Some companies vary their dividends depending on what they can pay like Goodfellow (TSX-GDL) and oil companies. A company like Leon's (TSX-LNF) has reasonable dividends (around 2.5%) with median growth around 9%, but will pay special dividends when they feel that they can, but do not feel confident enough to raise dividends.
You can buy companies with low, medium and high dividend yields that have low, medium and high dividend growth. A company like SNC-Lavalin has a low dividend, around 1.8%, but high growth in dividends, above 20%. A lot of REITs have high dividends, around 6.5%, but low dividend growth, around the rate of inflation. An example would be RioCan (TSX-REF).
Our banks tend to have median dividend yields (over 3%, but less than 5%) and median growth rates currently around 9 to 10%. However, in the past the yields would be around 3 to 4%, but growth around 10% to 17%. The past would be before the recent crisis of 2007 when all our banks stopped raising their dividends.
You might want to start with companies with low dividends and high growth and when you are to start living off you portfolio go for stocks with higher dividends. The biggest reason for this, especially if you have a trading account is taxes. If you do not need dividend income, you pay less tax on lower dividend income.
Lots of people talk about dividend growth stocks. I did an article on this subject in the past. See article on Dividend Growth Stocks.
On my Investment Talk blog I am today writing about Canada Bread Co. (TSX-CBY, OTC-CBDLF). Today, I am discussing if the stock is a good price and what analysts are saying. To read about this stock go here....
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.