In the world of ultra-low interest rates in which we find ourselves today, many investors are drawn to dividend stocks that offer above-average yields. But dividend yields are only half the story, and the future rate of dividend growth is equally important. If the goal is to build a stream of dividend income then a balance needs to be found between yield and growth that gives investors the best results.
Walgreen (WAG) has a yield of 2.25%,General Electric (GE) has a yield of 3.25%, and Intel (INTC) has a yield of 4.15%, for example. But how do you determine what kind of dividend growth is necessary, given the yield? There are two avenues to dividend growth: the company actually increasing the dividend and the investor reinvesting that dividend. By taking advantage of the latter an investor can greatly reduce the minimum dividend growth rate needed to reach their goals, especially with higher-yielding stocks like Intel. The method used there was different than here, and it also didn't take into account reinvested dividends. Both calculations are rough, and different goals will change the numbers, so neither are to be taken as gospel. But this method clearly shows the benefits of reinvesting dividends, which can give a real boost to any dividend growth portfolio.
Source: Seeking Alpha
Related Articles:
- 12 Dividend Stocks With A Quick Payback
- 9 High-Rated Dividend Stocks With Above Target Returns
- 9 High-Yielding Utilities With A Growing Dividends
- 3 Styles Of Successful Dividend Investing
- 8 Higher-Yielding Financial Services Stocks With Rising Dividends
Stocks To Strike A Balance Between Dividend And Growth
Posted by D4L | Tuesday, June 10, 2014 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
~
Popular Posts Last 30 Days
-
If you're worried about inflation rearing its ugly head next year, you should probably worry about more likely catastrophes, such as bei...
-
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...
-
When a company pays a dividend, it's a good thing for shareholders. When a company consistently pays a dividend every quarter, it's ...
-
We screened our 24/7 Wall St. dividend equity research database and found 5 stocks that combined can generate over $3,000 of annual passive ...
-
The stock market has been on an upward path of late, with some of the most prominent stocks hitting astronomical highs. The dividend yield o...
-
My top financial goal is to eventually become financially independent. The foundation of my strategy is to make investments that produce an ...
-
Dividend growth stocks can be incredibly attractive investments if you crave recurring income. As these types of stocks raise their dividend...
-
In my opinion, there are three criteria investors should consider when evaluating a particular stock for their portfolio. The first is histo...
-
In this article, we discuss 5 best March dividend stocks to buy. If you want to read our detailed analysis of dividend capture strategy and ...
-
Double your money in a short time. Few investors would walk away from such an opportunity. Of course, there's no guarantee that any inve...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.