Quote:
Originally Posted by philfree
Dividend growth stocks. Just yesterday I read a spiel on a dividend growth stocks subscription with Marc Litchenfeld. It was Larry Kudlow and him. The Oxford Club
Forever Dividends
Here's some key points.
To identify a Forever Dividend stock, you want to see...
A public commitment to raising dividends every year
A high initial yield of double the S&P 500’s average
High growth of the dividend by more than 10% annually
A low payout ratio of 75% or less
And a low cash flow ratio, also of 75% or less.
I didn't subscribe but I found it educational.
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Interesting.
I'll admit that I'm kind of irrationally a fan of dividend stocks. I think some of it is psychological. If I'm having to sell stocks in retirement to fund my lifestyle, that's a retreat in my mind. I'm giving up assets. But if I'm getting dividends, my original asset stays intact. That would help me sleep at night.
I realize that I'm likely giving up some total return, but in a normal market I don't want to find myself selling stocks in a downturn so I can buy a pizza or broccoli. With dividend stocks I won't really care about normal stock market fluctuations so much because I'm not selling the stock.
The kicker this past couple of years is that the markets have been far from normal. Massive drops, big runups, and as I mentioned earlier, stable dividend stocks that immediately lowered their dividend to zero, which screwed over my strategy. But with change comes opportunity, so I'm trying to figure out if there's way to get some of that money back.