Motley Fool Money Dividends 201: The Payout Continues
Jul 16, 2022
Matt Argersinger, a senior analyst at Motley Fool, teams up with guest expert Anthony Schiavone for a deep dive into dividend investing. They discuss the allure of high-dividend stocks and the risks of high-yield traps. The duo analyzes resilient companies like Texas Instruments and Iron Mountain, highlighting their ability to adapt and sustain dividends during market challenges. They also tackle the complexities of investing in stocks like Altria and the potential rewards of reinvesting dividends for long-term growth.
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Compounding Dividends for Young Investors
- Younger investors should consider dividend stocks due to the power of compounding.
- Reinvesting dividends leads to exponential gains over time.
S&P 500 and Dividend Reinvestment
- $1 invested in the S&P 500 in 1930 would be worth $197 today.
- Reinvesting dividends would boost it to $6,430, highlighting compounding's power.
Coca-Cola's Compounding Power
- A single $40 Coca-Cola share from its 1919 IPO, with reinvested dividends, would be worth $21 million today.
- It would also generate $600,000 in annual dividend income.