Dividends4Life: The Case For Dividend Growth Stocks

The Case For Dividend Growth Stocks

Posted by D4L | Friday, March 16, 2012 | | 2 comments »

dividend growth investing is a new strategy. Stock dividends have attracted a lot of attention in the past few months, because in the current low interest rate environment, it appears that some investors have turned to dividend stocks for higher yields. But stock investing based upon receiving and reinvesting dividends is an approach that has been around forever. In many families it is multi-generational.

The dividend growth strategy is about a lot more than high yields. It involves careful stock picking based on a variety of criteria. Some of the qualities of the best dividend growth stocks are great companies with superior business models and moats; managed dividend policies that lead to higher dividend payouts annually; yields that are “high enough”; and good valuations. It is hard to overstate the importance of reliable dividend growth as a component in the strategy.

Source: Seeking Alpha

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2 comments

  1. Investing Blog // March 17, 2012 at 12:28 PM

    Investors have to be careful when talking about dividends and growth in the same sentence. Although these two can co-exist it may be problematic for growth stocks to be offering a dividend when that money can be used to reinvest in the company for greater growth.

    Right now it seems Apple is the big question mark for a dividend and growth. Should Apple offer a dividend for investors or should it keep using that money to grow? Does it have more than enough already?

  2. D4L // March 17, 2012 at 12:47 PM

    Investing Blog: When referencing Dividend Growth Stocks, the "Growth" portion is referring to the dividend (e.g. increasing the dividend each year).

    Best Wishes,
    D4L

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