The Dividend Mailbox®

The Formula for Dividend Growth Investing

10 snips
Aug 17, 2023
Dive into the world of dividend growth investing and discover a formula with seven key factors for identifying great opportunities. Learn how essential metrics like return on invested capital and management quality play a role in sustainable growth. The hosts analyze Dover Corporation, showcasing its dividend strengths while discussing potential challenges. They emphasize the importance of patience and discipline, reminding listeners that not every company fits the mold for ideal investments.
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ADVICE

Target ROIC for Wealth Building

  • Target at least 10% return on invested capital (ROIC).
  • A 10% ROIC, matching market returns, helps build wealth.
ADVICE

Evaluate Profit Margins

  • Seek steady gross and profit margins or a catalyst for improvement.
  • Consistent margins signal business profitability and a potential moat.
ADVICE

Assess Dividend Payout Ratio

  • Look for a dividend payout ratio consistent with historical averages.
  • This assesses dividend sustainability and growth potential.
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