Sunday, October 9, 2022

Dividend Value Investing

Dividend Value Investing is a term I came up with when I couldn’t find a system that matched my investing strategy.  There is growth investing which is close to my strategy but it doesn’t focus on low price stocks.  First let's define what I deem as dividend value investing.

  1. The stock has a dividend yield (the amount it pays out relative to it’s share price) of 3% or higher.  I do however try not to go above 8% as anything over that percentage tends to be risky.

  2. The stock price consistently is below $100, preferably below $50.

  3. The dividend has a track record of consistency.  By this I mean it’s not up and down, it pays the same amount every quarter or only increases.  You can check this at by putting the stock symbol in the search bar, selecting the stock from the search results, and then clicking dividend history on the left hand side.

The main goal is to buy a limited number of low priced stocks and then build them up to the point that they buy a full share of themselves every quarter through DRIP (Dividend Reinvestment Plan).  Then build them up further to buy 2 shares per quarter, then 3 shares per quarter, and so on.  This system utilizes compound interest to grow wealth.

For more check my What is DVI page.