The power of dividend growth investments

I invest my savings mostly into companies with dividend growth. Its also important that these companies increase their dividend yearly. What is the meaning for your investments? Especially here the compound interest will be very good for long-time investments.

To show it I will take a look to McDonalds. McDonalds is a worldwide known company who has worldwide branches and selling their products. Most of people love fast food.

The 10 years dividend history of McDonals (MCD) as follows:

2004 – $0.40
2005 – $0.55
2006 – $0.67
2007 – $1.00
2008 – $1.50
2009 – $1.63
2010 – $2.05
2011 – $2.26
2012 – $2.53
2013 – $2.87
2014 – $3.12

In 2004 it was possible to buy MCD shares for $25.00. For an investment of $1000.00 you would have 40 shares. The entry yield at this time was round about 1,60%.  The development of the dividend were as follows:

2004 – $0.40 x 40 = $16
2005 – $0.55 x 40 = $22
2006 – $0.67 x 40 = $26.80
2007 – $1.00 x 40 = $40
2008 – $1.50 x 40 = $60
2009 – $1.63 x 40 = $65.20
2010 – $2.05 x 40 = $82.00
2011 – $2.26 x 40 = $90.40
2012 – $2.53 x 40 = $101.20
2013 – $2.87 x 40 = $114.80
2014 – $3.12 x 40 = $124.80

The dividend income over the last ten years were $743.20. The total yield were 74,32% or 7,43% per year. The actual yield on costs (YOC) would be 12,43% now. Amazing? Yes it is.

I’m really upset that I never was invested into McDonalds, but from now on it will change! MCD is on my watchlist.

Thanks for reading and take care!!!

Comments

  1. says

    That’s really amazing, Patrick. McDonalds example is very simple to understand Dividend investing. One should start investing in quality companies from early age.

    Thanks for sharing this wonderful post.

Leave a Reply