dividend can be more accurately valued than non-dividend payers or irregular dividend payers. Our dividend valuation models give us a ballpark idea of the “fair value” of a company at any point in time. In our minds, as stocks continue to march higher, our models will be very helpful in assisting us in knowing when the fair value line has been crossed.
Source: Rising Dividend Investing
Related Articles:
Rising Tide May Keep Rising
Posted by D4L | Thursday, January 06, 2011 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
~
Popular Posts Last 30 Days
-
As a relatively new blogger, the one thing that has stood out in my mind is the number of Canadian bloggers in the areas that I am most inte...
-
Investors wanting to enjoy steady and consistent income should consider dividend aristocrats. In fact, even in these chaotic times, dividend...
-
A select group of monthly dividend stocks pays dividends at a rate of 10% or higher. Those are the ones on this list. Investors should be aw...
-
Higher dividend yields often imply that the underlying company paying the dividend has a higher risk profile. However, that's not always...
-
Dividends and diversification -- those two things can help you achieve a comfortable retirement when combined with the income you will recei...
-
It's hard to beat a sustainable, high-yield dividend paired with a beaten-down valuation. The best dividend stocks offer high yields and...
-
How high is too high when it comes to dividend stocks? Of course, every income investor wants as much yield as possible. However, they also ...
-
When hunting for discounted investments, one excellent starting point is to look for businesses with dividend yields trading above their fiv...
-
Strange but true: seniors fear death less than running out of money in retirement. And unfortunately, even retirees who have built a nest eg...
-
While there’s nothing quite as exciting as betting everything on a hot growth enterprise, prudent investors may want to consider the best di...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.