Minimum Yield Requirements?

[EricL]

I wrote an article today highlighting some high growth companies that some people overlook because of their lower dividend yields.

Don't Let Low Dividend Yields Keep You From Investing In These Great Companies

I own several companies from the list and have done quite well with them in the few years I've owned them. I think any on the list would make good long term investments, although some are a bit overpriced currently.

[Roadmap2Retire]

Nice article, Eric. It is a problem when investors ignore potentially great investments just because of a low starting yield. I have done this myself and missed on some great opportunities simply because the starting yield was < 1%.

I guess it makes more sense now than ever - in this low yield and negative yield environment.

[crimsonghost747]

Good article! I do admit that I also stare at the starting yield, mainly because dividends to me are something that I consider to be sure income. That is of course with companies that can and will continue to pay and hopefully raise their dividend. Then again recently I've gotten my hands on a couple of companies that are just at the very beginning of their dividend history and the yields are low. But I believe in these companies so I think in the long run it's going to work out well.

But thanks for making the article. It's always great to read these and ponder about how this could help with my own portfolio. And as an added bonus found one interesting company in that list of yours. I'll dig deeper into it when I have the time.

[earthtodan]

About half my portfolio is in stocks yielding less than 2%. I've learned to think of dividends as just one way a company makes money for shareholders. I still chase yield in my Roth IRA to capture the tax advantage, but I'll take total shareholder yield (dividends plus buybacks) and growth in my taxable account, even though that makes my total returns subject to market whims in the short to medium term.

Edit: The weighted average yield of my taxable account is 1.3%. The needle may move up a tick when GILD starts paying dividends.

[EricL]

(03-27-2015, 10:24 AM)crimsonghost747 Wrote: And as an added bonus found one interesting company in that list of yours. I'll dig deeper into it when I have the time.

Come on, you aren't going to leave us hanging on which one caught your eye now are you?

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(03-27-2015, 10:33 AM)earthtodan Wrote: About half my portfolio is in stocks yielding less than 2%. I've learned to think of dividends as just one way a company makes money for shareholders. I still chase yield in my Roth IRA to capture the tax advantage, but I'll take total shareholder yield (dividends plus buybacks) and growth in my taxable account, even though that makes my total returns subject to market whims in the short to medium term.

Edit: The weighted average yield of my taxable account is 1.3%. The needle may move up a tick when GILD starts paying dividends.

The vast majority of the stocks I own are in tax sheltered accounts, so I guess I don't take taxes into consideration at all with my picks. I do agree with your strategy though with higher yields in IRA and capital gains picks in taxable account.

In my public portfolio I have 50 stocks, 13 of which are currently paying less than 2%. Current overall yield of the portfolio is 2.83%.

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(03-27-2015, 09:49 AM)Roadmap2Retire Wrote: Nice article, Eric. It is a problem when investors ignore potentially great investments just because of a low starting yield. I have done this myself and missed on some great opportunities simply because the starting yield was < 1%.

I guess it makes more sense now than ever - in this low yield and negative yield environment.

I used to put a higher weight on yield, then came around the realization that I don't need the income for another 25 years so why not try for some capital gains as well. It's in a tax sheltered account, so no worries about paying taxing on gains down the road on capital gains. I can swap out to higher yielding stocks and go on my merry way.

[rapidacid]

(03-27-2015, 01:13 PM)EricL Wrote: I used to put a higher weight on yield, then came around the realization that I don't need the income for another 25 years so why not try for some capital gains as well. It's in a tax sheltered account, so no worries about paying taxing on gains down the road on capital gains. I can swap out to higher yielding stocks and go on my merry way.

I take yet another view, which is to take advantage of companies with higher yields now and max them out to full positions and then use their high payouts to subsidize my purchases in lower yielding, higher growth companies down the road

Been hammering on BP & T last couple weeks and now almost full positions in both. Looking to add to BBL & BNS next.

All stocks mentioned also happen to be near the bottom of their 52 week range

[Dividend Watcher]

I'm an old fart and it still doesn't dissuade me from investing in a low yield, high growth company now and then. Afterall, I'll still have plenty of years left after I retire. It's a matter of balancing the income you need with what you'll need further down the road. I expect by the time RMDs roll around, most of the LYHG issues will be in the process of trading up in yield but we'll wait and see.

Good article, Eric.