History shows that it is normal for corporations to change (increase, decrease, or suspend) the dividends paid to the common share holders. These changes take place irrespective of which stage of economic cycle we are in. In last one year, i.e. between March 2008 and February 2009, within S&P500 index, there were 205 corporations that increased their dividends, 63, have decreased their dividends, and 25 have suspended their dividends. I could be argued that all 205 may not have good quality sustainable dividends. However, this list is deep enough for mining potential gems. In general, a typically dividend growth investor will look for a corporation that has increase its dividend consistently for at least last 10 years. It is always good to wait for 10 years worth of dividend history. However, I would like to evaluate corporations that have started showing signs of dividend growth early on, and see how it stands in my analysis.
In this context, I have shortlisted nine corporations (from S&P500) that for the last five years have (1) consistently increased their dividends; and/or (2) demonstrated their inclination to consistently pay dividends. The attached table shows the dividends for last 5 years and corresponding growth in last five years. Note: Year 2003 growth is with respect to Year 2002. continue reading rest of the article….
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Portfolio Management Process – Goldratt’s Way
Have you ever noticed that many times and perhaps on many occasions, we do things, or we respond certain situations, or the way we manage certain things, it may be reflecting how we really think. Even if we are not able to express it precisely we naturally tend to do things in a specific way. Conversely, it could also be due to our educational or experiential background.
The foundation of my educational background is in industrial/manufacturing engineering. Any industrial engineer in United States will know about a little book titled “The Goal”. It is written by Eliyahu Goldratt. It is written in a novel based story format. During the course of this story, Goldratt introduces the concept of “Theory of Constraints”. He intertwines the concepts with daily life events. When Goldratt introduced this book (and hence theory of constraints) in early 90s, management consultants recognized its significance and applied at hundreds of manufacturing organization across of board. continue reading rest of the article….