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Tag: Dividends

Income Investing With Low Payout Ratios

Income Investing With Low Payout Ratios

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Dividends are the bread and butter of investing. If you don’t have dividend stocks in your portfolio, you’re holding yourself back. According to credit rating agency Standard and Poor’s, over the last 80 years dividends have been responsible for 44% of S&P 500 returns. Between 1929 and 2012,  2012, an investment in the S&P 500 would have returned 5.2% per annum excluding income but 9.4% including dividend distributions. When you compound the additional 4.2% of extra returns over the long term,…

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Should You Buy A Company After A Dividend Cut?

Should You Buy A Company After A Dividend Cut?

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First published at ValueWalk.com Should you buy a company after it has cut its dividend? That’s the question Morgan Stanley’s analysts have tried to answer in a European Equity Strategy research note sent to clients today and a reviewed by ValueWalk. Morgan’s research has been prompted by renewed investor interest in dividend cuts. Against a depressed earnings base, the market’s dividend payout level looks high in a historical context and the median stock’s payout ratio is close to a 20-year…

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If You Want Growth, Avoid Dividends

If You Want Growth, Avoid Dividends

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In my experience, there is one big difference between the equity markets of the UK and the US: dividends. For example, in the UK it’s pretty easy to find a large-cap stock with a dividend yield of more than 5%. A quick screen for companies with a market cap. in excess of £5bn that yield of 5% or more returns 12 results in a universe of 2733 stocks. More than half of these are FTSE 100 constituents. The FTSE 100’s average…

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