Dividends4Life: 2 Small Dividend Yields With Big Growth Potential

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2 Small Dividend Yields With Big Growth Potential

Posted by D4L | Thursday, December 10, 2015 | | 0 comments »

It's tempting for investors looking for income to give in to the appeal of high dividend yields. But seasoned income investors know that yield is only one facet of the equation when building a portfolio of good dividend stocks for long-term income generation. Indeed, stocks with unimpressive dividend yields often possess some of the best long-term value for income investors.

Whole Foods (NASDAQ:WFM) and Costco (NASDAQ:COST) are two of these dividend stocks that could easily be looked over. One of the reasons both Whole Foods' and Costco's boards have maintained a low payout ratio is because they believe there is significant room left for business growth. As long as the companies feel strongly about growth potential, dividend payouts will likely remain suppressed. But where Whole Foods and Costco lack in dividend yield, they make up for in fundamentally enduring business models and dividend growth potential.

Source: Motley Fool

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