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  • Dividend Growth Investing: A Strategy For Young Investors, Too [View article]
    Thank you David. This makes alot of sense. If a dividend paying company is not increasing their dividend, then there is probably an underlying reason why and could be a sign that their earnings are stagnant.

    Thank you. I feel like I am starting to understand this a little better now.
    Apr 4, 2013. 04:39 AM | 1 Like Like |Link to Comment
  • Dividend Growth Investing: A Strategy For Young Investors, Too [View article]

    Thank you for answering my question. Not trying to argue, just trying to understand. I appears that you just made the assumption in your 2nd to last paragraph that Stock A would not increase in value and that Stock B would. Can you really make that assumption given the only known difference between the stocks are that Stock B grows their dividend and Stock A does not.

    If not, then couldn't you assume that they both have an equal increase in value over a given amount of time? And if so, when the dividend of Stock B overtakes that of Stock A, I would be selling Stock A and purchasing Stock B with no net difference as if I had purchased Stock B from the beginning, except for the fact that I have been receiving higher dividends in Stock A this whole time.

    Have I made an incorrect assumption here? Or several maybe.
    Apr 3, 2013. 05:15 PM | Likes Like |Link to Comment
  • Dividend Growth Investing: A Strategy For Young Investors, Too [View article]
    I am new to investing and am trying to figure out the best strategy to use. Dividend growth investing sounds interesting, but I am a little unclear on one thing: Why would it ever be advantageous to invest in a high dividend-growth stock instead of just a high dividend-yield stock?

    For example, say Company A has a dividend yield of 5% but no history of dividend growth and Company B has a dividend yield of 3% and a high dividend growth history. Assuming both company's have a long history of consistent dividends and both appear to be solid companies, why would you ever pick Company B over Company A (other than for growth potential reasons, etc.)? Even with Company B's consistent dividend growth, their yield would probably never match that of Company A, and even if it did, couldn't you just sell Company A and buy Company B once Company B's yield overtook the yield of Company A?

    If this is true, shouldn't I be investing in high dividend yield stocks instead of high dividend growth stocks and just monitor the yields while periodically adjusting my portfolio to ensure it always contains high yielding stocks?
    Apr 3, 2013. 03:01 PM | 1 Like Like |Link to Comment