Note that with a 2 % initial yield, you can not get to 10 by 10 under any reasonable
dividend growth scenario.
Not exact matches
In a fairly poor
scenario, even if only a 5.7 % long - term EPS /
dividend growth rate is achieved (chosen to match the previous 7 - year average EPS
growth), then the current price in the low $ 80's can still offer a 9 % long - term rate of return, based on the DDM again.
Above example could be really childish and improbable
scenario but just a random
scenario to learn about
growth vs
dividend options.
Now I sit in a
scenario that all
dividend growth investors face at one time or another.
There are some terminologies that one should be aware of before venturing into the world of
dividend growth investment so that they are in a better position to understand the whole
scenario.
The yields on mortgage REITs are attractive — MORT yields just under 10 % — but it is not realistic to expect much in the way of
dividend growth going forward, and
dividend shrinkage might actually be the more likely
scenario.
As a general
scenario, most of the PSUs, utility company etc give high
dividends to their shareholders and belong to a slow
growth / saturated industry.
The other
scenario will be our expense coverage with
dividend growth, DRIP and new cash investment.
The real -
dividend - per - share
growth difference was a whopping 9.3 % lower (i.e., 6.3 % under the positive / positive
scenario and the negative 3.0 % under the positive / negative
scenario) than its average in the more usual case of both prior market return and subsequent
dividend growth being positive.
If this
scenario plays out, this could negatively impact AT&T's share price and stall out any future
dividend growth for quite some time.