Value Investing News

Dividend growth investing in its classic form focuses on identifying solid companies with a long record of growing their dividends each year; and an expectation that they will continue to do so into the future. The focus is not solely on yield but a combination of yield and dividend growth. Often it is the lower yield, higher growth, security that will provide the best return over time.

Readers of this space know that the primary focus of my investing efforts is to build an ever-increasing income income stream by investing in dividend growth securities. This means that often I will choose a lower yielding security with better dividend growth prospects over a higher yielding security. As one that values diversity, I also invest in some high yield securities.

Several companies announced their intent to increase distributions to shareholders. I have separated the dividend raisers of the past week in three groups: dividend achievers, champions and aristocrats; master limited partnerships; and potential dividend achievers

Most casual income investors focus on current yield, which is important. However, if your objective is to build a portfolio of securities with increasing income, then Yield on Cost is an excellent metric to measure your progress.