Dividends can seem pretty boring, however, it’s amazing how they can add up over time. They can have a huge impact on your portfolio results as demonstrated by Jim Penna in Friday’s Special Presentation SOTW. Dividends are one of the three components of VectorVest’s Worry Free Investing philosophy that also includes Capital Appreciation and generating income by Selling Options (covered calls).
When you talk about dividends, it’s not just all about the yield, or at least it shouldn’t be. VectorVest has three exclusive indictors to help you make better choices when analyzing dividend stocks: 1. Relative Safety (RS) – stocks that have a high RS have consistent and predictable financial performance; 2. Dividend Safety (DS) – high DS stocks provides assurance that regular cash dividends will be declared and paid at current or higher rates for the foreseeable future; and 3. Dividend Growth (DG) – stocks that have a high Dividend Growth rate are more likely to increase their dividends on a regular basis, usually annually. Unlike the commonly used ‘dividend payout ratio’ which is just a snapshot in time, both DS and DG use historical dividend payments as the basis for either a high or low rating.
Tomorrow’s Q&A Webinar. If you have questions the exclusive indicators VectorVest uses to analyze dividend stocks, join us tomorrow, Tuesday, June 21 for our regular SOTW Q&A beginning at 12:30 Eastern / 9:30 Pacific. REGISTER HERE.
We’ll take a look at the U.S. Worry Free Portfolio which has an annualized 25% return since 1996 and a CA Worry Free Investing backtest which has an annualized 24% return since VectorVest started in Canada in 2003.
P.S. While today’s rally in North American markets was not unexpected based on Support and Resistance in our major indexes, caution is still advised due to Thursday’s Brexit Referendum. We’ll analyze both CA and US markets tomorrow in Realtime.