Never Neglect The Metric of Yield on Cost | by George Schneider, M.A. | Nov, 2024
This metric is the most important, yet most neglected by most investors.
People work hard. They save whatever’s left after the bills are paid. Some put the surplus into a cookie jar, content to see cash build up each week.
More sophisticated folks want to see a better return, higher than 0% on their hard-earned money. A certain percentage of those are content depositing their funds at their local bank for a .2% return. Others, seeking better returns than that often deposit funds into a longer term CD and get current returns close to 5.0% today.
Yet another cohort of savers/investors invests its money in stocks that pay dividends to their shareholders. Essentially, this is a bet that as a company earns more money, they’ll have more to share with their stakeholders down the road. In other words, the hope is that those dividends will grow higher and higher throughout the years of ownership.
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The search for dividend growers begins in the research an investor can do on any number of financial websites. Yahoo Finance, in particular, is a good resource as it usually sports historical information going back to when a company first initiated the payment of dividends to public shareholders.
