My
dividend Yield on Costs on the acquired stock positions stands at 3.9 %, adding USD 140 to my projected annual dividend income.
The former numerical target of achieving 10 %
yield on cost in 10 years has been dropped.
The numerical target is for the portfolio to deliver 10 percent
yield on cost within 10 years of inception.
After holding for three years I realized that my other dividend growth investments had a
higher yield on cost and the difference was only going to get greater as time went on.
As I stated earlier, the principal goal for this portfolio is to create a dividend stream that grows to 10 %
yield on cost after 10 years.
Please note that the facts that I have a big gain or
large yield on cost do not enter into the question.
Investment returns are expressed in annual terms,
while yield on cost is a completely different measurement that doesn't consider how long an investment has been held.
That is another step on the road to meeting the portfolio's goal of achieving 10 %
yield on cost within 10 years from when I began the portfolio in 2008.
Financial fundamentals are pretty sound and I've been more than pleased to enter into that interesting position, offering me a forward dividend
yield on cost of well above 5.5 %.
My initial
yield on cost for this dividend portfolio was 3.54 % and my expected annual income was $ 951.80 (before raises — see below).
I don't for a moment think TLS will be a 10 - bagger but if it grows steadily, it will provide a good dividend
yield on cost with some decent price appreciation.
That allows me to make some projections regarding organic dividend growth and my
expected Yield on Cost (YoC) in 2017 regarding these positions which I sumarised in the chart above.
As you can see in the chart above, December's purchases resulted in a total increase of $ 8.27 to my forward 12 - month dividends and carried an overall
average yield on cost of 2.18 %.
For example, if you had bought Wal - Mart (WMT) in April 1990, your
current yield on cost would be about 19 %.
Growing dividends over time incrementally
increases yield on cost, and for the dividend growth investor, Enbridge's growth prospects are unique.
With Heineken you don't get a high dividend
yield on costs when you enter into the position, neither strong annual dividend growth.
But when the current yield is a paltry 0.7 %, it takes a lot of growth to even get to a
decent yield on cost.
Unfortunately my portfolio
yield on cost decreased from 3.18 % to 3.08 % but again, dividend growth should bring it right back up very soon.
This purchase brings my Dividend Retirement portfolio
yield on cost down to 3.17 % from 3.25 %.
A 4 % or 5 % yield is great but I think 10 - 15 years down the road my
AAPL yield on cost will far exceed any utility stock I buy today.
Gurufocus also calculates the 5 -
year yield on cost of BMY and JNJ at 3.77 % and 4.18 %, respectively.
The equation becomes this:
Yield on Cost = 12 Months» Dividends / Original Price.
I think I've made my point above that the average cost basis must include reinvested dividends, so by definition the «purchased shares» method more accurately
measures yield on cost.
On the plus side, if you are reinvesting dividends, the number of years to hit your
target yield on cost will be reduced.
In this lesson, I am going to
use yield on cost to show you how you can achieve a wonderful goal: To receive, each year, in dividends alone, an amount of cash that equals the market's long - term average annual total return.
Maybe in the long term (20/30 years) investing in blue chips companies will offer a better
yield on cost without any work, but in the first years, rental investing could boost your income and let you financially independent earlier that expected.
One approach to screening for dividend growth stocks involves calculating a
future yield on cost, or YOC, based on a stock's current yield and its past DGR (often the 5 - or 10 - year DGR).
To calculate
yield on cost for a stock, an investor must divide the stock's annual dividend by the average cost basis per share and multiple the resulting number by 100 (to arrive at a percentage).
Phrases with «yield on cost»