There are stocks that pay dividends and then there are dividend stocks. The latter group is comprised of those companies that raise their dividends every year, giving investors dependable and growing income.
Long-term return data prove the point that while there is a favorable difference between dividend payers and non-dividend stocks, dividend growers beat both groups. From 1972 through 2012 companies that initiated or consistently raised dividends outperformed and were less volatile than the companies either did not pay, cut or kept dividends stagnant, according to Ned Davis Research.
Dividend growth is useful on another front: As an inflation fighter. Since the early 1970s, when inflation ran as high as 11% per year, aggregate annual dividends of the S&P 500 have grown more than 1,000%, to $34.99 from $3.16 a share, according to the Wall Street Journal.
******
57% of the holdings in the D2 Capital Management Multi-Asset Income Portfolio consist of dividend paying companies. Current dividend yield of the total portfolio is 5.53% (as of 7 April 2014).Disclosure: I own the D2 Capital Management Multi-Asset Income Portfolio
The views expressed here are that of myself or the cited individual or firm and do not constitute a recommendation, solicitation, or offer by myself, D2 Capital Management, LLC or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. D2, its clients, and its employees may or may not own any of the securities (or their derivatives) mentioned in this article.
The Jacksonville Business Journal has ranked D2 Capital Management in the top 25 of Certified Financial Planners in Jacksonville. The Firm is also a member of the Financial Planning Association of Northeast Florida, the Jacksonville Chamber of Commerce, the Southside Businessmen's Club, and the Beaches Business Association.
No comments:
Post a Comment