Welcome to the forum for Dividend Growth Investing discussion on Seeking Alpha. A new article is posted every two weeks as a space for sharing of ideas, discussing concepts, and digging deeper on DGI. All previous blogs are listed in chronological succession on the main chat page.
As promised and with your valued feedback, we are publishing a new version of the article with some changes to make it more engaging. The structure of the article will now include a response from one of you in the community regarding your thoughts on DGI.
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More on Dividend Growth Investing:
We financial writers are teachers, of sorts. Let me be quick to clarify that this doesn’t mean we are always right or are smarter than anyone else. Intelligent comments on my articles frequently demonstrate that. It is humbling to remember that the collective knowledge of my readership is vastly superior to my own. In any case, when your line of work involves putting out content for general audience consumption, there is very often the temptation to perform.
One of the beauties of being a dividend investor is that you actually cheer whenever the market beats down the stock price of companies that you own. This is because, as a dividend investor, I am focused primarily on the income that my investments generate for me. The performance of the stock price in the near term means little, and in fact, it benefits me when it drops because then I can buy more shares of the company at a higher yield, thereby increasing my passive income stream even faster.
US equity markets declined for the fourth week in the past five – while benchmark interest rates tumbled to two-month lows – on a frenetic week of geopolitical headlines and economic data indicating a sluggish start to 2025. The Atlanta Fed’s updated GDPNow forecast indicated a -1.5% contraction in first-quarter U.S. economic growth – down sharply from +2.3% in the prior week. While much of this plunge was attributable to a surge in net imports as retailers stockpiled goods ahead of anticipated tariffs, there were some evident “cracks in the consumer” in PCE data, which showed the first decline in personal spending in two years, consistent with recent survey data showing a dip in consumer and business sentiment in January and early February.
As most of my regular followers know, I love investing in high-yield stocks because they are generally much easier to value. Unlike growth stocks, where you need to count on the company sustaining high-growth rates well into the future to deliver attractive returns, high-yield stocks simply need to sustain their payouts and potentially support that with low to mid-single-digit annualized earnings per share growth—depending on how high the yield is—to generate strong total returns.
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