Dividend Growth Investor

Dividend Stocks: 6 More Increases in the News

As part of my research I am trying to uncover stocks that have sustainable dividend growth. Dividend Growth investing focuses on future yields and total returns, not just dividend yields. It's true that stocks like FRO and NAT have high dividend yields right now which is mainly due to the fact that they are also returning a portion of their capital back as well. This might not be a sustainable business model especially in the current credit freeze, since generous distributions as a return of capital are generally funded by expansion by selling extra stocks or bonds. Furthermore I believe that stocks which pay out most of their earnings and then some could get particularly vulnerable to unfavorable conditions.

I am a bigger fan of stocks that have average market yields but spot the opportunity for above average dividend growth. WMT is a prime example of that - no one bought WMT for their yield, but yet their total returns and dividend growth were exceptional.

I do agree with you that some of the stocks do have a very small dividend yield and not so good dividend growth. The bright spots are WTR and EMR. If these stocks could double their dividends in 10 years or less, you will be getting a very decent yield on cost..

As for most shipping stocks, the volatility in dividends is not something I enjoy. I guess I would have to explain the dividend growth investing concept in more detail.