What Is More Valuable? Dividend Yield, Or Capital Appreciation? [View article]
"However, it is wrong, IMHO, to ignore appreciation driven by earnings growth."
I don't "ignore" appreciation. It is a secondary goal for me, after the primary goal of a reliable, dependable, and rising income stream produced by dividends.
"To your original point, if an investor held only HON, MMM, UTX, or even KO and JNJ, wouldn't he or she have to sell appreciated stocks to support a life style determined by the 4% withdrawal guideline?"
I don't use the word "withdrawal", as (to me) that implies "sales of assets". I prefer to fund my retirement entirely from dividends. I would rather support a slightly reduced life style, that can be afforded entirely from dividends, rather than a slightly enhanced life style, that requires sales of assets. But that's me, and I respect the right of each person to make a different trade-off.
The Safety Valve Of Dividend Growth Investing [View article]
"Morningstar has a "portfolio X-ray" that let's you input all the stuff you own, and then it gives you back your holdings broken down."
I don't need Morningstar. If I wanted something of mine to be broken down, I would give it to my brother. :-)
A related joke:
One government agency sends a request to another government agency for a list of its employees broken down by sex. The response is: "Our problem is alcohol." :-)
Waste Management, Inc. Dividend Stock Analysis [View article]
"it is just as important to consider dividend-paying stocks to avoid as it is to consider those deserving of a deep-dive into d-d."
I emphatically agree. 100 articles with reasons to buy a company, do not give me as much useful information as 1 article with reasons to NOT buy a company.
What Is More Valuable? Dividend Yield, Or Capital Appreciation? [View article]
Sheldon, perhaps I misunderstood the use of "total return" in your comment:
"HON yields 2.1% and its dividend has a five-year growth rate of 8.3%. T yields 5.0% with a five-year growth rate of 2.4%. It will take 17 years for the annual dividend on HON to pass that of T. However, even after 25 years, cumulative dividends on HON will still be less than those of T. On a current basis, structuring my retirement portfolio to yield over 4% enables a trip to Europe this summer and another one in 2014. Were I relying strictly on dividend growth stocks without regard to total return"
When you choose high current yield low dividend growth companies over low current yield high dividend growth companies, you enjoy the benefits of higher income, but this seems to me to be unrelated to "total return".
What Is More Valuable? Dividend Yield, Or Capital Appreciation? [View article]
"Were I NOT to consider their total return aspect, they make no sense as investments for long-term or current purposes.
I have backed up my conclusions with a spreadsheet. HON yields 2.1% and its dividend has a five-year growth rate of 8.3%. T yields 5.0% with a five-year growth rate of 2.4%. It will take 17 years for the annual dividend on HON to pass that of T. However, even after 25 years, cumulative dividends on HON will still be less than those of T. On a current basis, structuring my retirement portfolio to yield over 4% enables a trip to Europe this summer and another one in 2014. Were I relying strictly on dividend growth stocks without regard to total return, my wife and I might be shopping AARP bus tours."
Sheldon, should I understand this to mean that you regularly and predictably sell appreciated stocks, because the dividends you receive provide you with less income than you need?
What Is More Valuable? Dividend Yield, Or Capital Appreciation? [View article]
Robert
The Safety Valve Of Dividend Growth Investing [View article]
Thanks, Elle!
The Safety Valve Of Dividend Growth Investing [View article]
That might be what works for you, but it might not work for everyone else (including me).
"Those investors in the financial sector saw excellent growth in their div flow in the early 2000's. Those investors don't post much here anymore."
I was an "investor in the financial sector". I lost money in 2008. I have not owned a bank stock since then. I post here all the time.
What Is More Valuable? Dividend Yield, Or Capital Appreciation? [View article]
Perhaps, but to me, it matters, as the former gives me current income, whereas the latter does not.
What Is More Valuable? Dividend Yield, Or Capital Appreciation? [View article]
I don't "ignore" appreciation. It is a secondary goal for me, after the primary goal of a reliable, dependable, and rising income stream produced by dividends.
"To your original point, if an investor held only HON, MMM, UTX, or even KO and JNJ, wouldn't he or she have to sell appreciated stocks to support a life style determined by the 4% withdrawal guideline?"
I don't use the word "withdrawal", as (to me) that implies "sales of assets". I prefer to fund my retirement entirely from dividends. I would rather support a slightly reduced life style, that can be afforded entirely from dividends, rather than a slightly enhanced life style, that requires sales of assets. But that's me, and I respect the right of each person to make a different trade-off.
The Safety Valve Of Dividend Growth Investing [View article]
I don't need Morningstar. If I wanted something of mine to be broken down, I would give it to my brother. :-)
A related joke:
One government agency sends a request to another government agency for a list of its employees broken down by sex.
The response is:
"Our problem is alcohol."
:-)
The Trade-Off Between Dividend Growth, Current Yield And Price Appreciation [View article]
"History might not repeat itself.
But it does rhyme."
http://bit.ly/11jrjam
The Trade-Off Between Dividend Growth, Current Yield And Price Appreciation [View article]
You can use my chart:
http://bit.ly/rCDtjJ
to find out which companies have raised their dividends by X% (or more) over Y (or more) consecutive years.
Waste Management, Inc. Dividend Stock Analysis [View article]
I emphatically agree.
100 articles with reasons to buy a company, do not give me as much useful information as 1 article with reasons to NOT buy a company.
Not Starting Your Net Worth Over [View article]
I currently have a $20 cash cushion.
I guess I'm a "nano-Buffett". :-)
The Safety Valve Of Dividend Growth Investing [View article]
What Is More Valuable? Dividend Yield, Or Capital Appreciation? [View article]
"HON yields 2.1% and its dividend has a five-year growth rate of 8.3%. T yields 5.0% with a five-year growth rate of 2.4%. It will take 17 years for the annual dividend on HON to pass that of T. However, even after 25 years, cumulative dividends on HON will still be less than those of T. On a current basis, structuring my retirement portfolio to yield over 4% enables a trip to Europe this summer and another one in 2014. Were I relying strictly on dividend growth stocks without regard to total return"
When you choose high current yield low dividend growth companies over low current yield high dividend growth companies, you enjoy the benefits of higher income, but this seems to me to be unrelated to "total return".
Is this interpretation accurate?
What Is More Valuable? Dividend Yield, Or Capital Appreciation? [View article]
I have backed up my conclusions with a spreadsheet. HON yields 2.1% and its dividend has a five-year growth rate of 8.3%. T yields 5.0% with a five-year growth rate of 2.4%. It will take 17 years for the annual dividend on HON to pass that of T. However, even after 25 years, cumulative dividends on HON will still be less than those of T. On a current basis, structuring my retirement portfolio to yield over 4% enables a trip to Europe this summer and another one in 2014. Were I relying strictly on dividend growth stocks without regard to total return, my wife and I might be shopping AARP bus tours."
Sheldon, should I understand this to mean that you regularly and predictably sell appreciated stocks, because the dividends you receive provide you with less income than you need?
The Case Against Buying Low And Selling High [View article]
Christine, you're right; but what about the opportunity cost of having them even if no opportunity arise? :-(
The Case Against Buying Low And Selling High [View article]
Robert