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Old 02-09-2012, 05:44 PM   #21
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Originally Posted by modhatter View Post
CyclingInvestor. Where did you get the information for your chart?

Do you keep a spread sheet of these stocks each year? Great tool.
Initially (in the 90s) I started with Value Line numbers. By the late 90's I was using the 10Ks from Edgar for historical info (for adding new stocks). For current earnings I just use reported earnings, adjusting for those things that I find important.

I keep everything in an Excel file, taking snapshots every 6 months.

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Old 02-09-2012, 05:56 PM   #22
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Originally Posted by clifp View Post
I am inclined to agree with Ziggy that dividend stocks on a relative basis are overvalued.
For instance two of the great growth stocks AAPL and GOOG have P/E of 10 and 12 respectively lower than many of the dividend stocks from Cycling's list.

I agree with Josh Peters M* Dividend Investor Newsletter that dividend stocks having experience a period of relative over performance are likely to see a period of relative under performance in the next couple of years. That is the bad news.

On the good news relatively to bonds stocks of all flavors look cheap. I don't have a pension but I do count my future SS as part of my bond portfolio. I whole heartily agree with article's author that income is everything to a retiree, especially an early one.

So while I won't be at all surprised to see dividend stock lag growth stock in the next year or two, I am expecting this to be something like 15% for growth stock vs 10% (7% capital gains and 3% dividend) for dividend stock. This relatively under performance doesn't bother me in the least especially, cause I am getting increase income in the form of dividends.
Perhaps the market is skeptical that AAPL and GOOG can maintain their recent growth into the future?

Anyway, I also believe that even if dividend stocks lag growth stocks in the near future due to last year's outperformance, they will not get pummeled as hard as growth stocks get when the latter stop "growing". Yes, this from a guy who likes to buy stocks for capital gains.

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