Companies with capacity to
grow dividends in the future are not always those that have done it in the past.
Dividend cutters and eliminators can not be counted on to
grow their dividends in the future.
By looking at the past results of a company you can begin to get a reasonable feel for whether it is a high quality company, more likely to keep paying
a growing dividend in the future, or perhaps a company of slightly lesser quality.
Not exact matches
Remember what Irving Fisher told us
in The Debt - Deflation Theory of Great Depressions: The public psychology of going into debt for gain passes through several more or less distinct phases: (a) the lure of big prospective
dividends or gains
in income
in the remote
future; (b) the hope of selling at a profit, and realizing a capital gain
in the immediate
future; (c) the vogue of reckless promotions, taking advantage of the habituation of the public to great expectations; (d) the development of downright fraud, imposing on a public which had
grown credulous and gullible.
The model has unmatched functionality, allowing the user to factor
in not only a company's near and long - term
dividend growth rate but also the quarterly reinvestment of
growing dividends at a
future expected stock price.
While the
future is yet to be known, I remain confident on Dominion's ability to
grow earnings,
dividends and to remain a progressive utility company
in North America.
For example,
in an ideal world, a stock that earns E, pays a proportion d of that out
in dividends, reinvests the rest to
grow at a perfectly constant rate g, and is expected to stay
in business into the indefinite
future, should have a P / E ratio of d / (k - g) where k is the desired long term rate of return (say 0.10 or 10 %) that the stock should be priced to deliver.
From this information, I estimate how much the
dividend will
grow on an annual basis
in the
future.
Logistically speaking, management only gets to use $ 0.23 on the dollar to buy back stock, pay down debt, and
grow the company so that it can make even larger
dividend payments
in the
future.
While these companies do not have the long history of paying and
growing their
dividend like the stalwarts, they do have a strong market position and the cash flow to become a stalwart
in the
future.
Our way of doing this is by selecting stocks that have a good record of
dividend growth, and can continue to
grow earnings
in the
future.
We believe companies that initiate or consistently
grow their
dividends display confidence
in the
future health of their companies and a commitment to their shareholders.
We expect this trend to reverse
in the
future — Cardinal Health's
dividend growth rate has the potential to accelerate, especially if the company's earnings continue to
grow at the rate we anticipate.
Dividend growth stocks are able to invest
in future growth and
grow their business — and their
dividends — over time.
Earnings growth could remain
in the mid-single digit range for the foreseeable
future, but the
dividend has lots of room to
grow relative to free cash flow.
Over the past week, the following companies — each of which have
grown their
dividend every year for at least the past five years
in a row — made important announcements regarding their
future dividend payments.
That
in turn should allow it to continue
growing the
dividend around 10 % a year for the foreseeable
future.
That
in turn allows it to borrow very cheaply (average interest rate 3.6 %), which, along with its massive cash position, allows it to not only continue
growing the
dividend, but also invest
in future growth by acquiring new asset managers
in other countries and industries (such as K2 Securities to get into hedge funds).
From this information, I estimate how much the
dividend will
grow on an annual basis
in the
future.
If VOD isn't able to
grow its business
in the
future it may hit a point where the
dividend becomes unsustainable.
So the price looks attractive and the
dividend has plenty of room to
grow in the
future.
With an energy
future that appears to be heavily reliant on natural gas, a massive highway of pipelines for said transportation, and long - term commercial agreements
in place that limit fluctuations to cash flow, Enbridge is «locked and loaded» for paying big, reliable, and
growing dividends.
OK, 1,5 % yield is not the strategy of an
dividend growth investor, but Apple will
grow the
dividend in the neaar
future.
I know that we may not get similar return
in the
future, but I am so confident that we can get a solid passive
growing dividend income from my investment.
Dividend - based strategies typically produce an income stream that lasts throughout the foreseeable
future and that
grows in buying power.
Dividends4Life presents 16
Dividend Stocks
Growing Future Yield posted at
Dividends Value, saying, «
In the southern U.S. where I live, there has been some controversy over harvesting forests of hardwoods and reseeding them with pines.
Let's use the above example, where it was calculated that a company paying $ 1.80
in dividends per share this year and
growing that
dividend by an average of 5 % per year into the
future, with a discount rate of 12 %, is worth $ 27 / share.
On the other hand Vodafone, a company with a very good track record of
growing dividends year after year, has a yield of 5.2 % today and is therefore less reliant on spectacular
dividend growth
in the
future (although it may still produce it).