It is also important to understand which stage
of dividend growth the company is.
Family Dollar Stores is one
of those dividend growth companies you don't hear about too often.
dividend kings are the most elite group
of dividend growth companies.
In this Dividend Growth Stock of the Month (DGSM) series, I have been presenting a variety
of dividend growth companies from different economic sectors, with different yields and growth rates, to give you an idea of the breadth of the field of candidates for dividend growth investing.
While adding up all of the dividends received is nice, one of my other little joys from this activity is actually taking note
of the dividend growth each company produces.
The early days of crypto mining reminds me of a number
of dividend growth companies.
My own philosophy is stated simply: I want to own a «well rounded» portfolio
of dividend growth companies.
It's very rare for me to sell one
of my dividend growth companies.
Not exact matches
The
company's management (for more, see our feature on Costco in the Dec. 15 issue
of Fortune) and history
of earnings
growth earn rapturous reviews from Don Kilbride of Wellington Management, who oversees Vanguard's Dividend Growth Fund: «I could talk forever about Costco.&
growth earn rapturous reviews from Don Kilbride
of Wellington Management, who oversees Vanguard's
Dividend Growth Fund: «I could talk forever about Costco.&
Growth Fund: «I could talk forever about Costco.»
But in a letter sent last month to CEOs
of the S&P 500 and large
companies in Europe, the Middle East, Africa, and Asia Pacific, BlackRock CEO Larry Fink criticized corporate leaders» use
of share buybacks and
dividends when they might be better served by investing in «innovation, skilled workforces or essential capital expenditures necessary to sustain long - term
growth.»
Balanced funds, which usually invest in a mix
of about 60 percent stock to 40 percent bonds,
growth and income funds, or equity income funds that invest in well - established
companies that pay high
dividends, might be appropriate choices for a mid-term portfolio.
A
company increasing its
dividends despite missing profit
growth is due to the cult
of dividend aristocrats originating in the US and obscuring investors» mind.
Second,
dividend growth of profit growing
companies is much more dynamic.
Companies with records
of steadily increasing
dividends usually fared better in the ratings than those in which
dividend growth has been erratic or where
dividend cuts or omissions have occurred.
Dividend Growth Investing is an income strategy
of investing in
companies that have a barrier to entry (large moat) and consistent history
of increasing
dividends by a rate higher than inflation.
- 6
Companies With The Power
of 5/15
Dividend Growth - Searching the World For The Best
Dividend Stocks
To me, the process is simple: If you are contemplating the purchase
of a
company with a high internal
growth rate (which I define as expected
growth north
of 10 % for the next ten year years), and it pays no
dividend or a negligible
dividend, then stuff the investment in a taxable account provided you have already gotten any possible matching from a
company's retirement account.
There are a multitude
of reasons as to why this occurs but it's a powerful enough force that many investors have done quite well for themselves over an investing lifetime by focusing on
dividend stocks, specifically one
of two strategies -
dividend growth, which focuses on acquiring a diversified portfolio
of companies that have raised their
dividends at rates considerably above average and high
dividend yield, which focuses on stocks that offer significantly above - average
dividend yields as measured by the
dividend rate compared to the stock market price.
Dow Jones Canada Select
Growth IndexSM, Dow Jones Canada Select Value IndexSM and Dow Jones Canada Select
Dividend IndexSM are servicemarks
of Dow Jones &
Company, Inc. («Dow Jones») and have been licensed for use for certain purposes pursuant to a license agreement between Dow Jones and BlackRock Institutional Trust
Company, N.A., which has further sublicensed the use
of those servicemarks to BlackRock Asset Management Canada Limited.
All
of the Bellwether strategies are guided by our Investment Committee which seeks to invest in high quality, compelling
companies that have strong balance sheets with proven sustainable earnings and
dividend growth.
Bellwether only invests in high quality, compelling opportunities with
companies that have strong balance sheets, proven sustainable earnings
growth and a track record
of regularly increasing their
dividend or distribution.
Discipline refers to the rigorous quantitative and qualitative methodologies used in the identification and selection
of companies that have: better than average relative valuations; a track record
of dividend growth and a sustainable payout level; and balance sheet strength.
We have two equity strategies: the North American
dividend growth strategy, which can potentially invest in any
company that trades in North America, and the global tactical ETF [exchange - traded fund] strategy, which uses a combination
of exchange - traded funds to provide exposure around the globe.
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 with FCF well in excess
of dividend payments provide higher quality
dividend growth opportunities because we know the firm generates the cash to support the current
dividend as well as a higher
dividend.
Dennis McCain Investing -[December / 2013]- Subscribe to RSS feed I am a
dividend growth investor looking for
companies with a long history
of increases in revenue, earnings and
dividends.
For stocks, it's important to have stocks in your portfolio from a large variety
of companies, including
companies in different sectors or industries, such as consumer staples or materials; from
companies of different sizes, such as large - cap or small - cap stocks; from
companies in different countries and from
companies that either have
growth potential or good
dividend yields.
The
company's transparency and willingness to project
dividend growth like they have is why KMI remains near the top
of my buy list right now.
The majority
of my extra income each month has been put right back into
dividend growth companies.
The purpose
of this screening process will be to identify
companies that have a high expected
dividend growth rate combined with a starting yield that would produce greater returns.
