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|
|PROCTER & GAMBLE||85.16||21.3||3.91||2.57||3.02|
|JOHNSON & JOHNSON||103.13||17.0||6.03||2.80||2.72|
Older articles featuring At&t (T):AT&T: Never Look A High-Yield Gift Horse In The Mouth
AT&T Is A Good Dividend Investment Here
AT&T: A Solid 5.5% Yield For Income Investors
Verizon Communications: Soft Quarter, But Dividend Appeal Remains
Which Sectors Are Best For Dividends Among U.S. Stocks?
10 Dividend Champion Dogs Score 10.3% To 36.3% September Gains
A Review Of Holding Out For Better Prices On Some Dividend Growth Stocks Over The Next 2 Months
Dividend Growth Portfolio Fall Checkup And Semi-Annual Review
To Buy High-Yielding AT&T Or Not To Buy?
Stocks Trading Ex-Dividend on 10/8/2014