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Should I Go With Dividend Growth Investing Or ETFs? An Answer To Ben Felix

Published Tue, 07 May 2019 06:07:28 -0400 on Seeking Alpha

A few days ago, a reader asked me what I thought about dividend growth investing vs. ETF (index) investing. He referred to an article from the Globe & Mail written by Benjamin Felix. He claimed that dividend investing is nothing but a fairy tale. He described how focusing on dividend stocks would prevent from getting an optimal return and that index ETF investing is a lot better.
"In my opinion, investing for dividend income is one of the most romanticized ideas in personal finance."- Ben Felix
That's it! This guy is looking for a fight!

I'm sure he expected a response from dividend investors, and this is what I'll be providing today. But before I start debunking his arguments one by one, I'd like to mention that I have nothing against ETF or Index investing. In fact, I truly believe there are multiple ways for an individual investor to be successful on the market. Some do it with technical analysis, others with options. Dividend growth investing and index investing are just two more ways to make money. The problem I have with Ben's article is how he despises dividend investing with a questionable rationale.
He also published a video earlier this year on his YouTube channel restating pretty much what I found in the article:

"Dividends do not matter"- Ben's YouTube introduction
In his video, he asks investors to prove him wrong. I will use both the article and the YouTube video and answer his points one by one. I'm using Ben's article subtitles... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
KRAFT HEINZ 31.54   0.0 -8.40 1.60 5.26
IBM 149.63   15.5 9.68 6.48 4.51
ROYAL BANK OF CANADA 80.25   12.2 6.58 3.12 3.83
APPLE 202.59   17.0 11.89 3.08 1.51
MICROSOFT 136.62   27.0 5.07 1.84 1.35
BERKSHIRE HATHAWAY A 324010.00   28.5 11356.59 0.00 0.00
BERKSHIRE HATHAWAY B 214.20   0.0 0.00 0.00 0.00


Older articles featuring Kraft Heinz (KHC):
Dividend Growth 50: Oh Deere Me, This Portfolio's Income Just Keeps Plowing Ahead
My Dividend Growth Portfolio: Q2 2019 Summary
A 9.8% Yielding Portfolio Beating The Market: The Cash Flow Kingdom Income Portfolio Mid-Year Review
Dividend Income Update: June 2019
My Dividend Growth Portfolio Q2 Update: 41 Holdings, 8 Buys, 8 Sells
My Dividend Growth Portfolio May Update: 42 Holdings, 1 Buy
The Kraft Heinz Company Declares Regular Quarterly Dividend of $0.40 Per Share
My Dividend Growth Portfolio April Update: 42 Holdings, 6 Buys, 5 New Holdings And 1 Called Away
Dividend Income Update March 2019
Dividends By The Numbers For March 2019 And 2019-Q1