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...
|Stock name||Last trade||P/E||Earnings/Share||Dividend/Share||Dividend yield|
|PROCTER & GAMBLE||72.42||23.9||3.04||2.65||3.66|
|JOHNSON & JOHNSON||93.93||16.4||5.68||3.00||3.19|
Older articles featuring At&t (T):AT&T's Yield Hovers Above 6%
AT&T Is A Dividend Stalwart
Frontier: Should You Grab The 9% Yield Or Go For Safer 12%?
Retirement Strategy: A Journey Through Life With Dividend Income And Mortality Realities
Top 5 Lowest Priced CCC Dividend Dogs Garnered 42.82% More Returns Combined As Of September 18, 2016
Top 10 CCC Dividend Dogs Average Combined 11.37% Yield As Of September 18
AT&T Declares Quarterly Dividend
A Slow And Steady 6% Dividend Yield Can Win Lots Of Races
Happiness Is What Happens When Your Sinful Dreams Come True: Wicked Capital Gains And Dividends
Dividend Diplomats September Watch List