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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 42.00   17.9 2.35 1.96 4.73
CONSOLIDATED EDISON 72.96   18.1 4.04 2.76 3.67
EXXON MOBIL 84.97   39.7 2.14 3.00 3.49
MCDONALDS 121.38   23.0 5.29 3.76 3.08
PROCTER & GAMBLE 86.96   15.8 5.50 2.68 3.06
JOHNSON & JOHNSON 113.91   20.2 5.65 3.20 2.80
ELI LILLY 76.32   33.2 2.30 2.08 2.66
WASTE MANAGEMENT 69.34   27.6 2.51 1.64 2.35

AT&T - T  


Older articles featuring At&t (T):
10 Dividend Growth Stocks For January 2017
VF Corp. Leads Champion Dividend Dog New Year Gains
Does Chowder Rule Dividend Growth Stocks?
Safe Follower Favorite Dividend Dogs For January
IRA Portfolio Yielding 4.8% Created From 2 Vanguard Funds And 34 Stocks In 10 Sectors
Eight High-Quality Dividend Payers To Explore
Stocks Trading Ex-Dividend on 1/6/2017
Lanny's October Dividend Income Summary
Dividend Raises And Cuts For October 2016
Asian Dividend Plays For Growth And Income

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