The ABCs Of Dividend Investing

In the early 1990s, we restructured our main dividend investment strategy away from a portfolio focused primarily on high dividend yielding stocks with modest dividend growth into a portfolio comprised of three distinct types of dividend stocks. As a result of this shift, we have been able to create a portfolio whose combination of dividend yield and dividend growth performs well regardless of market conditions.

Sub-portfolio A is comprised of stocks with average dividend yields and above-average dividend growth. Sub-portfolio B is just the opposite of sub-portfolio A. B stocks are those with an above-average dividend-yield and with a dividend growth rate at about the rate of inflation. Sub-portfolio C is full of the crown jewels. The companies in this portfolio have a higher-than-average dividend yield in combination with average or above average dividend growth rate.

Source: Seeking Alpha

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