Is Dividend Growth Investing the Right Strategy?

Is dividend growth investing the right strategy for everyone? For me, I like it because I can combine income and capital appreciation together. I like to find low yield stocks and low payout ratio (I don’t reach for yield), but have high likelihood of increasing dividends in the future. If you have a low payout ratio, you’d assume there is room for increasing the dividend.

What do you think? Should you invest in dividend growth stocks? Yes or no?

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No.

It’s certainly fine for some people though. I err to the side of dividends being fairly irrelevant but certainly wouldn’t argue a differing point of view.

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It’s all about your risk tolerance, psychological make up, age, circumstances …so many things.

My portfolio is about 20% growth, 20% ETF’s and 60% dividend stocks. A ratio I’m quite content with…again taking all of the above into consideration.

If you are however swaying towards dividends, go on YouTube and watch Joseph Carlson. His portfolio is 100% transparent and he has a compelling argument for why he chooses that style.

All the best :ok_hand:t3:

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I am watching Joseph Carlson and this is the main reason i am in to investing, I choose to follow the dividend investing strategy since is very simple and it does not require a lot of effort. And is basically almost stress free since you just lay back and wait to collect the profits of your investments.

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Just watching some of his videos now - very impressed with his approach and his clear explanations of strategy. I am tempted to completely reconsider my investment strategy to a dividend growth one.

That M1 Finance platform looks very good.

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Agreed, Freetrade can learn a lot from M1

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I completely agree. Some of the automated stuff on M1 finance is brilliant.

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Does anyone know what sites have the same level of detail for UK stocks as Seeking Alpha? Particularly the dividend history.

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M1 Finance seems to be the preferred investing platform with the US YouTube investing channels.
It does look very good.
I like the total dividends shown as an option on the gain graph.
Just subscribed to the Joseph Carlson channel. Thanks :blush:

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Been researching ETFs with a decent yield. VHYL yield is 3.49% and VEUR is 3.32%.
What are peoples thoughts on why it is better to directly invest in the stocks than an ETF with these stocks making up the portfolio?

You should look into the website Simplywallstreet. It has got some great details about companies like how much debt they have, short term and long term assests, etc. You get a 15 day free trial and after that you can only look at 10 companies a month.

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Another guy to look out for is Andrei JIkh on YouTube. He is a dividend investor and has good content.

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I read somewhere that 95% of stock market gains since its inception are purely through dividends. I like dividend investing though because it doesn’t care what happens in Iran that causes the share price to dip down. If revenue is unaffected, you will still be paid a dividend.

That just can’t be true. You must have mistaken that number somehow.

In a way it does sound possible, because with dividends you buy more stocks that then give you dividends. Compare that to just owning the stock which then only relies on buying and selling the stock to realise a gain. I could be wrong however in that “95%” stat.

You still need good value stocks because if a company announces poor results you can guarantee the dividend won’t cover the loss on the value of the share. So it is about finding a share that will grow & pays a divi. The divi doesn’t ‘hedge’ against a loss in value of the stock.

This is why decent yielding ETFs are good. You are spreading the risk across a broad basket of stocks whilst getting the growth and an income from the divis.

But as I’ve said before it’ll be interesting to see how ETFs do in a downturn.

My only concern particular for new and inexperienced investors (but also myself) is that the markets have preformed very well over the last couple of years and when you look at the charts most of the blue chips have a similar pattern :chart_with_upwards_trend::arrow_upper_right:. I know everyone keeps saying it but it can’t go on forever and at some stage things will start to go :chart_with_downwards_trend::arrow_lower_right: and that’s when the fun really starts.

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But :chart_with_downwards_trend: is a good opportunity to buy more shares at a discount :male_detective:

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Each to their own. I’ll be going with dividend stocks as I wont pay tax on the div income and still have an asset that can appreciate. You guys don’t know how lucky you are with your ISAs and higher capital gains allowance. In Ireland we don’t have ISA’s and the capital gains allowance hasn’t been changed in over 20 years. Its €1270 the conversion rate of 1000 Irish pounds to Euro from the changeover many moons ago!!! Another in a long list why I’m leaving :rofl:

Edit: ETF’s obviously as part of a balanced diet but for 2020 mostly div stocks

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@Shane, how do you not pay tax on dividends? Thought in Ireland it was taxed on your level of income tax rate? Or do you mean the country you are moving to?

@Tony1 Portugal’s NHR Visa No tax on foreign income for 10 years