07-04-2014, 11:44 AM
I've tried this kind of two-way categorization and it doesn't work very well, there are too many exceptions. For example, there are a lot of companies that are neither high growth nor high yield, but are low risk, which you buy for "blue chip" value. There are also stocks that can be considered "high yield, high growth, high risk" such as SDRL, or OHI as rnsmth pointed out. IMHO, the individual stock forum is better not broken up into categories. It's easier and more fun the way it is.
That said, my portfolio is actually broken down into four categories:
High Yield (> 5%) - Any high yielding stock regardless of projected growth
Balanced (2% - 5%) - Most blue chip dividend growth stocks should fall into this profile.
Growth (0%-2%) - This can include new dividend growers, maturing companies with accelerated dividend growth and payout ratios, and non-dividend paying companies with a track record of strong earnings growth.
Speculative (0%) - Companies with a good story but negative, non-existent or unreliable earnings to date
Okay, 3 categories if we're strictly talking about dividend growth. It works well enough that I'm sticking with it, and gives me a way to think about how I'm managing risk and income. Currently I'm invested about equally in the first 3 categories, plus a sliver of the fourth. However, there are still situations where the categorization feels forced.
That said, my portfolio is actually broken down into four categories:
High Yield (> 5%) - Any high yielding stock regardless of projected growth
Balanced (2% - 5%) - Most blue chip dividend growth stocks should fall into this profile.
Growth (0%-2%) - This can include new dividend growers, maturing companies with accelerated dividend growth and payout ratios, and non-dividend paying companies with a track record of strong earnings growth.
Speculative (0%) - Companies with a good story but negative, non-existent or unreliable earnings to date
Okay, 3 categories if we're strictly talking about dividend growth. It works well enough that I'm sticking with it, and gives me a way to think about how I'm managing risk and income. Currently I'm invested about equally in the first 3 categories, plus a sliver of the fourth. However, there are still situations where the categorization feels forced.