09-23-2013, 09:39 AM
(03-24-2013, 12:21 PM)Kerim Wrote: I give a little extra weight to current yield. Over a long period of time, a low current yield that grows more quickly may provide much higher returns than a higher current yield that is growing more slowly. The difference to me (and reasonable minds may certainly differ about this) is that the higher current yield is a bird in the hand, while the faster dividend growth rate is two in the bush. You cannot predict so well how long a higher dividend growth rate will be sustainable.
Both apply and it really depends upon your investing time frame. If you have many years of investing ahead of you than you should not overlook the lower yield stocks which provide higher growth. Those may well be your big winners in the end.
I agree that the medium yields with average growth should be a big part of your portfolio.
As I'm 71 I am no longer interested in low yielding stocks but do set a minimum yield I will consider and consider consistent growth a must. I also wait till stocks are value priced to get the best yield I can get.
In the long term your returns will depend not on which dividend stocks you buy but when you buy them.