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Ideas for Income Investors. High Dividend Stocks, Mutual Funds etc.
13 Dividend Growth Stocks with a Good Yield/Growth Mix
Posted by: Dividends4Life (IP Logged)
Date: March 26, 2014 11:16AM
As dividend growth investors we understand the danger of focusing on high yield alone. Many, if not most, high yields are simply not sustainable over the long term. However, we often turn our heads to what can be an equally dangerous metric — high dividend growth rates. Like high yields, high dividend growth rates often are not sustainable. As a company grows and matures, incremental sales and earnings are harder to come by. So what is a good mix of yield and growth?
Consider the following table:
There is no hard and fast rule to what initial yield plus growth rate should equal. To be more conservative you could limit your selection criteria to less than 10%. This of course will lower the future YOC, but highlight stocks that should have a greater chance of performing. As always, a careful evaluation should be performed before buying or selling any stock.
Stocks Discussed: KMB, NU, WPC, NEE, MKC, ADM, KO, SJM, GD, CL, OMI, XOM, CLX,