08-25-2013, 11:54 AM
I was fooling around with a dividend calculator the other day, just looking at a few of my stocks and making some projections. I'm sure there are much more comprehensive calculators out there but this one serves the purpose.
http://www.buyupside.com/calculators/div...ulator.php
I tried to be reasonable with the DG rates, no need to kid myself with ridiculous unattainable numbers. Long term projections are always iffy because you have to make a few assumptions and they may not play out. Still it's kinda fun to play "what if" with a few of your stocks
I used a $10k investment in each stock, the current yield and the last dividend raise as the growth rate, no new money, just a straight reinvest buy and hold. The calculator also assumes the stocks were in an IRA/401K, ie, no money coming out, no taxes. I looked at the annual income figures for 5, 10 and 20 years out.
I lowered WAG's DGR to 12% but that is still too high for a 20 yr projection but might be OK for 10 years out. CVX and KMI might be a little high too. T, SO and LEG DGR's should be able to be maintained. Anyway you can plug in your own numbers and assumptions and get your own picture of what the annual dividends might be.
T 5.25% yield, 2.3% DGR 5yr-$730, 10 yr-$1,103, 20 yr-$2,806
XOM 2.88% yield, 10.5% DGR 5yr-$549, 10yr -$1,202, 20yr-$10,785
MO 5.60% yield, 9.1% DGR 5yr-$1,134, 10yr-$2,872, 20yr-$43,627
SO 4.81% yield, 3.6% DGR 5yr-$704. 10yr-$1,130, 20yr $3,477
CVX 3.35% yield, 11.1% DGR 5yr-$673, 10yr-$1,604, 20yr -$94,211
WAG 2.58% yield, 12% DGR 5yr-$521, 10yr-$1,215, 20yr-$13,958
LEG 4.04% yield, 3.6% DGR, 5yr-$567, 10yr-$860, 20yr-$2,274
KMI 4.30% yield, 10% DGR, 5yr-$857, 10yr-$2072, 20yr-$27,363
The first thing that jumped out at me is why in the hell would anybody with 10-20 years left until retirement even "sniff" at stocks like T, SO and LEG? If the stocks with the big 20 year pay outs did even half of their projections they still CRUSH stocks like T, SO and LEG.
A more reasonable/generic way of looking at it......
$10K, 5.0% yield, 3% DGR, 5yr-$715, 10yr-$1,117, 20yr-$3,153
$10K, 3.0% yield, 8% DGR, 5yr-$509, 10yr-$962, 20yr-$5,082
$10K, 2.5% yield, 10% DGR, 5yr-$457, 10yr-$802, 20 yr-$$6460
Investors with many years until they need the dividend income might want to put a lot more weight on dividend growth than current yield. High current yields are nice for people that spend the income, but they won't do the guy with time on his side much good simply because it's a now or later proposition, ie, when do you want "more money" to occur?
Now I'm not saying this is the holy grail or to go all in on the concept, but when you think about it, wouldn't a 30 year old investor have to be nuts to own T in an IRA?
Of course there's many more things to consider when screening stocks, but depending on your time horizon the right combination of yield and DG can make a big difference.
http://www.buyupside.com/calculators/div...ulator.php
I tried to be reasonable with the DG rates, no need to kid myself with ridiculous unattainable numbers. Long term projections are always iffy because you have to make a few assumptions and they may not play out. Still it's kinda fun to play "what if" with a few of your stocks
I used a $10k investment in each stock, the current yield and the last dividend raise as the growth rate, no new money, just a straight reinvest buy and hold. The calculator also assumes the stocks were in an IRA/401K, ie, no money coming out, no taxes. I looked at the annual income figures for 5, 10 and 20 years out.
I lowered WAG's DGR to 12% but that is still too high for a 20 yr projection but might be OK for 10 years out. CVX and KMI might be a little high too. T, SO and LEG DGR's should be able to be maintained. Anyway you can plug in your own numbers and assumptions and get your own picture of what the annual dividends might be.
T 5.25% yield, 2.3% DGR 5yr-$730, 10 yr-$1,103, 20 yr-$2,806
XOM 2.88% yield, 10.5% DGR 5yr-$549, 10yr -$1,202, 20yr-$10,785
MO 5.60% yield, 9.1% DGR 5yr-$1,134, 10yr-$2,872, 20yr-$43,627
SO 4.81% yield, 3.6% DGR 5yr-$704. 10yr-$1,130, 20yr $3,477
CVX 3.35% yield, 11.1% DGR 5yr-$673, 10yr-$1,604, 20yr -$94,211
WAG 2.58% yield, 12% DGR 5yr-$521, 10yr-$1,215, 20yr-$13,958
LEG 4.04% yield, 3.6% DGR, 5yr-$567, 10yr-$860, 20yr-$2,274
KMI 4.30% yield, 10% DGR, 5yr-$857, 10yr-$2072, 20yr-$27,363
The first thing that jumped out at me is why in the hell would anybody with 10-20 years left until retirement even "sniff" at stocks like T, SO and LEG? If the stocks with the big 20 year pay outs did even half of their projections they still CRUSH stocks like T, SO and LEG.
A more reasonable/generic way of looking at it......
$10K, 5.0% yield, 3% DGR, 5yr-$715, 10yr-$1,117, 20yr-$3,153
$10K, 3.0% yield, 8% DGR, 5yr-$509, 10yr-$962, 20yr-$5,082
$10K, 2.5% yield, 10% DGR, 5yr-$457, 10yr-$802, 20 yr-$$6460
Investors with many years until they need the dividend income might want to put a lot more weight on dividend growth than current yield. High current yields are nice for people that spend the income, but they won't do the guy with time on his side much good simply because it's a now or later proposition, ie, when do you want "more money" to occur?
Now I'm not saying this is the holy grail or to go all in on the concept, but when you think about it, wouldn't a 30 year old investor have to be nuts to own T in an IRA?
Of course there's many more things to consider when screening stocks, but depending on your time horizon the right combination of yield and DG can make a big difference.