Are Streaks And Current Yields The Best Metrics For Dividend Growth Investors? [View article]
"it seems like work."
Of course it's work. Think about how much work David Fish puts into the CCC lists. Think about how much work I put into my web site. Think about how many people would benefit from your work. It's worth it.
Are Streaks And Current Yields The Best Metrics For Dividend Growth Investors? [View article]
"capture the fattest part of the dividend growth curve"
I don't think it's accurate that "a rapid growth/buildout phase where dividends are small to nonexistent, then a period of fruition where dividends can grow very rapidly for a period of years, and finally maturity, where the dividend growth settles in at an indefinitely sustainable level."
Are Streaks And Current Yields The Best Metrics For Dividend Growth Investors? [View article]
"Do you have any intuitive sense of what the "bumpiness cutoff" would be for a conservative investor?"
No, I'm sorry, I don't.
"I know the term is vague, but say, for the person who constructs their entire portfolio from David Van Knapp's list of the 40 most popular DG stocks?"
One could take David's list, and look up each one on my web site, to get its bumpiness.
Are Streaks And Current Yields The Best Metrics For Dividend Growth Investors? [View article]
"they don't care about the share price, as long as they have the reliable dividend growth they want."
It's not that I "don't care", it's that capital appreciation is my second priority, not my first priority.
"But of course, price appreciation is nice too."
Yes, but you only realize it when you sell, and once you sell, you never ever receive any further benefits (dividends, even more price appreciation).
"There is no reason why a dividend growth investor can't take some profits from a dividend growth stock that has appreciated nicely, and then roll the money into another dividend growth stock which gives them further diversification, or takes advantage of changed market conditions."
Dividend growth investors do that all the time.
"Granted that dividend growth is someone's primary objective, there is no reason why price appreciation can't be a secondary objective"
It is for me.
"and what I am suggesting is that some of these low-yield, high-dividend-growth companies may offer a better chance of achieving the secondary objective."
But if I give up my primary objective in order to achieve my secondary objective, then I'm making a mistake.
Are Streaks And Current Yields The Best Metrics For Dividend Growth Investors? [View article]
"it is possible for a stock with a very high CAGR to also have very high volatility in its dividend growth rate - up one year by 25%, flat or even down the next. Conservative investors may prefer not to have a wild ride. Retired investors who are relying on this month's dividend check may be sorely disappointed if XYZ Corp fails to raise its dividend for a year, or even cuts it."
The company with the highest CAGR (that I know of) is WM. Its 10-year CAGR is 73.438%. Some folks might rush out to buy it, but they might regret doing that. The huge CAGR is due to one annual increase of 7400.000%, followed by 8 years of much smaller increases, the last of which was 4.412%.
Are Streaks And Current Yields The Best Metrics For Dividend Growth Investors? [View article]
"HON is automatically excluded from consideration by investors who never consider purchasing a stock whose dividend has not increased every year, because of that one year without a dividend increase. Is this reasonable?
My answer is no"
And that might be exactly right for you, but it might not be right for me. Everyone has their own definition of what is "reasonable".
And perhaps "reasonable" is not the best word here. Perhaps the question should be, "Will this still achieve my investment goals?".
Are Streaks And Current Yields The Best Metrics For Dividend Growth Investors? [View article]
Craig, congratulations on your first article! Especially one that generated so many good comments, and raised a question that made everyone think - "What if I relax my requirements?". It is a worthy question. Other variants might be:
"What if I relax my minimum yield?" "What if I relax my mininum CAGR?" (and with thanks to richjoy:) "What if I relax my minimum earnings growth?"
I believe the only way to answer these questions is to follow up with one more question:
"If I do that, can I still achieve my investment goals?"
If the answer is no, then relaxing is not an option.
Are Streaks And Current Yields The Best Metrics For Dividend Growth Investors? [View article]
"Which means (correctly) that total return is the only justification for getting into lower yielding growth stocks that pay dividends."
I agree.
You can only realize the capital gain portion of the total return if you sell. If you're forced to sell into a down market, because you need cash to pay for living expenses, then total return did not work out well for you. Even if you sold into an up market, once you sell you no longer receive the dividends, or any other possible benefit from owning that stock.
Are Streaks And Current Yields The Best Metrics For Dividend Growth Investors? [View article]
"the greater price appreciation of a (correctly selected) lower-yield stock ought to be able to do that -- maybe in as little as a day."
I do not want my retirement to depend on selling stocks that have achieved "greater price appreciation". That is way too risky for me, and did not work out at all for folks who retired in 2008. :-(
Are Streaks And Current Yields The Best Metrics For Dividend Growth Investors? [View article]
"I would argue that a board of directors that freezes a dividend one year, is more likely to freeze it again, or even cut it, in a future year. A company that raises its dividend year after year, through thick and thin, no matter what (even if just by a penny), shows a culture that will do everything it can to continue raising its dividend. Knowing that about my companies makes me feel more confident about my future dividend income and helps me sleep at night."
