The Power Of Dividend Growth

Today, I’m sharing why dividend growth is the most important factor for long-term dividend investors.

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Timestamps:
The Power Of Dividend Growth: 0:00
The Model: 1:21
Case 1 (Low Yield & High Growth): 1:40
Case 2 (Avg Yield & Avg Growth): 3:49
Case 3 (High Yield & Low Growth): 5:23
Why It Matters (The Takeaways): 7:03

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Dividend Growth Investing provides the ability to create cash flow, without selling your position in a stock. This type of investing has a strong compounding effect when dividends are being reinvested back into your holdings. Over time, Dividend Investing can be your pathway to financial freedom!

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Disclaimer: This is my opinion and not to be considered financial advice

#Dividends #DividendStocks #DividendInvesting

[NASSIMAMEUR-ch]

As always, a great analysis. Newcomers often wonder if it's too late to navigate the financial market, but the market is always unpredictable. Trading has more advantages than simply holding, so it's important to learn before diving in. Active trades are necessary to ride the market's waves. Thanks to Loraine Souvenir’s insights, daily trade signals, and my dedication to learning, I've been increasing my daily earnings. Kudos to the journey ahead!

[RS-lwcd]

This is a great video for true, long term dividend growth investors. This point is badly missed by most youtubers that create content on dividend investing. They look at the short term even though they are young (and, assuming they are long term investors). These type of dividend investors are chasing yield, and are not envisioning what would make them the most money and most income over the long term. Most people do not take into account is the importance of dividend growth. You must remember that a stock with a small dividend may still be paying a small dividend percentage-wise as time goes by even if it is increasing its dividend significantly, as long as the stock is appreciating at a high rate. So, even if a stock has a small dividend percentage-wise, but is growing both the dividend and capital appreciation, over time, the dividend paid will be higher and the capital appreciation will be greater than a stock that has a higher initial dividend with a slower dividend growth rate and slower capital appreciation over time. This has a similar impact as compounding interest. It is compounding dividend growth.

[TradingSquareXTX]

You should make a video on the reinvented dividends of Verizon compared to Visa. I am not sure that Visa wins if you reinvent in both cases

[VictorSanchezVS]

Yeah but, no way for sure to know visa will keep that dividend growth rate for over 20 years.
Correct me if I'm wrong, but if state appreciation also soars at a great rate (say 10% annually), wouldn't it take way more capital to have enough shares to live off of the dividends?

[mjss]

I entered retirement with most of my equity investments in high yield, lower dividend growth so my base income was higher, high enough that I reinvest around 25% of the dividends back into equities. Those reinvested dollars are very highly skewed towards low paying but quickly rising dividend payers in order to start to accelerate our spendable income.

It would have been more ideal to have retired with more invested i the first place, but I am still able to utilize both strategies with my preference being the lower payers but increases double that of inflation or each year. Seems to be working out well so far especially when a one of the stocks has a larger bump than normal or a special dividend.

[Arachne]

Only about 4 years into my investing journey and still young enough. Definitely did the typical investor thing seeking out high yields to begin with and have slowly transitioned to moderate and high growth; which, has resulted in a yield that floats between 3-3.5%, but average dividend growth rate over the last two years has been a little over 14% in my portfolio. Loving the long term outlook. Has been difficult seeing my annual dividend flatline in the transition, but I know the curve in a decade or two is gonna be insane.

[serioserkanalname]

Didnt you forget the DRIP (Not talking about your outfit, I mean dividends buying more shares lol)?
I remember once doing some back of the napkin calculation about when Visa would catch up to Altria in Portfolio Value and income and Visa wouldnt come close to Altria for a very very long time because Altrias dividends buy more Altria shares very quickly.

[gunfu]

By your logic of pure optimism, at some time in the very distant future, the dividend yield can theoretically reach a gazillion percent. I wonder what are the factors you use to assume indefinite dividend growth for the next 30 years. Probably the finance industry by that time would also have serious disrupters to the traditional business model.

[Lawyerup]

Thank you for the video. As I am 10-15 years away from calling it quits I’m probably more of an income investor ( I target the 4.5 - 8% yield, 3 percent and higher dividend growth kinds of stocks) rather than a true dividend growth investor. My question is … are there any companies out there with a 30 year history of raising their dividends by 15-20 percent per year ? Is it realistic to think I can buy 10k of Visa today and expect 30 years of 15-20% dividend growth ?

[rfbthree]

Ok, now redo all the calculations while reinvesting the dividend. That’s the only fair comparison.

[bakit]

I do not agree. With that mindset, does it mean you only buy once and never buy again og the same share ever again. Also you can't guarantee 30years of growth.
But it's less risky and a bit more guaranteed, if you have a higher yield and get them every quarter. And then you can buy more shares sooner

[B_or_not_B]

I bought AVGO during the 2020 crash. Currently I’m running at 13.39% yield on cost.

[trevor]

Good video - I like your channel. The only thing I’d recommend is discounting your cash flows. Going out 30 years is a long time, and a dollar today is worth quite a bit more than a dollar that far out.

[KingDavid]

To keep the assumption that the cagr dividend stays the same is misleading, the dividend increase should be logarithmic and then we can see the true compound dividends

[glennshoemake]

When I compare V with AVGO on total return on a 1, 3, 5 year basis, AVGO is the clear winner by far. V is a much more mature company while AVGO is a growing tech company.

[Mark_Dividends]

It would be interesting to see how the reinvesting compounding would affect this. As you are typically buying many more shares early on with the higher yielders.

[steveshaver]

I learned the hard way that even dividend “kings” are not always dependable (I. e., LEG). So, I’m focusing more on dividend ETFs.

[ChrisCash]

While I started with dividends and was pulling in pretty good $$$ I changed strategy to growth primarily. Up over 3x what the dividends estimated would have been. No options. Probably changeing it back to dividends after I hit the 1mill mark.

[rd]

Give me high Yield with low growth like VZ any day over low Yield with high "growth" like AAPL any day of the week and twice on the weekend. Not interested in hoping the "growth" of the dividend continues long enough to catch up to something that is Yielding 6.5%. The key to this video is TIME. Do you want to get paid and have it grow slower with the possibility of it growing faster at some point in the future OR do you want to get paid almost nothing to start and get paid (maybe) better over time "If" things go to plan. No thanks, i have no ability to predict the future and would rather collect my cash now with what i know already exists. If you think you can always pick the Visa out of any stock group and you have that ability to predict the future, be my guest and go get that cash, it's all yours. I will be holding VZ and enjoying my current payout on my cash invested.

[tahlglass]

Great comparison! Like others have mentioned, I would like to see how these examples work with reinvesting dividends and growing stock prices.