Important factors that may affect the
Company's business and operations and that may cause actual results to differ materially from those in the forward - looking statements include, but are not limited to, increased competition; the
Company's ability to maintain, extend and expand its reputation and brand image; the
Company's ability to differentiate its products from other brands; the consolidation
of retail customers; the
Company's ability to predict, identify and interpret changes in consumer preferences and demand; the
Company's ability to drive revenue
growth in its key product categories, increase its market share, or add products; an impairment
of the carrying value
of goodwill or other indefinite - lived intangible assets; volatility in commodity, energy and other input costs; changes in the
Company's management team or other key personnel; the
Company's inability to realize the anticipated benefits from the
Company's cost savings initiatives; changes in relationships with significant customers and suppliers; execution
of the
Company's international expansion strategy; changes in laws and regulations; legal claims or other regulatory enforcement actions; product recalls or product liability claims; unanticipated business disruptions; failure to successfully integrate the
Company; the
Company's ability to complete or realize the benefits from potential and completed acquisitions, alliances, divestitures or joint ventures; economic and political conditions in the nations in which the
Company operates; the volatility
of capital markets; increased pension, labor and people - related expenses; volatility in the market value
of all or a portion
of the derivatives that the
Company uses; exchange rate fluctuations; disruptions in information technology networks and systems; the
Company's inability to protect intellectual property rights; impacts
of natural events in the locations in which the
Company or its customers, suppliers or regulators operate; the
Company's indebtedness and ability to pay such indebtedness; the
Company's
dividend payments on its Series A Preferred Stock; tax law changes or interpretations; pricing actions; and other factors.
Between 2012 and 2017, royalty
companies had a combined annual
dividend growth rate
of 17 percent.
While the market continues to be volatile I continue to buy shares
of high quality
dividend growth companies.
A
company with a long
dividend growth history is an insurance policy
of sorts because a
company can not really grow
dividend payouts for two decades if there is sweeping fraud taking place (where would a fraudulent
company come up with the money to make the
dividend payments?).
When you review the history
of fraud in corporate America history, it is not the legendary
companies with decades
of dividend growth that fall victim to egomaniacs that engage in corrupt behavior.
With an increased focus on returning to its industrial roots and reducing the size and spinning off portions
of its financial arm the
company looks to be returning to its former
dividend growth blue chip status.
I'm curious though, are there any historical examples or potential reasons you can think
of that a
growth company might choose to pay
dividends rather than investing in R&D or something else?
Important factors that may affect the
Company's business and operations and that may cause actual results to differ materially from those in the forward - looking statements include, but are not limited to, operating in a highly competitive industry; changes in the retail landscape or the loss
of key retail customers; the
Company's ability to maintain, extend and expand its reputation and brand image; the impacts
of the
Company's international operations; the
Company's ability to leverage its brand value; the
Company's ability to predict, identify and interpret changes in consumer preferences and demand; the
Company's ability to drive revenue
growth in its key product categories, increase its market share, or add products; an impairment
of the carrying value
of goodwill or other indefinite - lived intangible assets; volatility in commodity, energy and other input costs; changes in the
Company's management team or other key personnel; the
Company's ability to realize the anticipated benefits from its cost savings initiatives; changes in relationships with significant customers and suppliers; the execution
of the
Company's international expansion strategy; tax law changes or interpretations; legal claims or other regulatory enforcement actions; product recalls or product liability claims; unanticipated business disruptions; the
Company's ability to complete or realize the benefits from potential and completed acquisitions, alliances, divestitures or joint ventures; economic and political conditions in the United States and in various other nations in which we operate; the volatility
of capital markets; increased pension, labor and people - related expenses; volatility in the market value
of all or a portion
of the derivatives we use; exchange rate fluctuations; risks associated with information technology and systems, including service interruptions, misappropriation
of data or breaches
of security; the
Company's ability to protect intellectual property rights; impacts
of natural events in the locations in which we or the
Company's customers, suppliers or regulators operate; the
Company's indebtedness and ability to pay such indebtedness; the
Company's ownership structure; the impact
of future sales
of its common stock in the public markets; the
Company's ability to continue to pay a regular
dividend; changes in laws and regulations; restatements
of the
Company's consolidated financial statements; and other factors.
The first will be organic
growth of my existing portfolio by
companies naturally increasing their
dividends over time.
From July 2016 to the end
of second - quarter 2017, more than 80 percent
of the
companies listed in the S&P 500 declared
dividends, as stable oil prices, low wage
growth and a weaker US currency have all added to the overall corporate profits.
• The
company's rate
of dividend growth each year has been steadily high since the Great Recession ended in 2009.
So far nothing special from any
of the
companies I hold and now I started doubting too if we will get anything one time special
dividend or one time buybacks or anything even
dividend growth has been generally in - line with past years at least for the
companies I hold so far.
Possible explanations for these trends: creation
of many small
growth companies; tax considerations; and, use
of stock repurchases in lieu
of dividends or
dividend increases.
The
company has strong brands, decent diversification, and a long history
of consecutive annual
dividend growth stretching back to the 1970's.
Similarly, if you're a practitioner
of the Valuentum system, I wanted to make sure that you are aware that we also serve income and
dividend growth investors and that our research and analysis evaluates the health and long - term
growth potential
of a
company's
dividend.
Shares
of growth companies may not pay out the
dividend you get from a value stock but you can create your own
dividend by selling a few shares.
Companies that pay
dividends are saying that future
growth is limited so it's better to give at least some
of those profits back to owners so they can find better investments.
That means additional ammo for the
company in terms
of growth, improving the balance sheet, buybacks, and
dividends — this all bodes well for shareholders.
Management at
growth companies are able to use that earnings
growth to produce a higher return for investors with a return - on - equity
of 17.8 % versus 16.4 % on average at
dividend - paying
companies.
The
company has an expected total return
of 13 % to 15 % a year from
dividends (5 %) and earnings - per - share
growth (8 % to 10 %).