In this post I will bring the form that I invest in dividend companies.
I’ll show you a bit of my investment strategy in most of the companies I invest.
I have some dividend companies in the portfolio and some as a value investment, but today we will only talk about my strategy with dividend companies
My investment portfolio is all focused on investments abroad.
If you have doubts about these investments I suggest you see this post I made of why investing abroad.
Finding Dividend Companies
I usually use a very interesting website to study the morningstar company.
In this site I carry out my studies and qualify the companies for a possible entry in my portfolio of investments.
The data that I will show here on the site is taken from this site. I advise you to open an account and use the site for studies.
Points I look at a dividend company.
- Constant earnings and positive cash flow.
- If you have stock repurchases, this increases the value of earnings per share in the long run.
- Break down because the situation gets out of control The first thing that cuts to pay off the debt is the dividends.
But there you must be wondering, but you do not look Payout, DY, etc …
I honestly do not look, this is just a consequence of the first 3 items I quoted above.
A case study a dividend company.
Let’s take a look at a company that I consider a dividend company that I have in my portfolio.
The Walt Disney, a dividend company that I consider excellent for long-term investments.
Let’s go to the numbers.
As we can see Profits are constant and even doubled until the end of 2017.
It is repurchasing the shares, there are more and less shares circulating in the market. This information is in “Shares Mil”, in 2008 it had 1948 million shares in the market and in 2017 it has 1578 million shares in the market.
Divide this relatively healthy, just look at the right column “Debit / Equity” is less than half of net worth.
Now looking at “Dividends USD” we see that we have had an increase of almost 5 times the dividends paid in 10 years.
For this reason I consider companies in this profile as dividend companies, since they increase the value of the dividends each year that passes.
If we look at the quote it follows this increase.
We see a price increase around 3 to 4x compared to the top of the price in 2008.
You have seen that we are not talking about Payout and Dividends yield, because this data alone does not mean anything.
They are data that are consequences of a well-managed company, which controls its debt and pays dividends.
This is logical I’m just talking about in a qualitative analysis, have to also analyze the core business of the company, if it has a very strong competitive can. but this we will talk about in another post.
Following the Company.
If the company is very good, I usually look at it once or twice a year.
Just to check how the company is doing, and how the company’s investments are.
Now companies have to invest in value that these have to have a closer analysis of the company.
I always look at the 3 items I highlighted above see if they are still being bought by the company.
If it is depending on my analysis I stop buying the company and leave it in a quarantine, maybe it may just be a moment of the company.
I’ve seen people in the blogosphere coming out of companies just for news, etc … I focus on the results of the company, and how the company will react in difficult times, a crisis, etc …
Leaving haste is bad because you can get out of a good company.
If you like dividend companies, do not just look at the DY, Payout, but focus on healthy dividend growths over the years.
This will automatically increase your dividend income year after year.