6 Notable Dividend Investing Quotes

Revealed on December twenty fourth, 2022 by Nikolaos Sismanis

Right here at Positive Dividend, we’re keen on dividend shares, notably shares with lengthy observe information of consecutive annual dividend will increase.

We imagine that shares just like the Dividend Aristocrats, an elite class of 65 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 capital markets.

This concept was confirmed as soon as once more throughout the turmoil equities skilled in 2022. As you possibly can see, the most important S&P 500 Dividend Aristocrats ETF (NOBL) outperformed the S&P 500 and the NASDAQ 100 by a large margin.

On this article, we have fun dividend-growth investing by sharing and discussing among the most well-known dividend-related quotes instructed by well-known personalities within the investing world. They’re nice to learn and examine and bear great 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 seek out it“

– Josh Peters

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

In actual fact, Mr. Peters means that dividends make for the last word route for traders to construct wealth over time. It’s straightforward to belief his phrases, contemplating he has written the most effective dividend-investing books of all time, The Final Dividend Playbook.

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

“Have you learnt the one factor that provides me pleasure? It’s to see my dividends coming in.”

– John D. Rockefeller

John D. Rockefeller was America’s first billionaire, with a fortune value about 2% of the nationwide economic 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 12 months.

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

When an organization pays, and even higher, will increase its dividend funds, it could actually sign that its future outlook stays optimistic and that administration is assured in its capability to maintain producing earnings. Thus, common dividend will increase, normally, generally is a cheerful signal for traders, as they’ll 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 for example the significance of dividends for traders. Simply as a cow is efficacious for the milk it produces and a hen is efficacious for the eggs it lays, a inventory is efficacious for the dividends it pays.

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

“The very consideration we place on rising dividends places us squarely within the place of ‘homeowners’ of an organization, of true traders who perceive {that a} satisfying and cheap 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 truly doing properly sufficient, in the actual 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 ebook titled The Single Greatest Funding: Creating Wealth with Dividend Progress, wherein he urges potential traders to keep away from listening to the noise diverting the markets however slightly allocate their cash to dividend-paying shares that provide steady returns and decreased threat traits.

His quote emphasizes the importance of pondering 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 generally is a appropriate technique within the occasion of inflation – and through highly-inflationary environments normally. This theme is extra related than ever, as inflation stays fairly elevated, regardless of unwinding currently. The annual inflation price within the U.S. stood at a lofty 7.1% in November of 2022.

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

An excellent 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 currently. 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 economic system.

Subsequently, Mr. Siegel’s quote additionally signifies that average inflation may even be a positive issue for corporations, because it can provide them pricing energy, which can lead to their belongings appreciating in worth.

“I imagine non-dividend shares aren’t far more than baseball playing cards. They’re value what you possibly can 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 arduous to inform whether or not you might be paying a good value when shopping for them.

The first motive that non-dividend-paying shares could also be more durable to worth is that they don’t provide a predictable earnings supply like dividend-paying shares. Because of this it may be more durable to find out the worth of non-dividend-paying shares primarily based on conventional valuation strategies, such because the dividend low cost mannequin, which is often used to worth dividend-paying shares.

Non-dividend-paying shares will also be more durable 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. Because of this, such shares are extra delicate to market fluctuations and total 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 educate us that dividends are a vital contributor to a inventory’s whole return, together with their position within the appreciation of the inventory value and the earnings they generate.

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

In our Positive 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).

If you’re keen on discovering extra high-quality dividend progress shares appropriate for long-term funding, the next Positive Dividend databases can be helpful:

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