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Targeting A Retirement Income Level From A Dividend Growth Portfolio - Part 3

Published Wed, 21 Dec 2011 13:13:08 -0500 on Seeking Alpha

I have on occasion seen the equation put forth here on Seeking Alpha that Dividend Yield plus Dividend Growth equals Return. This is a mathematical fallacy. To quote the ever wise David Van Knapp: it's like "adding the speed of a car to its acceleration--the result makes no sense." But why do some dividend investors continue to cite this as a metric? I considered my own previous article in this series. In this article, I analyzed something that I know dividend investors intuitively understand...there is an inverse mathematical relationship between dividend yield and dividend growth. In other words, to end up with an equal result over some time period, a stock with a lower current dividend yield must have a higher growth rate than a stock with a higher current yield. Unfortunately, I think a few investors (perhaps understandably) extrapolate this relationship to conclude that it is perfectly symmetric...i.e. at... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
AT&T 41.65   19.9 2.09 1.96 4.62
EXXON MOBIL 81.76   43.5 1.88 3.00 3.66
CONSOLIDATED EDISON 78.11   19.0 4.12 2.76 3.63
PROCTER & GAMBLE 90.99   16.5 5.50 2.68 2.94
MCDONALDS 129.10   23.8 5.42 3.76 2.92
JOHNSON & JOHNSON 126.26   21.5 5.88 3.20 2.50
ELI LILLY 84.36   32.7 2.58 2.08 2.47
WASTE MANAGEMENT 72.65   27.4 2.65 1.70 2.33

AT&T - T  

Older articles featuring At&t (T):
My 4% Dividend Yield Portfolio: Q1'17 Summary And Short-Term Expectations
Retirees: How To Generate The Income You Need From A Dividend Portfolio
Tending The Dividend Garden - March Update
A Different Sort Of Yield From AT&T
10 Top 'Safer' S&P 500 Dividend Dogs Set To Gain 9% To 24%
AT&T: 4.6% Dividend Yield With Room For Upside
Dividend Dog Followers Luckily Found 13 Safe, High-Yield Picks In March
AT&T: Dividend Sustainable And Growth Steady
Combined Tech+Comm Sector Safe Dividends Paced By Daktronics Alleged Gain In March
Dividend Champion Portfolio March Update