Are Streaks And Current Yields The Best Metrics For Dividend Growth Investors? [View article]
Of course it's work.
Think about how much work David Fish puts into the CCC lists.
Think about how much work I put into my web site.
Think about how many people would benefit from your work.
It's worth it.
Are Streaks And Current Yields The Best Metrics For Dividend Growth Investors? [View article]
I don't think it's accurate that "a rapid growth/buildout phase where dividends are small to nonexistent, then a period of fruition where dividends can grow very rapidly for a period of years, and finally maturity, where the dividend growth settles in at an indefinitely sustainable level."
Look at PG:
http://bit.ly/1ae2RHT
I only have data from 1977 onward, but I don't see the pattern you're describing.
Are Streaks And Current Yields The Best Metrics For Dividend Growth Investors? [View article]
My web site:
http://bit.ly/rCDtjJ
shows that only 14 companies have raised their dividend by 10% or more for 10 consecutive years.
Are Streaks And Current Yields The Best Metrics For Dividend Growth Investors? [View article]
Robert
The Business Model Of The Dividend Growth Investor [View article]
Giorgio, that is important to me too!
Are Streaks And Current Yields The Best Metrics For Dividend Growth Investors? [View article]
No, I'm sorry, I don't.
"I know the term is vague, but say, for the person who constructs their entire portfolio from David Van Knapp's list of the 40 most popular DG stocks?"
One could take David's list, and look up each one on my web site, to get its bumpiness.
Are Streaks And Current Yields The Best Metrics For Dividend Growth Investors? [View article]
It's not that I "don't care", it's that capital appreciation is my second priority, not my first priority.
"But of course, price appreciation is nice too."
Yes, but you only realize it when you sell, and once you sell, you never ever receive any further benefits (dividends, even more price appreciation).
"There is no reason why a dividend growth investor can't take some profits from a dividend growth stock that has appreciated nicely, and then roll the money into another dividend growth stock which gives them further diversification, or takes advantage of changed market conditions."
Dividend growth investors do that all the time.
"Granted that dividend growth is someone's primary objective, there is no reason why price appreciation can't be a secondary objective"
It is for me.
"and what I am suggesting is that some of these low-yield, high-dividend-growth companies may offer a better chance of achieving the secondary objective."
But if I give up my primary objective in order to achieve my secondary objective, then I'm making a mistake.
Are Streaks And Current Yields The Best Metrics For Dividend Growth Investors? [View article]
With a truly outstanding dividend growth rate, it simply does not take that long to catch up."
Yes, but the bad news is, you can't expect a company to maintain a high dividend growth rate forever.
My web site shows which companies have increased their dividends by at least X% per year over the most recent Y years:
http://bit.ly/rCDtjJ
and it shows that the higher the growth rate, the shorter the streak.
Are Streaks And Current Yields The Best Metrics For Dividend Growth Investors? [View article]
we have no measure of their standard deviations. Digging up the hidden gems is going to take some work."
I've done that, but only for the CCC companies, not for the list you want. I call it "bumpiness". I wrote this article about it:
http://seekingalpha.co...
and my web site shows which companies with which CAGRs have which bumpiness:
http://bit.ly/TF8udD
Are Streaks And Current Yields The Best Metrics For Dividend Growth Investors? [View article]
The company with the highest CAGR (that I know of) is WM. Its 10-year CAGR is 73.438%. Some folks might rush out to buy it, but they might regret doing that. The huge CAGR is due to one annual increase of 7400.000%, followed by 8 years of much smaller increases, the last of which was 4.412%.
CAGR alone does not tell the whole story.
Are Streaks And Current Yields The Best Metrics For Dividend Growth Investors? [View article]
My answer is no"
And that might be exactly right for you, but it might not be right for me. Everyone has their own definition of what is "reasonable".
And perhaps "reasonable" is not the best word here. Perhaps the question should be, "Will this still achieve my investment goals?".
Are Streaks And Current Yields The Best Metrics For Dividend Growth Investors? [View article]
"What if I relax my minimum yield?"
"What if I relax my mininum CAGR?"
(and with thanks to richjoy:)
"What if I relax my minimum earnings growth?"
I believe the only way to answer these questions is to follow up with one more question:
"If I do that, can I still achieve my investment goals?"
If the answer is no, then relaxing is not an option.
Are Streaks And Current Yields The Best Metrics For Dividend Growth Investors? [View article]
I agree.
You can only realize the capital gain portion of the total return if you sell. If you're forced to sell into a down market, because you need cash to pay for living expenses, then total return did not work out well for you. Even if you sold into an up market, once you sell you no longer receive the dividends, or any other possible benefit from owning that stock.
Are Streaks And Current Yields The Best Metrics For Dividend Growth Investors? [View article]
I do not want my retirement to depend on selling stocks that have achieved "greater price appreciation". That is way too risky for me, and did not work out at all for folks who retired in 2008. :-(
Are Streaks And Current Yields The Best Metrics For Dividend Growth Investors? [View article]
I agree.