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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 37.14   7.8 4.76 2.00 5.39
EXXON MOBIL 76.54   16.5 4.63 3.08 4.02
CONSOLIDATED EDISON 77.77   15.7 4.94 2.86 3.68
PROCTER & GAMBLE 82.60   22.1 3.74 2.76 3.34
ELI LILLY 78.97   0.0 -0.20 2.25 2.85
MCDONALDS 157.79   24.8 6.36 4.04 2.56
JOHNSON & JOHNSON 133.15   341.4 0.39 3.36 2.52
WASTE MANAGEMENT 85.15   19.3 4.41 1.70 2.00

AT&T - T
AT&T - T  

Older articles featuring At&t (T):
Top Champion Dividend Gainers: Meredith, National Fuel, Federal Realty... In Broker Eyes For February
Repairing The Foundations Of The Dividend House And Millennial Millions DGI Portfolios
High Yield Dividend Champion Portfolio - February Update
AT&T: Greedy Yield
AT&T: Let's Go Shopping For A 5.4% Yield Amid Selloff
S&P 500 Dividend Aristocrats AT&T, Chevron, Con Ed, Exxon And Federal Show Top Yields
My Dividend Growth Portfolio - 46 Holdings, 1 Buy, 2 Sells
AT&T Vs. Vodafone: Which High-Yield Telecom Dials Up A Better Dividend?
What Dividend Stocks Are You Looking For Today?
John And Jane - January Dividend Income Tracker