Dividends Matter

Posted by Tim Hope on 5/29/08 10:58 am

Dividends have long been viewed by the investing public as one signal of corporate confidence in the health of a business.  While some investors focus on the current dividend yield of a stock as a substitute for other income producing asset classes, it can be argued that dividend growth rates can have a profound impact on the total return of a given stock.  In other words, while at first glance a small dividend yield on a stock may seem inconsequential, increases in the growth rate of the dividend payout can act as a powerful signal to investors of future earnings growth.  Historically, as an asset class, stocks that initiate or grow their dividends have roughly a 5 to 1 annualized performance advantage (click here for a pdf chart) over stocks that do not pay dividends according to Ned Davis Research. 

Navellier & Associates developed a portfolio to take advantage of the performance attributes of dividend growing stocks.  Interestingly, of all the Navellier portfolios, Power Dividend is the best performing on a year to date basis.  Click here to learn more.

Disclosure:
Potential investors should consult with their financial advisor before investing in any Navellier Investment Product.  Although information in this presentation has been obtained from and is based upon sources that Navellier believes to be reliable, Navellier does not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute Navellier’s judgment as of the date the presentation was created and are subject to change without notice. This presentation is for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of a security. This presentation does not constitute an offer of securities. Any decision to purchase securities mentioned in this research must take into account existing public information on such security or any registered prospectus.  Investment advisory services are provided by Navellier & Associates, Inc. (“Navellier”).  Navellier claims compliance with Global Investment Performance Standards (GIPS).  To receive a complete list and descriptions of Navellier’s composites and/or a presentation that adheres to the GIPS standards, please contact Tim Hope at (800) 365-8471 or timh@navellier.com.  Investment in equity strategies involves substantial risk and has the potential for partial or complete loss of funds invested.

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