What is the Dividend Achievers investing strategy?
The Dividend Achievers strategy is a dividend investing strategy which focuses on companies which have a proven record of increasing dividend payments. For a company to become a dividend achiever it has to increase their dividend ten years in a row. When a company misses one dividend increase it will lose its dividend achievers status. The strategy comes from the book beating the S&P with Dividends: How to Build a Superior Portfolio of Dividend Yielding Stocks by Peter O’Shea and Jonathan Worrall .
The dividend achievers are consistent in their dividend payments, since they have proven to be able to raise their dividend regardless of the economical influences on the market. This is significant from a risk management perspective as it provides a lower investment risk. The dividend achievers have beaten the S&P 500 index for the last 10, 15 and 20 year periods.
There are more than 200 dividend achievers right now, which makes it a difficult investing strategy from a money management perspective. The easiest way to benefit from the dividend achievers strategy is by investing in specific dividend achievers ETFs. There are quite some EFTs on the market which use the dividend achievers as their investment choice for their ETF’s due to the success of the dividend achievers strategy. We have listed some of them below.
• Vanguard Dividend Appreciation Index Fund (VDAIX).
• PowerShares Buyback Achievers Portfolio (PKW) • PowerShares Dividend Achievers Portfolio (PFM)
• PowerShares High Yield Equity Dividend Achievers Portfolio (PEY) • PowerShares International Dividend Achievers Portfolio (PID)
• Vanguard Dividend Appreciation ETF (VIG) The dividend achievers strategy has a proven track record of beating the S&P 500 index.
The dividend achievers strategy is very well suited for investors with a long term investing focus, because of the low risk and long term results. The dividend achievers strategy supports diversification, however it is a complex strategy to invest in. This is caused due to the the high level of diversification that this strategy it has. Because of the high level of diversification its preferred to use ETFs dedicated to this strategy when investing in dividend achievers is considered.
