I have broken my analysis into two parts:
1. Develop a list of stocks which meet my criteria as a good long term dividend growth stock. My number is 20 to 30 max.
- History of dividend payments, min 10 years, most 25 years
- History of dividend growth, 8 of last 10 years, most 20 of 25 years
- Size and stability of the company (ones which I believe will be just as strong in 25 years)
- Find companies in at least five sectors (don't care if all sectors are not covered)
- Yield must be near 3% or higher, would consider less if the dividend growth history is good
- If I was young I'd want companies which offer DRIP & Share Purchase Plans
- Avoid cyclical companies or one's that have not grown the dividend regularly.
* I do even less number analysis the Kerim (no p/e, book value, price to book, 200 day average, BS, IS, Cash flow).
2. Monitor and buy only stocks from the list when they are value priced.
- Compare current price to my Average Cost
- Compare current yield to my overall yield
- Compare current price to a buy price I maintain for each stock
- Watch market conditions to see if a correction is expected, then wait to buy
- Re-invest all dividends.
Rule: “It’s not which stock to buy from my list, but the price I am able to buy it at.”
Example: I believe GE should have been on most dividend growth lists. But in June 2009 it cut the dividend from .31 to .10 cents and it's average price dropped from $35 to $12. Therefore if I still believed in the company at that time, I would have bought more shares during its low $7 to $12 (thereby reducing average cost). The price is up to $27 while the dividend is up to 19 cents.
PG, JNJ & WMT would be on my list as well.
1. Develop a list of stocks which meet my criteria as a good long term dividend growth stock. My number is 20 to 30 max.
- History of dividend payments, min 10 years, most 25 years
- History of dividend growth, 8 of last 10 years, most 20 of 25 years
- Size and stability of the company (ones which I believe will be just as strong in 25 years)
- Find companies in at least five sectors (don't care if all sectors are not covered)
- Yield must be near 3% or higher, would consider less if the dividend growth history is good
- If I was young I'd want companies which offer DRIP & Share Purchase Plans
- Avoid cyclical companies or one's that have not grown the dividend regularly.
* I do even less number analysis the Kerim (no p/e, book value, price to book, 200 day average, BS, IS, Cash flow).
2. Monitor and buy only stocks from the list when they are value priced.
- Compare current price to my Average Cost
- Compare current yield to my overall yield
- Compare current price to a buy price I maintain for each stock
- Watch market conditions to see if a correction is expected, then wait to buy
- Re-invest all dividends.
Rule: “It’s not which stock to buy from my list, but the price I am able to buy it at.”
Example: I believe GE should have been on most dividend growth lists. But in June 2009 it cut the dividend from .31 to .10 cents and it's average price dropped from $35 to $12. Therefore if I still believed in the company at that time, I would have bought more shares during its low $7 to $12 (thereby reducing average cost). The price is up to $27 while the dividend is up to 19 cents.
PG, JNJ & WMT would be on my list as well.