Dividend Growth Model

The Dividend Growth Model, otherwise called the Gordon Model, is a technique for deciding the estimation of a stock or business. This model is utilized as a technique for venture taking into account the current yield. It values an organization in view of the profits at present paid and also the example of profit development that the organization has shown for the future. In spite of the fact that not all financial specialists are alright with this procedure, it is a critical idea for profit speculators to get it.

Organizations with sensible payout proportions are considered as dependable and safe speculations that offer pay and in addition an open door for capital development. The profit development model reflects how an organization has performed previously.

Since it is only a pointer of past execution, it won’t ensure how an organization will do later on. Notwithstanding, we can just utilize the data that we need to settle on an educated speculation choice. In this way, in making a speculation, the profit development model is an extremely valuable apparatus for the development of your arrangement of ventures that try to give a developing pay stream. Notwithstanding, it is not the most important thing in the world of due ingenuity that ought to be performed on an organization.

Obviously, as with any valuation model, there are dangers connected with contributing in view of simply the profit development model. It does, in any case, give a decent information point to your speculation investigation.

To know whether the profit development rate development can be supported for a long time, one can likewise assess the business development and overall revenue patterns. As economic situations transform, it is helpful to keep on running potential speculations through the profit development model, representing changes in profit development rate and the profit payout.

Recent Buy: Hormel Foods Corporation (HRL)

Hormel Foods Corporation produces and markets various meat and food products worldwide. The company currently operates in five segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, Specialty Foods, and International & Other.

It provides various perishable meat products, including fresh meats, frozen items, refrigerated meal solutions, sausages, hams, wieners, and bacon; and shelf-stable products comprising canned luncheon meats, shelf-stable microwaveable meals, stews, chilies, hash, meat spreads, flour and corn tortillas, salsas, tortilla chips, peanut butter, and other products.

The company also offers poultry products, such as turkey products; and nutritional food products and supplements, sugar and sugar substitutes, dessert and drink mixes, and industrial gelatin products. It sells its products through sales personnel, as well as through independent brokers and distributors.

Hormel Foods Corporation was founded in 1891 and is based in Austin, Minnesota.

Years Paying Dividends: 27

DGR3:16.09%
DGR5:16.12%
DGR10:13.65%
DGR20:10.33%

Initiated a position at $34.20

Current Brokerage

Update: 02/22/2017

I have since moved from Robinhood to Merrill Edge.  I still save on commissions.

Most of the Cons have turned into pros with the move and I am happy with the transition thus far.

Robinhood

I started using Robinhood early this year for all my stock purchases and just recently got access to Instant, since I am starting with only a little bit of money every month, Robinhood is the perfect fit.

Pros of Robinhood.

  • Free Trades – allows me to buy small amount of shares without starting from a loss.
  • Money Available Instantly – Up to $1000, it is credited instantly and allows me to buy the stocks. If you are invited to Instant
  • Intuitive interface, easy setup, no commission fees. The UI is the best I’ve seen in awhile.
  • Save Money – An investor following sound investing principles will save about ~$100-200 per year on trades which can be used towards buying more stocks.  Specially if you are a starting out with limited capital.

Cons

  • App-only version, wish there was a nice web client also.
  • No integration with Personal Capital
  • No Automatic Dividend Re-investment.

Since they are still relatively a new brokerage, features like charting and web client will be added later as they are more focused towards the millennial users.