The majority of my extra income each month has been put right back
into dividend growth companies.
Not exact matches
Our definition of
Dividend Growth investing focuses on the long term profitability of a
company and applies extensive testing to ensure profits and
dividends will continue to grow
into the future.
Companies in mature industries like consumer staples and utilities have fewer
growth opportunities so they can share cash flow with investors through
dividends rather than plow it all back
into projects.
They don't just list the
companies but also order them
into the categories and add some very useful values like
dividend growth rate, yield or payout ratio.
The disadvantage is that since the
dividend growth rate already takes
into account
company growth and share repurchases, the
growth rate will be fairly high, so we'll have to use a fairly high discount rate, and so it's very sensitive to the inputs.
The Elk Valley Coal Partnership puts Teck, a
company that reinvests revenue
into growth, at odds with the
dividend - hungry Ontario Teachers» Pension Plan.
But a look at a
company's retained earnings can help us get a handle on what kind of
dividend growth to expect going forward
into the future.
I ended up selling PBCT in 2015 and re-investing
into companies with much more
dividend growth potential.
PJC.A currently falls
into the latter category as I expect the
company to deliver double digit
dividend growth for years to come.
Of course, any additional passive income I receive I will invest
into the best
dividend growth companies to ensure I'm participating in compound interest.
They don't just list the
companies but also order them
into the categories and add some very useful values like
dividend growth rate, yield or payout ratio.
Most of this income
growth is attributed to my continuous contributions
into dividend paying
companies every month.
To what extent do you view your investing life as an extension of your personal life?By that I mean to what extent do the personal morals and ethical values of Tim the man govern the investing decisions of Tim the
dividend growth investor?If you ask your typical
dividend growth investor if they would be willing to invest in a lucrative but immoral venture, say selling child pornography or crack cocaine, the answer would probably be «absolutely not» regardless of the yield, valuation or
growth prospects of the underlying venture.And yet, ask that same investor what their thoughts are about Phillip Morris and they would probably describe what a wonderful investment it is and go on about why you should own it.Do your personal morals ever come
into play when buying
companies, or do you compartmentalize your conscience, wall it off from the part of your brain that thinks about investments, and make your investing decisions based on the financial prospects of the company?The reason why I'm asking is that I keep identifying stocks of
companies that I love from an investing perspective but despise on a human level.I can not in good conscience own any piece of Phillip Morris knowing the impact that smoking related illness has on the families of smokers.You might say that the smoker made his choice to smoke so you don't mind taking his money, but his children never made that choice and they are the ones who will suffer when he dies 20 years too soon.
Imagine the earnings capability if that
company continues that
dividend growth rate
into perpetuity.
Company XYZ, on the other hand, decides to issue no
dividends and reinvest all of its earnings
into capital gains, thereby raising XYZ's value to $ 1.1 billion, likely appeasing its
growth investors.
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.
These ratios provide insight
into the safety and potential
growth of a
company's
dividend.
To summarize, I plan on creating a diversified portfolio of
dividend growth stocks, by slowly dollar cost averaging my way
into attractively valued quality
companies over time.
You may have read some debate on
dividend growth blogs over whether to reinvest
dividends into a
company or to pool funds and buy shares of another
company.
On the other hand, the fact that a stock featured in 2015 can make it
into a new
dividend growth portfolio launched in 2017 indicates how steady and dependable some of these
companies are.
For the most part,
companies only start paying
dividends when the very fast phase of their
growth matures
into moderate or slower
growth rates.
This translates
into investors getting paid 100 % of net earnings as
dividends and somewhat predictable
dividend growth, since the parent
company is slowly getting a little bigger each year.
BUT if i stopped working it would save me money and IF that 1 million was not taxed it could be put
into good
dividend paying
companies with «
growth potential» and the
dividend tax's are far cheaper.
For future
growth,
companies must re-invest at least 40 % of earnings back
into the
company to be considered a
dividend growth company and at least 10 % of earnings back
into the
company to be considered a sustainable
dividend company.
I would have liked to buy even cheaper, but I felt after the significant drop in share price I would enter
into an ownership position with a high quality healthcare
company that is paying a healthy
dividend and shows great potential for
growth going forward.
However, the
company has continued to produce solid earnings and has since morphed
into an attractively - valued
dividend growth stock.
A
company's existing
dividend growth streak is a track record that gives insight
into its ability and intention to continue raising the
dividend each year.
This allows a
company to pay handsome
dividends, reward shareholders with buybacks AND / OR reinvest the money back
into the business for
growth.
The
Dividend Analyzer breaks down
company metrics
into Dividend Safety, Profitability &
Growth, and Valuation Scores.
But there's been a reach for income lately, so investors have bid up the prices of certain
companies that pay
dividends, driving them
into the
growth quadrant.
Still doesn't take away from the great value offered by the platform for investing steadily, and at no - cost,
into some great
dividend growth companies.
In general, more established
companies tend to pay
dividends, and these
companies may not have as much
growth potential as newer
companies that plow all of their earnings back
into the
company.