Welcome to the launch of the American Dividend Investor!
Purpose of this Blog
This blog was created to educate and inform individual investors about both the benefits of a dividend growth investment strategy as well as provide them with a thorough analysis of individual dividend paying American securities.
It is the hope of the authors that this site will become a resource for both novice and experienced investor alike and will allow readers to gain the tools, resources and knowledge necessary to build their own successful dividend paying portfolios.
What’s So Good About Dividend Based Investing Anyways?
1. It’s common knowledge that over the last 100 years stocks have returned an average of 10%. However, what’s not revealed in that 10% figure is that 50% of the total return consists of dividend.
2. A growing dividend is usually a good indicator that a company is healthy. Annual dividend increases indicate that the executive and director insiders are sufficiently confident in the long term prospects of the business to payout their earnings as dividends.
3. Trading costs are reduced as minimal trading is required in a dividend growth portfolio.
4. Annual dividend growth can protect your income stream against inflation. Additionally, companies with a history of increasing their dividend can usually pass much of the price inflation on to their customers.
5. The share price of the company usually increases with the dividend (ie-you don’t see many high quality blue chips yielding more than 4% because the share price increases with the dividend)