Comments on: Looking For Dividend Growth in the Future http://www.thedividendguyblog.com/looking-for-dividend-growth-in-the-future/ One Guy's Journey to Passive Income Through Dividend Investing Fri, 10 Feb 2012 13:02:29 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Paul Belanger http://www.thedividendguyblog.com/looking-for-dividend-growth-in-the-future/comment-page-1/#comment-18945 Paul Belanger Fri, 10 Aug 2007 17:33:46 +0000 http://www.thedividendguyblog.com/2007/08/07/looking-for-dividend-growth-in-the-future/#comment-18945 Looking at the trend of dividend growth is a good starting point. If the payout ratio has also been increasing then it's a good bet that the historic dividend growth won't persist into the future. I'd suggest taking your analysis one step further. If you have several years worth of data you can calculate an average return on equity for the company. With knowledge of the company's normal return on equity and by making an assumption about the payout ratio going forward, you can come up with an estimate of retained earnings and dividends going forward. It might not be perfect, but it will give you another forecast that you can use as a check against your dividend growth assumptions. Looking at the trend of dividend growth is a good starting point. If the payout ratio has also been increasing then it’s a good bet that the historic dividend growth won’t persist into the future.

I’d suggest taking your analysis one step further. If you have several years worth of data you can calculate an average return on equity for the company. With knowledge of the company’s normal return on equity and by making an assumption about the payout ratio going forward, you can come up with an estimate of retained earnings and dividends going forward. It might not be perfect, but it will give you another forecast that you can use as a check against your dividend growth assumptions.

]]> By: Nabloid.com http://www.thedividendguyblog.com/looking-for-dividend-growth-in-the-future/comment-page-1/#comment-18904 Nabloid.com Thu, 09 Aug 2007 16:52:24 +0000 http://www.thedividendguyblog.com/2007/08/07/looking-for-dividend-growth-in-the-future/#comment-18904 I think the next five years (depending on what happens with the housing market) can be a critical time for HD to prove itself during a bad cycle. That said, it's still a great company that is dominating the entire industry (IMO) and it has a bright future. However, I am a bit worried... it seems like everyone has built a new home(or moved or renovated) in the last few years and they have all purchased many items for the home from HD... but many of these purchases are long-term purchases you don't make every day or every year. I think the next five years (depending on what happens with the housing market) can be a critical time for HD to prove itself during a bad cycle. That said, it’s still a great company that is dominating the entire industry (IMO) and it has a bright future.

However, I am a bit worried… it seems like everyone has built a new home(or moved or renovated) in the last few years and they have all purchased many items for the home from HD… but many of these purchases are long-term purchases you don’t make every day or every year.

]]> By: The Dividend Guy http://www.thedividendguyblog.com/looking-for-dividend-growth-in-the-future/comment-page-1/#comment-18878 The Dividend Guy Thu, 09 Aug 2007 01:50:51 +0000 http://www.thedividendguyblog.com/2007/08/07/looking-for-dividend-growth-in-the-future/#comment-18878 Hey Yielder - thanks for the comments. I do agree that HD is cyclical, but I think the data is showing that year after year the dividend per year is going up, which is really what I am trying to show here. See this link for data going back even further: http://ir.homedepot.com/dividend.cfm All I was trying to show was that, based on some historical trends, and assuming that HD continues on with their dividend increase strategy, what the dividend per share might look like in the future. The chart you showed is interesting - the yearly increase in DPS varies dramatically. However, I still do see a company that consistently raises its dividend year after year. I do recognize that the company has some issues right now and may not be a buy until the new CEO can straighten some things out. Hey Yielder – thanks for the comments. I do agree that HD is cyclical, but I think the data is showing that year after year the dividend per year is going up, which is really what I am trying to show here. See this link for data going back even further:

http://ir.homedepot.com/dividend.cfm

All I was trying to show was that, based on some historical trends, and assuming that HD continues on with their dividend increase strategy, what the dividend per share might look like in the future.

The chart you showed is interesting – the yearly increase in DPS varies dramatically. However, I still do see a company that consistently raises its dividend year after year.

I do recognize that the company has some issues right now and may not be a buy until the new CEO can straighten some things out.

]]> By: Lazy Man and Money http://www.thedividendguyblog.com/looking-for-dividend-growth-in-the-future/comment-page-1/#comment-18868 Lazy Man and Money Wed, 08 Aug 2007 19:53:58 +0000 http://www.thedividendguyblog.com/2007/08/07/looking-for-dividend-growth-in-the-future/#comment-18868 It's interesting growth, but when I chart inflation it looks like $90 is worth $121 in 2017. It doesn't look like a lot of "growth" at it's current rate. It’s interesting growth, but when I chart inflation it looks like $90 is worth $121 in 2017. It doesn’t look like a lot of “growth” at it’s current rate.

]]> By: Yielder http://www.thedividendguyblog.com/looking-for-dividend-growth-in-the-future/comment-page-1/#comment-18845 Yielder Wed, 08 Aug 2007 10:10:27 +0000 http://www.thedividendguyblog.com/2007/08/07/looking-for-dividend-growth-in-the-future/#comment-18845 http://i12.tinypic.com/6ag22vr.jpg goes with the preceding post http://i12.tinypic.com/6ag22vr.jpg goes with the preceding post

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