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Higher Dividend Payments May Not Mean Higher Dividend Yields

Thursday, April 19, 2012 - 5:20 AM
If you're considering investing more into dividend stocks, this Dividend Growth Investor blog post is a useful reminder that it's a company's history of higher dividend payments that is important and not higher dividend yields:
As a result a stock investor who purchases $1000 worth of a stock yielding 2%-3% today will generate $20-$30 in annual dividend income today. If the stock keeps raising distributions and manages to double them in 10 years, the dividend income that the investor generates will double to $40-$60/year. If the stock price doubles in the process, the current yield would be 2%-3% for new investors. For the original investors however, their yield on cost, would be 4%-6%.

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Ken TuminKen Tumin5,468 posts since
Nov 29, 2009
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