Dividend growth investing vehicles
Dividend Growth Investing is an investing pattern where you seek out companies that are likely to continue growing their dividends. One way to find these companies is among the ones who have been consistently raising their dividends for a long time. When you find such a company, you generally find one whose stock price largely only goes up.
When you buy the stock, at the beginning it's probably going to have a low dividend. However the rising dividend provides an attractive value to owning that stock, which slowly but surely causes the stock price to rise. Over time, assuming the company continues to increase its dividend, and as a result people keep buying the stock, the price will continue to rise. Your yield (on investment) will rise along with the rising stock price, and your potential total return will also rise along with that same rising stock price.
At least that's the ideal. Of course with the stock market there are no gaurantees, and there is always the possibility of total loss.
There are several ETF's specializing in what they call Dividend Growth Achiver stocks.
- PowerShares HighYield Dividend Achievers (PEY)
- Blackrock Dividend Achievers Trust (BDV)
- BlackRock Strategic Dividend Achievers(TM) Trust (BDT)
- COHEN & STEER DVD FD (DVM)