But in order to have a better idea of what
kind of dividend growth to expect moving forward, we must first know what kind of underlying growth the company is generating.
Now, I wouldn't expect
that kind of dividend growth to continue indefinitely, but strong underlying business growth should continue to fuel double - digit annual raises for the foreseeable future.
When a company has
that kind of dividend growth track record it's worth a second look.
While I wouldn't expect
that kind of dividend growth to continue on for the foreseeable future, as much of this growth was propelled by a growing payout ratio, the current payout ratio of 45.3 % still leaves a lot of room for continued dividend increases, even increases that exceed the rate of underlying profit growth for the next few years.
Now, one can't expect
that kind of dividend growth to continue indefinitely, which is why you'd expect to see growth deceleration.
That kind of dividend growth won't continue forever.
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.
Now, I wouldn't expect
that kind of dividend growth to continue indefinitely, but strong underlying business growth should continue to fuel double - digit annual raises for the foreseeable future.
Not exact matches
That's because there's a margin
of safety, or a buffer, that's often built right in when you buy a
dividend growth stock that's undervalued, as that favorable gap between price and value also means there's less
of a possibility that the stock becomes worth less than you paid through some
kind of negative event (corporate malfeasance, investor mistake, etc.).
I think this is more than reasonable for AT&T — and this
kind of platform would allow for like
dividend growth moving forward.
And in order to get a feel for what
kind of future
dividend growth to expect, we must first build an expectation
of underlying business
growth.
To many
dividend growth investors, that
kind of market reaction (or over-reaction) to a high quality company's short - term financial results can create a buying opportunity.
Dividend growth investing is my whole strategy so it is
kind of pointless to hold shares in a company that doesn't pay
dividends.
This
kind of «buy and hold» strategy, coupled with an elite
dividend growth stock like Hormel, could set you up for decades
of safe, steadily - growing passive income.
I see Apple as a fantastic
dividend growth stock moving forward, especially if there is any
kind of repatriation tax reform after the US presidential election.
If a company aims to sustain
dividend growth over the years and decades, then the business needs to be strong enough to generate consistently growing cash flows under all
kinds of conditions.
In order to really build that future
dividend growth expectation, though, we must look at what
kind of underlying business
growth the company is generating.
To many
dividend growth investors, that
kind of market reaction (or over-reaction) to a high quality company's short - term financial results can create a buying opportunity.
But that is the
kind of result that you can generate «passively» from
dividend growth investing.
I think this is more than reasonable for AT&T — and this
kind of platform would allow for like
dividend growth moving forward.
Typically, using a
dividend yield combined with the EPS
growth rate will give you an idea
of what
kind of returns you'll be seeing, assuming the valuation
of your holding stays relatively static.
Therefore if two stocks, Canadian and International, both produce 7 % total
growth (all
kinds of it:
dividends, capital gain etc.), would not you be better with the Canadian one anyway, as the International will be taxed in another country?
Notes starting January 14, 2007 Notes starting February 26, 2007 covered the following topics: Simple Path to 5 %, Why It Works, Flaws in the Traditional Theory, A Special
Kind of Investment,
Dividend Baseline: Expanded, Fluctuating
Dividends, Fluctuating
Dividends with a
Growth Kicker, Income Stream Insights, A Special
Kind of Investment Sensitivity Study, A Special
Kind of Investment Addendum, Diversifying Risk, TIPS Table, How Did Common - Sense Investing Become Controversial?
Blending the known past and estimated future in this fashion should allow us to home in on what
kind of overall business
growth Realty Income is capable
of, which should more or less translate into
dividend growth.
Blending the known past and estimated future in this manner should give us a pretty good idea as to what
kind of overall business and
dividend growth Enbridge is capable
of.
Simple Path to 5 %, Why It Works, A Special
Kind of Investment,
Dividend Baseline: Expanded, Fluctuating
Dividends, Fluctuating
Dividends with a
Growth Kicker, Income Stream Insights, A Special
Kind of Investment Sensitivity Study, A Special
Kind of Investment Addendum, Subtle Observation about
Dividend Capture,
Dividend Blend Rule
of Thumb,
Dividend Growth and Bond Ladders,
Dividend Growth Rule
of Thumb,
Dividend Growth Story; Sometimes
Dividends Get Cut;
Dividend Disaster;
Dividend Quality.
However, it's getting very difficult to find attractively valued blue - chips that can provide that
kind of income while simultaneously offering Read more about Eaton Corporation A High - Yield
Dividend Growth Opportunity -LSB-...]
Yes, I was particularily pleased by the organic
growth which is tremendously important as one day, I want my portfolio to be
kind of «self - propelling» which means that it should grow «organically» and through
dividend reinvestments and not require additional funds (savings) from my side.
It is true that many
dividend paying stocks don't experience the
kind of short - term returns that you can see with
growth stocks, but in many cases a
dividend paying investment is one that is solid, offering regular profits.
It seems prudent to move toward slowing the
growth of greenhouse emissions, though a carbon tax, as professor Yohe suggested, would be preferable to any
kind of cap - and - trade or cap - and -
dividend system.