Photo by Monsieur Gordon

Came across this article on ShareInvestor site titled Do Dividend Plays Pay [link here >>]. I was initially surprised as i never thought that this book that we typically buy for SGD6.00 would have a website.

The article talks about how a big portion of the returns of equities in our region is actually from dividends:

a recent Citi Investment Research report noted that in the past 10 years, equities in Asia ex-Japan have generated a compounded total return of 5.9% per annum in US dollar terms, 46% of which came from dividends.

In the article is also  talk on using payout ratio and retention ratio to identify companies with good dividend potential. I think its good measurements, but i would rather use operating cashflow and the sustainability of it as a good measure.

Remember, ratios are only good if you understand them and how they can help you. There is always alot of story behind certain ratios.

And also a good list of recommendations! Read more…