Just got promotion mailing for their new dividend investing portfolio and newsletter. $199/year ($149 intro deal)."Rising dividend stocks outperform every other stock""newsletter focuses exclusively on stocks that have a history of raising their dividends"."compelling div story + potential for impressive growth".shows example of Coke. If bought 1 share at IPO price of $40 in 1919, it would be worth $322,421 now. But if you had invested every dividend, it would be worht $9.3million(Wow, hard to believe)They will keep a portfolio of 24 stocks.Build balanced portfolio of diversified industries.identifying companies with the financial strength to pay and increase divs.Metrics they watch:- growing div payment rates- positive free cash flow- improving trends in sales and earnings.- attractive valuations and strong balance sheet.Sounds vaguely familiar.
PuddinHead42,From the KO split announcement in July:The Coca-Cola Company's common stock began trading in 1919. Since its original listing, the stock has previously split 10 times - first in 1927 and most recently in 1996. With all dividends reinvested annually, one share of common stock purchased for $40 in 1919 would be worth approximately $10.3 million today.Here is their graphic:http://www.thecoca-colacompany.com/dynamic/press_center/All-...Although I can't seem to find it now, there was a PDF that showed how many shares would have been bought with the reinvested dividends vs keeping the one share and holding it through 11 splits.Another interesting factoid: The price when from $40 at IPO and zoomed to $19 the next year! Not a very promising investment. How many folks would have sold that share?Gene
With all dividends reinvested annually, one share of common stock purchased for $40 in 1919 would be worth approximately $10.3 million today.As astronomical as $40->$10.3M sounds, it *only* comes out to about a 14% CAGR (if I'm doing my math correctly). Nothing to sneeze at, certainly. It just doesn't sound nearly as outlandish.
... example of Coke. If bought 1 share at IPO price of $40 in 1919, it would be worth $322,421 now. But if you had invested every dividend, it would be worht $9.3million.It's also worthwhile remembering the Keynes quote that in the long run, we're all dead. If an 18-year-old had bought that 1 share of Coke, weathered through all the ups and downs of the market (another poster has pointed out that the $40 share lost more than half its value after the first year), and had faithfully reinvested dividends, then he would have over $9.3 million today and, if still alive, would be ready to retire at the age of 111 and start spending some of the money that he had been accumulating through successful investing. One the other hand, if he retired in 1960, at the age of 59, having reinvested the dividends, his original investment would be worth about $10,240.culcha
Also that $10.3M assumes that the taxes due on all those dividends that were re-invested were paid out of some other source of funds.
Those numbers are very true. There is a very small town here in the Florida Panhandle where a former bank president insisted on the farmers and merchants buying some of those shares. Until a few years ago, when the older folks were passing on and their children had moved out of the county, it was the wealthiest county in the nation on a per-capita basis.
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