Comments on: Historical Dividend Growth http://www.canadiancapitalist.com/historical-dividend-growth/ Helping you invest and prosper Sat, 11 Feb 2012 19:27:54 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Notes from a Don Drummond Talk | MoneySense http://www.canadiancapitalist.com/historical-dividend-growth/#comment-288845 Notes from a Don Drummond Talk | MoneySense Fri, 22 Oct 2010 14:21:53 +0000 http://www.canadiancapitalist.com/?p=937#comment-288845 [...] Historical Dividend Growth [...] [...] Historical Dividend Growth [...]

]]> By: S&P 500 Dividends have Dropped | MoneySense http://www.canadiancapitalist.com/historical-dividend-growth/#comment-215368 S&P 500 Dividends have Dropped | MoneySense Thu, 08 Apr 2010 11:41:09 +0000 http://www.canadiancapitalist.com/?p=937#comment-215368 [...] maintained for a long time. They did not pay enough attention to market history, which showed that dividend growth over the long term has been rather modest in real terms. This should be of no surprise: dividends are paid out of earnings and the dividend growth rate [...] [...] maintained for a long time. They did not pay enough attention to market history, which showed that dividend growth over the long term has been rather modest in real terms. This should be of no surprise: dividends are paid out of earnings and the dividend growth rate [...]

]]> By: S&P 500 Dividends have Dropped | Canadian Capitalist http://www.canadiancapitalist.com/historical-dividend-growth/#comment-215346 S&P 500 Dividends have Dropped | Canadian Capitalist Thu, 08 Apr 2010 03:10:10 +0000 http://www.canadiancapitalist.com/?p=937#comment-215346 [...] maintained for a long time. They did not pay enough attention to market history, which showed that dividend growth over the long term has been rather modest in real terms. This should be of no surprise: dividends are paid out of earnings and the dividend growth rate [...] [...] maintained for a long time. They did not pay enough attention to market history, which showed that dividend growth over the long term has been rather modest in real terms. This should be of no surprise: dividends are paid out of earnings and the dividend growth rate [...]

]]> By: Pit Dollar http://www.canadiancapitalist.com/historical-dividend-growth/#comment-137870 Pit Dollar Sat, 14 Jun 2008 02:47:49 +0000 http://www.canadiancapitalist.com/?p=937#comment-137870 Can Cap and others, for TSX stocks, where (which website) is a good place to lookup historical dividend rate? Can Cap and others, for TSX stocks, where (which website) is a good place to lookup historical dividend rate?

]]> By: Canadian Capitalist http://www.canadiancapitalist.com/historical-dividend-growth/#comment-132063 Canadian Capitalist Tue, 06 May 2008 17:33:55 +0000 http://www.canadiancapitalist.com/?p=937#comment-132063 DGI: Dividend reinvestment is indeed powerful. Financial Jungle referred to the Tweedy Browne paper that shows that dividend reinvestment accounts for the vast majority of equity returns. But if the dividends are consumed instead, while dividend growth might be robust at times (like now) or meager at others, the study suggests that over the long-term they keep up with inflation. DGI: Dividend reinvestment is indeed powerful. Financial Jungle referred to the Tweedy Browne paper that shows that dividend reinvestment accounts for the vast majority of equity returns. But if the dividends are consumed instead, while dividend growth might be robust at times (like now) or meager at others, the study suggests that over the long-term they keep up with inflation.

]]> By: 0xCC http://www.canadiancapitalist.com/historical-dividend-growth/#comment-132044 0xCC Tue, 06 May 2008 13:01:54 +0000 http://www.canadiancapitalist.com/?p=937#comment-132044 DAvid, that sounds like exactly the kind of stock I would consider for my basket. A long-term history of dividend increases through at least one economic cycle. DAvid, that sounds like exactly the kind of stock I would consider for my basket. A long-term history of dividend increases through at least one economic cycle.

]]> By: Dividend Growth Investor http://www.canadiancapitalist.com/historical-dividend-growth/#comment-131936 Dividend Growth Investor Tue, 06 May 2008 02:33:33 +0000 http://www.canadiancapitalist.com/?p=937#comment-131936 Canadian Capitalist, Obviously I am a big fan of dividend investing ( judging by my nickname). I do believe that dividend stocks provide the best hedge against inflation over time. Of course there is always the possibility of a catastrophic risk of ruin in any venture possible be it in ultra safe government bonds or a triple A rated corporation. But over time by spreading your purchases across a wide number of equities, you'd be able to at least meet inflation. I don't know how the research which you are quoting, accounts for dividend reinvestment. But over time, dividend reinvestment provides for a nice income stream in turbulent times. Even if you keep reinvesting dividends in the S&P 500 over a period of 3.5 decades, you will be able to achieve close to 100% yield on cost. In my opinion the only environment that is truly detrimental for stock returns is deflation. Hyper inflaiton could also be bad for the economy as a whole, but it is not necesserily too bad for the stock market. Stocks give you a percentage ownership in real businesses, and as prices increase, these businesses could sell their inventories at higher prices.. Canadian Capitalist,

Obviously I am a big fan of dividend investing ( judging by my nickname).
I do believe that dividend stocks provide the best hedge against inflation over time. Of course there is always the possibility of a catastrophic risk of ruin in any venture possible be it in ultra safe government bonds or a triple A rated corporation. But over time by spreading your purchases across a wide number of equities, you’d be able to at least meet inflation.

