6 Notable Dividend Investing Quotes

Initially revealed on December twenty fourth, 2022 by Nikolaos Sismanis

Up to date on December thirteenth, 2023

Right here at Certain Dividend, we’re keen on dividend shares, significantly shares with lengthy monitor information of consecutive annual dividend will increase.

We imagine that shares just like the Dividend Aristocrats, an elite class of 68 S&P 500 shares with 25+ years of successive dividend hikes, have the potential to outperform the market over the long run – particularly throughout unsure instances within the markets.

The necessities to be a Dividend Aristocrat are:

Be within the S&P 500
Have 25+ consecutive years of dividend will increase
Meet sure minimal measurement & liquidity necessities

There are at the moment 68 Dividend Aristocrats. You possibly can obtain an Excel spreadsheet of all 68 (with metrics that matter equivalent to dividend yields and price-to-earnings ratios) by clicking the hyperlink beneath:

On this article, we have a good time dividend-growth investing by sharing and discussing a number of the most well-known dividend-related quotes informed by well-known personalities within the investing world. They’re nice to learn and examine and bear fantastic knowledge and perception.

“Dividends will not be the one path for a person investor’s success, but when there’s a greater one, I’ve but to search out it“

– Josh Peters

On this quote, Josh Peters means that amassing dividends from investments will be an essential attribute of a person investor’s success. The concept expressed right here is that amassing dividends is a reliable and efficient approach for particular person buyers to earn a return on their investments.

The truth is, Mr. Peters means that dividends make for the last word route for buyers to construct wealth over time. It’s simple to belief his phrases, contemplating he has written among the best dividend-investing books of all time, The Final Dividend Playbook.

Dividends can present a predictable supply of money movement, and thus, they are often exceptionally helpful for many who wish to construct wealth over the long run.

“Are you aware the one factor that offers me pleasure? It’s to see my dividends coming in.”

– John D. Rockefeller

John D. Rockefeller was America’s first billionaire, with a fortune price about 2% of the nationwide financial system. In 1913, his private wealth was estimated to be round $900 million, or about 3% of the nation’s GDP of $39.1 billion that yr.

Now, to say that dividends are the “solely” approach one will get pleasure can be irregular, to say the least. Whether or not Mr. Rockefeller’s phrases are true or only a approach for him to convey the significance of dividends by means of this exaggerated assertion, the purpose stays the identical: Dividends are a good way to construct wealth.

When an organization pays, and even higher, will increase its dividend funds, it may possibly sign that its future outlook stays constructive and that administration is assured in its capability to maintain producing earnings. Thus, common dividend will increase, generally, is usually a cheerful signal for buyers, as they will not directly point out a possible for an upsurge within the worth of the corporate’s inventory (i.e., constructing wealth over the long run.)

“A cow for her milk, a hen for her eggs, and a inventory, by heck, for her dividends“

–  John Burr Williams 

On this quote, John Burr Williams makes use of the analogy of a cow, a hen, and a inventory as an instance the significance of dividends for buyers. Simply as a cow is effective for the milk it produces and a hen is effective for the eggs it lays, a inventory is effective for the dividends it pays.

In different phrases, shares don’t actually have worth until buyers can obtain an actual, tangible return on their funding by means of common payouts. The assertion additionally implies that non-dividend-paying inventory will be fairly extra speculative, as the shortage of dividends could make it considerably harder for buyers to evaluate a inventory’s future whole return prospects.

“The very consideration we place on rising dividends places us squarely within the place of ‘house owners’ of an organization, of true buyers who perceive {that a} satisfying and affordable return from a inventory funding isn’t a present of the market or luck or the consequence of listening to some market maven, however it’s the logical and inevitable results of investing in an organization that’s really doing properly sufficient, in the true world, to each pay dividends and to extend them frequently“.

– Lowell Miller

Lowell Miller is not any stranger to the investing world. He has written a wonderful e-book titled The Single Greatest Funding: Creating Wealth with Dividend Progress, through which he urges potential buyers to keep away from listening to the noise diverting the markets however moderately allocate their cash to dividend-paying shares that supply steady returns and lowered threat traits.

His quote emphasizes the importance of considering like a enterprise proprietor when holding a inventory, which will be important for 3 key causes:

Mr. Siegel’s quote primarily factors to the truth that investing in dividend-paying shares is usually a appropriate technique within the occasion of inflation – and through highly-inflationary environments generally. This theme is extra related than ever, as inflation stays fairly elevated, regardless of unwinding these days. The annual inflation price within the U.S. stood at a lofty 7.1% in November of 2022.

Inflation is essentially a continuing enlargement within the common value degree of products and providers in an financial system over time. And since dividend-paying shares are actual belongings paying out actual, tangible belongings (money or inventory), they will present a gradual supply of revenue that may help in mitigating the impact of climbing costs.

A very good instance right here consists of client staple shares, like The Procter & Gamble Firm (PG), Colgate-Palmolive Firm (CL), and PepsiCo, Inc. (PEP), which have managed to extend the costs of their items by a price that is kind of equal to the speed of inflation these days. This is because of their extremely inelastic items as they comprise family necessities that customers have a tendency to purchase whatever the underlying state of the financial system.

Subsequently, Mr. Siegel’s quote additionally signifies that reasonable inflation may even be a good issue for firms, because it may give them pricing energy, which may end up in their belongings appreciating in worth.

“I imagine non-dividend shares aren’t way more than baseball playing cards. They’re price what you may persuade somebody to pay for it.”

– Mark Cuban

On this quote, Dallas Mavericks proprietor Mark Cuban means that the worth of non-dividend shares is subjective. If a inventory doesn’t pay dividends, it’s far more problematic to worth them, making it exhausting to inform whether or not you’re paying a good value when shopping for them.

The first purpose that non-dividend-paying shares could also be tougher to worth is that they don’t provide a predictable revenue supply like dividend-paying shares. Which means it may be tougher to find out the worth of non-dividend-paying shares based mostly on conventional valuation strategies, such because the dividend low cost mannequin, which is often used to worth dividend-paying shares.

Non-dividend-paying shares may also be tougher to worth than dividend-paying shares as a result of their worth is predominantly helmed by the corporate’s progress potential, which will be powerful to foretell. For that reason, such shares are extra delicate to market fluctuations and general extra risky and speculative than dividend-paying shares, as Mr. Cuban suggests.

Ultimate Ideas

All these quotes we mentioned stress one factor: the significance of dividends when investing. Amongst different factors, they train us that dividends are a vital contributor to a inventory’s whole return, together with their function within the appreciation of the inventory value and the revenue they generate.

The quotes additionally underscore the importance of dividends in inflationary environments, their energy to assist buyers worth shares extra precisely, and that additionally they expose whether or not an organization is in a wholesome monetary place.

In our Certain Evaluation Analysis Database, we at the moment cowl greater than 830 securities, together with all these that includes superior dividend progress streaks, such because the Dividend Aristocrats (25+ years of dividend will increase) and Dividend Kings (50+ years of dividend will increase).

In case you are all in favour of discovering extra high-quality dividend progress shares appropriate for long-term funding, the next Certain Dividend databases shall be helpful:

The most important home inventory market indices are one other strong useful resource for locating funding concepts. Certain Dividend compiles the next inventory market databases and updates them month-to-month: