Grow – Grow – Grow!

“Without continual growth and progress, such words as improvement, achievement, and success have no meaning.” – Benjamin Franklin

As dividend investors, it is important to monitor look for companies reporting strong and consistent earnings growth.  This is because earnings will be used to payout dividends.  Therefore, the DOCTOR DIVIDED portfolio aims to look for earnings growth at least on par with dividend growth.  For large established companies, we are satisfied with a sustained earnings growth of about 5-10%.

Once a stock is found, it should be further analyzed.  Although “past performance is not a predictor of future results,” for large cap companies, consistency is key.  Good candidates for our portfolio will demonstrate increasing in earnings per share (EPS), revenue, and cash flow.  EPS can be even further dissected by analysis of generally accepted accounting principles (GAAP) vs non-GAAP.  These measurements help to offer uniformity in reporting financial performance.  Typically low variation is more desirable when comparing these two values.