Shareholder Yield And 3 High-Quality Dividend Stocks To Target

Oct. 15, 2021 8:26 AM ET, , , , , , 21 Comments
Kirk Spano
Investing Group Leader

Summary

  • Dividend stocks require underlying growth to support their dividends long-term, this is a simple business truth.
  • Buybacks and rising dividends comprise the traditional view on shareholder yield. Buybacks reduce the number of shares that get a dividend, thus increasing payment per share.
  • Together, rising dividends, buybacks and falling net debt comprise a more comprehensive view of shareholder yield. Falling net debt is good for buybacks and future dividend growth.
  • These companies offer excellent shareholder yield, strong balance sheets, are scalable and are almost priced right for the first time in a while.
  • This idea was discussed in more depth with members of my private investing community, Margin of Safety Investing. Learn More »

Hand of Business man holding coin put in piggy bank with money stack growing growth saving money, Concept invesment for financial freedom plan, business deposit to hope success

Arthit_Longwilai/iStock via Getty Images

Dividend investors often make the mistake of thinking the highest yield wins. However, that is often a harbinger of business and share price weakness. In those cases, your risk is often higher than the stock market or S&P 500's (

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This article was written by

Kirk Spano
27.45K Followers

Kirk Spano is the founder of Bluemound Asset Management, LLC and has managed money for a wide range of clients since 1995. His passion is helping hardworking people make more money with less risk. Kirk’s investing group Margin of Safety Investing features his stock and ETF focus lists, trade alerts, option selling for income and macro analysis. Learn more.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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