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Strategies & Market Trends : Dividend investing for retirement
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From: chowder11/5/2010 9:39:55 AM
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I am in the process of focusing more on the dividend growth rate (DGR) than the immediate yields.

When I look for a "dividend growth stock", I want the yield plus the 5 year dividend growth to total above 10%. Therefore, I can accept a lower yield of 2.2% if the dividend growth rate is 14.8% giving me a total return of 17% ... especially since those dividends are being reinvested.

Here is a list of the companies I'm looking to add in the coming weeks:

BDX ... yld 1.9% ... 5yr DGR 15.33% ... Total Return ... 17.23%
MDT ... yld 2.4% ... 5yr DGR 19.33% ... Total Return ... 21.73%
PEP ... yld 2.8% ... 5yr DGR 13.80% ... Total Return ... 16.60%
MKC ... yld 2.3% ... 5yr DGR 10.21% ... Total Return ... 12.51%
WM .... yld 3.4% ... 5yr DGR 09.42% ... Total Return ... 12.82%
UTX ... yld 2.2% ... 5yr DGR 14.80% ... Total Return ... 17.00%
GD .... yld 2.4% ... 5yr DGR 16.16% ... Total Return ... 18.56%

I'll continue to add some higher yielding companies as well, but the focus is going to be on "Total Return".

ED, for example, although a high yielding company with a long history of raising dividends, is not a "Total Return" company under my current criteria.

ED ... yld 4.7% ... 5yr DGR 0.86 ... Total Return ... 5.56%

For my purposes, Total Return does not include capital gains from share price. I mean it to be the immediate yield plus the annualized rate of growth going back 5 years.
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