General Electric Dividends May Add Portfolio Power
General Electric (GE) broke out today and made a new high. The price trend is bullish for daily, weekly and monthly time-frames. Of course, I prefer to buy stocks based upon solid fundamentals. However, when I do, I also prefer to not fight the tape when I do. Conventional wisdom advocates that one buy low and sell high, which is something I prefer as much as possible. However, there is nothing wrong with buying high and selling higher, especially if one’s investment horizon is long-term.
Then again, when one considers the long-term benefits of a owning a consistent grower and payer of dividends, then perhaps anytime is a good time to buy. General Electric is such a candidate as it has averaged almost 16% annual dividend growth for the past 5 years. Assuming that it will maintain this growth for the next 5 years and perhaps maintain an average growth rate of 10% thereafter for another 5 years, it makes for a good core holding in one’s portfolio over a 7-10 year period. Compounding dividend growth can power any portfolio is one is patient and has the time.
GE | Cost Basis | Dividend Growth Rate 5 Yrs | Dividend Yield | Dividend |
Year 1 | 30.12 | 15.95% | 3.05% | $0.92 |
Year 2 | 30.12 | 15.95% | 3.54% | $1.07 |
Year 3 | 30.12 | 15.95% | 4.11% | $1.24 |
Year 4 | 30.12 | 15.95% | 4.76% | $1.43 |
Year 5 | 30.12 | 15.95% | 5.52% | $1.66 |
Year 6 | 30.12 | 10.00% | 6.07% | $1.83 |
Year 7 | 30.12 | 10.00% | 6.68% | $2.01 |
Year 8 | 30.12 | 10.00% | 7.35% | $2.21 |
Year 9 | 30.12 | 10.00% | 8.08% | $2.43 |
Year 10 | 30.12 | 10.00% | 8.89% | $2.68 |
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