Have you heard of the magic of compound interest? It’s been called the eighth wonder of the world, and it can be an extremely powerful wealth creation tool. Compounding allows a sum of money to grow faster than simple interest since you are earning returns on top of returns.
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Although I generally focus on growth stocks, my heart has a soft spot for dividend growth investing, and a portion of my portfolio is dedicated to dividend stocks. In fact, F.I.R.E.D. in FIRED Up Wealth is an acronym meaning “Financial Independence Retire Early w/Dividends”. Traditional dividend growth investing, also known as DGI, is geared towards the growth of the dividend annually to outpace inflation. DGI is often used by income investors, especially in retirement or early retirement.
I like to focus on what I called Dividend Growth Investing for F.I.R.E.D. stocks, also called D.G.I.F. or simply DGIF stocks. This is a term I created to identify stocks focused on total growth, meaning the growth of the dividend and the appreciation of the share price. Although not all stocks fit perfectly, here are my general guidelines for DGIF stocks:
1. 3% dividend or less in most cases. You want this low. Dividend yield is good, but you want the company to have cash to invest in growth of the company as well.
2. A low dividend payout ratio of 50% or less, and the lower the better. I usually prefer 35% or less.
3. 5 years of dividend growth or more. The more consecutive years, the better.
4. At least 10% growth in that 5-year period, and the more the better.
5. 10-year annualized growth of 10% or more per year. Of course, the higher the better.
These metrics help ensure total growth for your investing portfolio. Of course, additional analysis and due diligence is required before making any investment decisions. In today's video, I provide my top DGIF stocks to buy now for July 2021. Please watch to see which stocks I think are reasonably priced to buy now.
Top 5 Dividend Growth Stocks to Buy Now 💰 July 2021
Stocks like: dividend growth stocks, growth stocks, best stocks July 2021, Logitech stock, LOGI, John Deere stock, DE, Apple stock, AAPL, Activision Blizzard stock, ATVI, Lam Research stock, LRCX, Nvidia stock, NVDA, Brunswick stock, BC stock. Are these stocks to buy now Are these the best stocks to buy now? Are these the best stocks to buy July 2021?
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This is not financial advice.
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