Dividends4Life: Using The 10 x 10 Table To 'Score' Dividend Yields

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Using The 10 x 10 Table To 'Score' Dividend Yields

Posted by D4L | Wednesday, November 23, 2011 | | 0 comments »

Some of you are familiar with the 10 x 10 concept. It is a table that answers the question, “What beginning yield and what dividend growth rate do I need to achieve a 10% yield on cost within 10 years?” A recent article on it can be found here: “10 by 10: The Interaction of Dividend Yield and Growth.” Obviously, various combinations of yield and DGR can achieve the 10 x 10 goal. The table lets you select a dividend and a growth rate. Where they intersect, it tells you the year in which they will achieve a 10% yield on cost.

It is unfortunate that dividend-growth investors have in some corners been labeled as interested only in yields and historical growth rates while being blind to other factors that go into complete stock analysis and due diligence. So let me emphasize that while this table is focused on those two factors, there are many other elements involved in evaluating dividend-growth stocks. The table is only one element in creating a complete analytical picture. I use about 20 factors to rate each company and then another 9 to value each candidate. The dividend-growth strategy is about much more than yields and growth rates. It’s not brain surgery, but when done right it is a thorough process. So the usual boilerplate applies: Do your own due diligence before investing in anything.

Source: Seeking Alpha

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