If you buy a stock that eventually increases its dividend by 100% in the coming years, you’re going to double your money or better as that happens. Find a payout with 200%, 300% or even 500% upside? Then we have a secure way to total returns up to 500%.
(We’ll discuss five generous payers in a minute, with price upside up to 500%.)
Why does dividend growth matter so much more than earnings, sales or even cash flow growth? Well, we income investors buy a stock for one of three reasons:
- A meaningful current yield
- The potential for a higher yield-on-cost over time, and/or
- Price gains.