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Investment A-Z

Y for Awesome Dividend Yield!

Investors typically define Dividend Yield as  and are happy with dividend yields of 5% - 8%. These are pretty good results.

Here at 8 Investment, we learn how to generate CONSISTENT DIVIDEND YIELDS of more than 20% per annum.

How do we do that?

The secret is to find businesses that compound consistently over time and increases their dividend payout along the way!

As a case in point, Vicom Limited grew their profits from 8 million to 28 million in a span of 10 years, from 2004 to 2013, registering compounded growth of 15% per year.

Meanwhile, their dividends per share increased from S$0.0575 to S$0.225 over the same period, growing 15.8% on a compounded basis.

More interestingly, if you have invested in Vicom in 2004 at a price of S$0.96, this year YOU would have received a DIVIDEND YIELD of 23.4%! This is how Value Investors define Dividend Yield:

Think about it – What will you do with a dividend yield of 20% every year?

What is so interesting about Vicom that allows them to do this? How can you identify businesses like this and achieve annual dividend yields of more than 20%?