I have long wanted to write an article about companies that pay dividends of 0.5 – 1% per year. Let’s say I’m a dividend investor. Let’s start.
We go back to 2002 and start looking for strong businesses by analyzing company reports. One of these is Nike. The share price in that one is about $4. The dividend yield in 2002 was 1.3%.
20 years have passed. The share price today is $116. A dividend of 1.36 per share is a 34% annual investment dividend of $4 per share.
All we needed at that time was a BitMarket rating and a clear system for analyzing company reports in order to find the best stocks. Then the talented managers and founders of Nike did the rest of the work for us.
Now let’s look at some of the stocks in my portfolio.
ORCL – the first shares were bought in 2020 at $59-60 per share. The dividend yield at that time was 1.4% per annum. The share price is now $85 and the payout is $1.28 per share. This is approximately 2.13% per annum. Buying a company now yields a 1.5% dividend.
KLAC – current dividend yield of 1.4% per annum. The company has been in my portfolio since the end of 2020. And my current dividend is 2.8% per annum.
TSCO – I bought shares in 2020. The dividend yield at that time was about 1%. My current yield at the moment is 2.8% per annum in dividends. Buying shares now gives 1.6% annual dividends.
There is a second interesting point:
ORCL – the purchase of shares was at $ 60 – the current share price is 85. The average annual yield was 17.5%. If we now sell ORCL shares and buy, for example, another very good business, say Cummins, then we will get: $60 invested at the start turned into $85. $85 invested in Cummins will give $2.21 per annum in dividends, which is already 3.68% per annum for $60 invested.
KLAC – the purchase of the share was at $181 – the current price of the share is 367. The average annual return was 20.8%. If we now sell KLAC shares and buy, for example, another very good business, say Cummins, then we will get: $181 invested at the start turned into $367. $367 invested in Cummins will give $9.19 per annum in dividends, which is already 5.08% per annum on $181 invested.
I hope I was able to clarify a little how this works and why 30% or more annual dividends when starting at 1% from giants such as Microsoft or Nike is a real.
—
If you like BeatMarket, you have ideas and suggestions on how to make it better, more interesting, more useful, I will be very happy to discuss it with you. Email me: maksim@beatmarket.one
Our mission: To tell and teach about investments in a simple way. Avoid the most frequent and major mistakes in the beginning. Help to overcome the first fears and take the right steps into the world of smart, healthy and successful investing. Investments are part of the life path of each of us, and we help make this path exciting, safe, useful and healthy.
