Originally posted August 24th, 2020
The two charts below show the long-term compounded dividend and stock price growth for Dover Corp. and Procter & Gamble.
In each case, the long-term trend shows a pattern of consistent annual dividend growth, matched with long-term stock price appreciation.
In the case of Dover, the dividend has compounded at an 8.9% rate of growth, and the stock compounded an even stronger and equally consistent 10.9%. For P&G, the numbers have been 8.5% and 10.5%.
In each instance, we are looking at decades of consistency, stability, and comfort for shareholders.
At our family investment counseling company, these are the type of companies we invest in for clients. Our Master List of potential portfolio companies includes companies with similar long-term records. We do not even consider companies without long-term records of dividend growth.
I have been writing about consistency, stability, and compound growth for five decades, and underpinning every report has been a foundation of dividends.
When you concentrate on dividend growth and stability, you never have to think about capital appreciation. As long as the dividend is growing, capital appreciation will take care of itself, as my charts on P&G and Dover Corp. demonstrate.
So, the easy lesson in second of my “how to invest today” series is to make dividends your password to investing, both now and in future years.
Read Part I here.