Investment Return = initial dividend yield
+ dividend growth rate (annualized).
The basic form of the Dividend Discount Model is: the investment return = the initial dividend yield
+ the dividend growth rate.
This leads us to the following equation: 6.5 % = -LSB-(today's P / E10) / 13.8] * today's dividend yield
+ dividend growth rate.
Looking at the Dividend Discount Model and its variants: Investment Return = Dividend Yield
+ Dividend Growth Rate.
The Investment Return = Initial Dividend Yield
+ Dividend Growth Rate (annualized, nominal)-- Inflation = 4 % +5 % -3 % = 6 %.
Not exact matches
[For mathematically inclined clients, a simplistic, but useful way to see this is to examine the
dividend discount model: Price = Dividend / (k - g) where g is the long - term growth rate of dividends and k is the long - term return required by investors, written as the sum of the risk free rate and a risk premium (k =
dividend discount model: Price =
Dividend / (k - g) where g is the long - term growth rate of dividends and k is the long - term return required by investors, written as the sum of the risk free rate and a risk premium (k =
Dividend / (k - g) where g is the long - term
growth rate of
dividends and k is the long - term return required by investors, written as the sum of the risk free
rate and a risk premium (k = Rf
+ z).
John Bogle of Vanguard defines the Investment Return of the stock market as its
dividend yield
+ earnings
growth rate (using the S&P 500 composite).
John Bogle's modified version of the Gordon Equation (or the
Dividend Discount Model) is that the total return from stocks equals the investment return plus the speculative return, where Investment Return =
Dividend Yield
+ Earnings
Growth Rate and Speculative Return = the change in the price to earnings ratio over the period examined.
Altria's 7 % to 9 % target earnings - per - share
growth rate combined with its 4 %
+ dividend yield gives investors expected total returns of 11 % to 13 % a year.
• Fast
dividend growth rate at 20 %
+ over the past several years (offset by low yield).
While I'm not sure if a 50
+ %
dividend growth rate is sustainable, VLO is certainly in a good position to continue their
dividend increases.
S&P then divides stocks into a quality category matrix,
rating each stock from A
+ to D, basing
ratings upon each individual company's
growth and stability of earnings and
dividends.
The formula for the real income of an investment at year N is: Inflation adjusted
dividend income = (initial
dividend amount) * -LCB-[1
+ (nominal
dividend growth rate)-RSB- ^ N -RCB- / -LCB-[1
+ (inflation
rate)-RSB- ^ N -RCB- Typically, you would use a nominal
dividend growth rate of 5.5 % per year in the absence of other information and 3 % per year inflation.
The Investment Return equals (0.6 * the initial
dividend yield of Stock A
+ 0.4 * [the 2 % real TIPS interest
rate + the 3.0 % inflation
rate]-RRB-
+ (0.6 * the nominal
growth rate of the Stock A
dividends + 0.4 * the
growth rate of TIPS (which equals the 3 % inflation
rate)-- the 3.0 % inflation
rate.
The Gordon Equation is: R = initial
dividend yield
+ the
growth rate of the
dividends.
6) Standard & Poor's
rating of B
+ or better — indicates financial stability and steady
growth of earnings and
dividends.
The Investment Return = the initial
dividend yield
+ the annualized
growth rate of
dividends (i.e.,
dividend amounts).
The scale factors are -LSB-(1
+ nominal
dividend growth rate) / (1
+ inflation)-RSB- ^ N.
At a constant
growth rate, the
dividend amount equals the initial
dividend amount times (1
+ the
growth rate) ^ (the number of years).
The Gordon Equation or some other form of the
Dividend Discount Model tells us what a rational investor would pay for stocks: The Investment Return = the initial dividend yield + the growth rate of di
Dividend Discount Model tells us what a rational investor would pay for stocks: The Investment Return = the initial
dividend yield + the growth rate of di
dividend yield
+ the
growth rate of
dividends.
Professor Shiller's Irrational Exuberance Web Site I determined the real, annualized
dividend growth rate by solving: (1
+ r) ^ N = (real
dividend amount at the end of N years) / (real
dividend amount at the beginning of the period).
Since the nominal
dividend growth rate is 5.5 % and the long term inflation
rate is around 3.5 %, (1
+ real
rate of
growth) = (1.055) / (1.035) = 1.0193 or the real
rate of
growth = 1.93 %.
Monsanto has the 7th highest
growth rate out of 167 businesses with 25
+ years of
dividend payments without a reduction.
His formula for the investment return is: the investment return = the initial
dividend yield
+ the earnings
growth rate.