Using The 10 x 10 Table To ‘Score’ Dividend Yields And Growth Rates – Seeking Alpha
: Some of you are familiar with the 10 x 10 concept. It is a table that answers the question, “What beginning yield and what dividend growth rate do I need to achieve a 10% yield on cost within 10 years?” A recent article on it can be found here: “10 by 10: The Interaction of Dividend Yield and Growth.” Obviously, various combinations of yield and DGR can achieve the 10 x 10 goal. The table lets you select a dividend and a growth rate. Where they intersect, it tells you the year in which they will achieve a 10% yield on cost.
In my annual Top 40 Dividend Growth Stocks study, I have in the past used separate scales to score dividend yields and growth rates. Assigning points to those two factors is part of an overall stock-rating system designed for the dividend-growth strategy. Points are awarded in a variety of categories, including ROE, EPS growth, revenue growth, the stock’s Story, and the like. Even the very best stocks rarely approach the maximum possible score. I’ve never found a perfect company and don’t ever expect to.