I don’t know how the research which you are quoting, accounts for dividend reinvestment. But over time, dividend reinvestment provides for a nice income stream in turbulent times. Even if you keep reinvesting dividends in the S&P 500 over a period of 3.5 decades, you will be able to achieve close to 100% yield on cost.

In my opinion the only environment that is truly detrimental for stock returns is deflation. Hyper inflaiton could also be bad for the economy as a whole, but it is not necesserily too bad for the stock market. Stocks give you a percentage ownership in real businesses, and as prices increase, these businesses could sell their inventories at higher prices..

]]> By: James http://www.canadiancapitalist.com/historical-dividend-growth/#comment-131935 James Tue, 06 May 2008 01:43:47 +0000 http://www.canadiancapitalist.com/?p=937#comment-131935 The article suggests that the dividend barely beat inflation, but that is misleading as the growth is compared to inflation, not total dividend return. Take a stock with a 4-5% return. One could expect about a 3% real return on this stock. Your real return would grow by .58% per year on top of this. This translates into real growth in wealth over the long term before taking capital gains into consideration. The article suggests that the dividend barely beat inflation, but that is misleading as the growth is compared to inflation, not total dividend return.

Take a stock with a 4-5% return. One could expect about a 3% real return on this stock. Your real return would grow by .58% per year on top of this. This translates into real growth in wealth over the long term before taking capital gains into consideration.

]]> By: DAvid http://www.canadiancapitalist.com/historical-dividend-growth/#comment-131934 DAvid Tue, 06 May 2008 01:13:43 +0000 http://www.canadiancapitalist.com/?p=937#comment-131934 Ahhhhh, but dividends are going to reflect interest rates, and as interest rates have dropped, so have dividends. Any company looking to retain investment through the payment of dividends will adjust the payment to reflect the returns the investor can obtain elsewhere in the market. The trick, as has been stated here is to find a company that not only increases its dividend, but also increases in value. One small holding bought 20 years ago at $4.16, is now worth about $30.00 it has increased its dividend each year since, on average 7% , and just declared it's 2008 dividend to be $1.00. So, if my math is correct, this stock has increased a nominal 36% annually, and now pays about 24% on my initial investment. Is this the type of stock OxCC would consider for his basket? DAvid Ahhhhh, but dividends are going to reflect interest rates, and as interest rates have dropped, so have dividends. Any company looking to retain investment through the payment of dividends will adjust the payment to reflect the returns the investor can obtain elsewhere in the market. The trick, as has been stated here is to find a company that not only increases its dividend, but also increases in value.

One small holding bought 20 years ago at $4.16, is now worth about $30.00 it has increased its dividend each year since, on average 7% , and just declared it’s 2008 dividend to be $1.00. So, if my math is correct, this stock has increased a nominal 36% annually, and now pays about 24% on my initial investment. Is this the type of stock OxCC would consider for his basket?

DAvid

]]> By: Canadian Capitalist http://www.canadiancapitalist.com/historical-dividend-growth/#comment-131889 Canadian Capitalist Mon, 05 May 2008 18:06:15 +0000 http://www.canadiancapitalist.com/?p=937#comment-131889 oxCC: "Did the authors look at dividend yields over the same time period?" They did. And yes, not only are dividend yields much lower today, the percentage of stocks paying a dividend is far smaller as well. However, in determining dividend growth, they look at how the amount of dividends is growing over time. FJ, DGI: "When people are talking about REAL returns I always look the other way for some reason or another." I disagree. Real returns matter a great deal as inflation is the biggest enemy of the long-term investor. "yield is lower" - Good point FJ. The book refers to this paper by Fama and French titled "Disappearing Dividends". It's next on my reading list: <a href="http://papers.ssrn.com/sol3/Delivery.cfm/000105400.pdf?abstractid=203092&mirid=2" rel="nofollow">Link</a> oxCC: “Did the authors look at dividend yields over the same time period?”

They did. And yes, not only are dividend yields much lower today, the percentage of stocks paying a dividend is far smaller as well. However, in determining dividend growth, they look at how the amount of dividends is growing over time.

FJ, DGI: “When people are talking about REAL returns I always look the other way for some reason or another.”

I disagree. Real returns matter a great deal as inflation is the biggest enemy of the long-term investor.

“yield is lower” – Good point FJ. The book refers to this paper by Fama and French titled “Disappearing Dividends”. It’s next on my reading list:

Link

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