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Author: kelbon Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 8754  
Subject: Re: VL Dividend Growth with Low Risk (3-'13) Date: 3/20/2013 11:34 PM
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Does the screen have total return?

No. But it does give the historical dividend CAGR and the projected rate. For example Lockheed Martin has raised its dividend, on average, 22% per annum over the last five years.

Of the bunch Microsoft has the highest projected dividend CAGR of 16% for the next 3-5 years.

Though the historical figures are, by definition, fact, the forward looking data is (obviously) only an educated guess. All the stocks on the list are projected to increase their dividend payments by at least 5% annually for the next 3-5 years; higher than the likely rate of inflation.

As for total returns, what is pertinent are future returns. in most cases, returns are probably going to be relatively conservative. Mature companies who can't generate outsized returns by reinvesting profits back into their businesses often pay significant dividends. The electric utilities on the list (there are five) are unlikely to see their stock prices rise substantially.

The defense contractor on the list, Lockheed Martin, because of cuts in defense spending, is facing a significant hit to earnings' growth and has chosen to buy back shares and pay a substantial dividend to return value to shareholders.

Obviously, if you are interested in investing in any of the stocks on the list it makes sense to do some due diligence. Both Value Line and Morningstar, among others, have data and opinions about the companies' financial health, prospects, returns, and whether the stocks are under valued, fairly valued, or over valued presently. Given the quality of the companies, and their dividend yields, it's unlikely that any of the stocks are presently much north of their fair values.

kelbon
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