Dividend investing is a strategy that focuses on generating gains from dividend income, rather than capital growth. Historically, dividend payouts were a primary motivation for investors (Wharton School of Business professor Jeremy Siegel has pointed out that over 90% of the gain of the Dow since 1900 has been from reinvested dividends), but this mode of investing largely fell out of favour during the 1982-1999 bull market, as company valuations rose dramatically for such a sustained period.
Contrary to conventional wisdom, a Standard & Poor's study has shown that dividend-paying stocks actually do better in the long run in terms of total returns (price appreciation plus dividend income) - payers outdistanced nonpayers by 1.9 percentage points annually from 1980 through 2003. A study by David Dreman - in collaboration with Vladimira Ilieva of the Institute of Psychology & Markets – has also looked at a broader universe of equities, the 1,500 of the largest companies trading in U.S. markets. From 1970 through 2003, the top fifth of the payers had an annual 14.5% total return vs. 8.8% for the lowest yielding group.
Source: Stockopedia
Related Articles:
- Where To Find Great Dividend Stocks
- 8 Dividend Stocks With Above Market Performance
- 7 Dividend Stocks For The Ultimate In Deferred Gratification
- Finding Low Risk Dividend Stocks
- Why We Are Dividend Growth Investors
Is Income Investing Superior To Growth Investing?
Posted by D4L | Saturday, July 23, 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...
-
The best dividend stocks have one thing in common: resiliency. They can continue increasing their dividends even in the harshest economic en...
-
Investors wanting to enjoy steady and consistent income should consider dividend aristocrats. In fact, even in these chaotic times, dividend...
-
Dividends and diversification -- those two things can help you achieve a comfortable retirement when combined with the income you will recei...
-
Higher dividend yields often imply that the underlying company paying the dividend has a higher risk profile. However, that's not always...
-
It's hard to beat a sustainable, high-yield dividend paired with a beaten-down valuation. The best dividend stocks offer high yields and...
-
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...
-
Today we'll talk dividend deals. Big payers. Stocks yielding up to 10.3% and trading for as little as three-times free cash flow (FCF). ...
-
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 ...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.