06-07-2014, 05:09 PM
No argument at all with Eric's answer, but thought you might be talking about projecting out a bit further into the future. I'm not sure if this is exactly what you are talking about, but for each stock that I track, I include the following on my spreadsheet (this is for Altria (MO)):
I plug an estimated dividend growth rate into the box -- I'm usually careful to choose a conservative number below the 1 and 5 year dividend growth rate -- and excel spits out the rest. The 2014 base dividend is adjusted for this year's expected raise, which again I guess conservatively.
So if the company meets or exceeds the dividend growth rate that I use, we'll get (at least) the dividend per share amounts shown and the yield on cost assuming today's share price.
I do not attempt to predict a "current yield" for some time in the future, as this will depend on the share price in the future, which is impossible to guess, let alone estimate with any precision. (Of course you could use a historical average dividend yield to reverse engineer a stock price at that yield, but the market rarely cooperates in that manner.)
To get projected income, you just multiply the future dividend amount by the number of shares (though you'd have to adjust the number of shares if you are reinvesting).
I plug an estimated dividend growth rate into the box -- I'm usually careful to choose a conservative number below the 1 and 5 year dividend growth rate -- and excel spits out the rest. The 2014 base dividend is adjusted for this year's expected raise, which again I guess conservatively.
So if the company meets or exceeds the dividend growth rate that I use, we'll get (at least) the dividend per share amounts shown and the yield on cost assuming today's share price.
I do not attempt to predict a "current yield" for some time in the future, as this will depend on the share price in the future, which is impossible to guess, let alone estimate with any precision. (Of course you could use a historical average dividend yield to reverse engineer a stock price at that yield, but the market rarely cooperates in that manner.)
To get projected income, you just multiply the future dividend amount by the number of shares (though you'd have to adjust the number of shares if you are reinvesting).