If Adam Smith Were Alive, He’d Be a Dividend Investor

Comments (2)

  1. Mark Schonauer says:

    As an avid reader and dividend investor, I’m struggling to understand why you think HES and ORCL would benefit income investors. At the end of the day, I need income for retirement, and these stocks aren’t paying enough to beat real inflation. Stocks with better yields would be greatly appreciated!


    Alan Gula

    Alan Gula Reply:

    Hello Mark,

    We appreciate your concerns. However, we find that many dividend investors are too focused on current yield. To beat inflation over time, we need to focus on total return. We need a mix of yield, dividend growth and capital appreciation in our portfolios. For example, I talked about chemical companies yesterday http://www.dividendsandincomedaily.com/2014/02/13/chemicals-stocks/ …Dow Chemical (DOW) yields 3.2%, but I think focusing on its dividend is a mistake.

    Our readers are in various stages of their investing careers so we’re trying to give them a wide array of options and be ahead of the curve. Like I said, HES and ORCL are not currently on dividend investors’ radars, and I explained why I think they will be in the future. The point of the article was to get our readers thinking about the profit margins of the various companies they own and whether they have a competitive advantage.

    Hope this helps. Thanks for reading! And keep the feedback coming!


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