Dividends: Slow And Steady Wins The Race

The slow lane to investing success is where you’ll find dividend enthusiast David McCaslin. We live in an investing world where the capital gain is celebrated above all other investing outcomes. But Mr. McCaslin pays more attention to the money his stocks pay him each quarter. Imagine a choice of having your stocks rise 15 per cent over a short period of time or receiving an average 7.5-per-cent increase in the dividends paid by your shares. The answer is a no-brainer for Mr. McCaslin, who retired in 2011 after spending 23 years as a Regina-based pension investment fund manager. “I’ll take the 7.5 per cent any day.”

“My biggest concern is not whether companies I own are going to be up or down 15 per cent next year,” he said. “The most calamitous scenario that I can think of is that one of my stocks would reduce its dividend, or worse yet, eliminate its dividend.” He said a company should have a long history of paying dividends, ideally 10 years or more for large companies. He also seeks a record of not only paying a dividend consistently, but of increasing the payout on a regular basis. “Ideally, you’d like to see annual increases, but this is where some judgment has to come in.”

Source: Globe And Mail

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