Mar 30 2007

Can Your Get Good Yield and Growth Too?

I believe that there is a common misconception out there with regards to growth and income stocks. Reading a lot of media articles it would appear that you can’t have one with the other. For example, if you are looking for growth then any sort of income from these stocks is out of the question. On the flip side, if you are looking for income, then forget about growth. From my perspective, I disagree with this for two reasons: (1) A good portion of growth comes from dividends and, (2) some of my dividend holdings have been amazing growth stocks.

I have written about this a number of times, but it is well known that dividends make up a huge portion of a stocks return over time. The chart below really hits this point home:

Dividend Returns

Enough said there!! If I look at some of my holdings, I can see clear growth simply by looking at book value, market value, and income received. For example, lets take a look at by Royal Bank of Canada holdings:

Stock Book Value Market Value Income
Royal Bank $6348 $11,240 $731

If you ask me, I would say that I have seen growth from this stock as well as income. Considering that I first bought this in 2004 my return has been great. So, if someone (i.e. your broker) tells you that you can’t get growth from income producing stocks – beg to differ!

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3 Comments on this post

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  1. No Credit Needed » Blog Archive » Carnival of Personal Finance #94 Hosted By No Credit Needed wrote:

    [...] Investing The Sun’s Financial Diary The Dividend Guy Blog Fire Finance Kirby On Finance The Skilled Investor Laws of Finance Tom Hanna [...]

    April 2nd, 2007 at 5:25 am
  1. Declan Fallon said:

    Excellent point. Southern Peru Copper (PCU) has been great (to me) over the last couple of years.

    Best wishes,
    Declan

    April 5th, 2007 at 3:26 am
  2. encino ca real estate said:

    Great post there…Keep up the good work..=)

    May 7th, 2007 at 1:22 am

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