Dividend Investing

I see many posts on here asking for portfolio critiques. Yes, I have done it, it would seem we all have. I would like to offer some suggestions for those seeking guidance (from what I’ve learned) and even to remind myself.

1) Do not yield chase unless you require the current income 2) Compounding over the long term is really the objective of being dividend investors. It is not a get rich quick scheme. It takes time, but it will be oh so worth it. 3) Dividend growth is a huge factor often overlooked. Yes, a company may have a lower yield when compared to another company. Consider the quality of the company. Take HD for example. They have increased their dividend by 15% over the last year and 16% over the last 5 years. This is basically free raises to yourself for holding an investment. 4) Don’t be concerned with the day to day price fluctuation. It is proven that holding and continually investing will produce the best results. Yes, it is hard to not be emotional and see a drop in prices. If you liked HD at $325, you’ll love it at $300 even more. 5) Even if you don’t add money, you will experience growth over the long term. 6) Look for consistent increases and commitment to dividend payments. JNJ price has increased almost 300% in the last 13 years, however their dividend has increased 650% in that time. 7) Exam the cash flow of the company & the payout ratio. Lower payout ratio could be an indicator of continued dividend increases. 8) Review the balance sheet for assets/liabilities and compare the two. Do they have more liabilities than assets? Probably not a good sign! 9) Not sure where to start? Search Dividend Champions & Aristocrats online and use that as a great initial point.

I’d love to hear what you look for in dividend payers!

I’m not expert – but so hope these things help someone. If anything, this post will be a reminder to me when I need it.